blight – Market Urbanism

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In a recent Mackinac Policy conference, Detroit’s Mayor Mike Dugan proposed *drum roll* a land value tax. Sort of. Mayor Dugan’s proposal would create separate tax rates for land and capital improvements (i.e. the buildings on top). Specifically, he wants to decrease the tax rate on buildings by ~30% and increase rates on land by ~300%. The change would increase revenue for the city and also cause a series of second order effects. Taxing Blight & Rewarding Investment Detroit’s existing tax structure disincentives development. Holding vacant land or land with dilapidated (i.e. assessed as worthless) structures is cheap from a tax perspective. Actually developing land triggers a tax increase because of the brand new structure who’s value gets figured into the tax bill. What’s worse, the existing tax system encourages land hoarding. Land speculators sit on neglected parcels on the off chance that a developer needs it as part of a larger project. To caveat that, though, not all land speculation is bad. Holding some land off market and releasing it later into a development cycle can have positive benefits. In Detroit’s case, however, these are mostly vacant lots and abandoned buildings creating public health hazards the city has to deal with. The Political Economy of Land Value Taxation Unexpectedly – for me as a latte sipping coastal urbanite in California – Dugan’s LVT would also lower tax bills for homeowners. Land values in Detroit are low — in absolute terms and relative to structure values. Making the shift to taxing the less valuable land component of a property nets out positive for most homeowners. And the fact that it’s a win for homeowners makes me think it’s politically viable, both in Detroit and elsewhere. In places struggling to get back on a growth footing — places where land values […]

Jeff Fong

June 14, 2023

Using eminent domain to blight neighborhoods

by Stephen Smith The Weekly Standard has a comprehensive and compelling piece of investigative reporting on Columbia University’s attempt to acquire 17 acres in the heart of the Manhattanville section, north of its Morningside campus. The tale is a classic example of eminent domain abuse – the university worked hand-in-glove with the government to designate the area as blighted and eligible for eminent domain action, and the university’s lawyers pushed the limits of rational argument so far and yet look like they’ll probably come out on top. But perhaps more importantly in this process of acquiring the necessary Manhattanville land on which to build its gleaming new Campus upon a Hill (and under which to build a mammoth garage complex) is not the explicit use of eminent domain, but rather the threat of the land being taken by force. Whereas Columbia’s initial land acquisitions before the expansion plans were made public were probably not made under duress, as time went on, Columbia’s plans became known, and, as a holdout landlord’s leasing agent put it: “At some point along the line, with all of these concerns, the knowledge that Columbia University can or will invoke eminent domain has caused [ground floor retail renters] to seek out alternative space arrangements.” This is a phenomenon that affects all negotiations with the government and big institutions like Columbia – and, post–Kelo, even private buyers – and which makes it very difficult to be sure that the owner didn’t sell for less than they’d have liked (or, indeed, might not have wanted to sell at any price). As it is, the land that Columbia has already acquired – 70% of what it wants – is largely vacant and most definitely more “blighted” than the land it wants to buy, however the relevant (and irrelevant) acronymed […]

Tag blight

Detroit: LVT would fix that

Using eminent domain to blight neighborhoods

Detroit: LVT would fix that

Using eminent domain to blight neighborhoods

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