DEVELOPMENT: Change the city's property-tax policy

Kudos to City for covering the land-value tax policy ( Rush?" February 11).

What happens when we continue to weigh the property tax so heavily on assessment of buildings and improvements, and so lightly on land? We reward neglect, underutilization, speculation, and wasteful use of land (e.g. ugly surface parking lots on prime city land downtown where there should be beautiful buildings). We give away huge chunks of needed revenue in the form of dubious tax breaks to a very select few because there is no across-the-board codified tax incentive for good urban land use and development. We watch Kodak demolish good buildings to lower their tax and simultaneously erase revenue critically needed by the city and its citizens. And we punish with raised assessments and property-tax bills those who strive to make their properties durable and beautiful and their neighborhoods better.

Land-value tax not only shifts the tax to encourage good development and discourage bad development; it also steadies the levy against the wild volatility of building values. In the Kodak case, LVT would encourage Kodak to reuse the now-landfilled buildings - an eclectic performing arts center? - with very little or no tax on any improvements, and simultaneously protect the community from the double whammy of lost buildings and lost tax revenue.

Under LVT, the speculators who blight key parcels downtown - or the better developers they sell to because underutilization of urban land is no longer so profitable - can build a handsome 15-story building, while paying relatively low taxes for building efficiently on the land. Sure, the tax on that land will be relatively high because of its high site value, but the tax would be low relative to the overall square footage and private revenue afforded by the building.

We do all our work to restore our city an enormous disservice when we don't seriously explore this particular property-tax reform. Mayor Duffy, keep this in mind: Mayor Stephen Reed of Harrisburg, Pennsylvania, credits the land-value tax as a key piece of his city's remarkable turnaround from the late 1980's, when it was considered one of the most distressed in the country. Last year, the reputable World Mayors competition selected Reed as the third best mayor in the world, behind only two major city mayors in Europe and Australia.

All our good design charrettes, visioning processes, and progressive plans cannot trump bad policy. Let's reward our own toil to improve the city by enacting a land-value tax. It will enable all that we envision in all those beautiful drawings and computer renderings.

EVAN LOWENSTEIN, ROCHESTER

Comments for "DEVELOPMENT: Change the city's property-tax policy" (8)

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Steven Cord said on Feb. 17, 2009 at 9:48pm

Multiple KUDOS to Evan Lowenstein! His article says it all. Now the City Council must act.

Nicholas D. Rosen said on Feb. 17, 2009 at 10:15pm

It's good to see someone pointing this out for Rochester. Harrisburg is one example of what taxing land more than buildings can accomplish, but a number of other towns in Pennsylvanie and elsewhere have done it. Again and agin, a town's level of building permits is much higher for the three years after it switched to a two-rate tax -- higher on land than on buildings -- than it was for the three years before, and higher than for comparable neighboring towns which didn't go two-rate. During the 80's, Pittsburgh raised its land tax until it was six times the building tax, and also cut the wage tax. (Wouldn't you like to pay less in tax on what you earn?) Construction boomed, and Pittsburgh was rated the most livable city in America thanks to its low housing costs. Then in 200, it went back to taxing buildings as much as land, and delivered itself into financial crisis.

Bill Batt said on Feb. 17, 2009 at 10:15pm

Phasing in a tax shift to land values and off building values is a no-brainer! What easier and better way to induce revitalized urban investment and remove the penalty for building and maintenance. Moreover, taxing land sites according to their strategic worth puts the carrying costs where high value sites are induced to make good use of them. There is then no reason to hold land out of use for speculative gain, forcing developers to choose second best sub-optimal alternatives. The sooner Rochester does this the sooner it will see new growth. B.

Robert DeNigris said on Feb. 17, 2009 at 10:35pm

House values have risen dramatically in the first half of this decade, and fallen even more dramatically in the last two years. But what part of the house has increased so much in value - the fireplace? The kitchen cabinets? And what part of the house has decreased so much in value - the exterior siding? The bathroom fixtures? Actually, house values stay relatively stable while value of the land the house is built on fluctuates wildly. Land, the only gift of God's creation that mankind readily buys and sells, is not reproducible. Therefore its value fluctuates with the laws of supply and demand. It is the land that is the object of speculation, which causes these great fluctuations in the value of our real estate, not the houses. How can we stop this speculation?

Henry George, an 18th century philosopher and economist, suggested a tax on land and land only. This tax would eliminate the speculative nature of land, and stabilize its value. Which is what we now need. This tax would consequently eliminate wild fluctuations in the boom and bust cycles of the business world. Without booms, the rich would not be getting richer as fast, but without busts, the majority of us would not be subject to losing our homes, savings, jobs, or pensions, as we are now.

Should we really be spending taxpayers money to bail out Wall Street, or should we be collecting taxpayers money in such a way that these crises of business confidence are eliminated? Rochester now has the chance to do this. Let's hope they do.

Robert DeNigris
Ardentown, Delaware

mstillman said on Feb. 18, 2009 at 12:57pm

Evan makes excellent points. I would only add that all the tax payer dollars over more than 100 years that have been spent on infrastructure have made the city a desirable place to live and has made all lots more valuable - but that value has largely gone into private hands. Taxing the value of land, outside of all the other things stated here, recoups the investments in a fair, transparent and efficient manner that gives Rochester a stable tax revenue that doesn't fluctuate much with varying economic winds.

Rev. Samuel T. Williams said on Feb. 19, 2009 at 9:30am

To the officials of Rochester, excellent "Moral Action" regarding the implementation of Land Value Taxation.

JDK said on Feb. 24, 2009 at 12:34pm

Interesting approach. I'd suggest this cite (choose monroe county and rochester for city and residential as property type).

http://www.newyorklandvaluetax.org/calculator/

Although the data is old (perhaps you could contact site and ask them to update it) , it appears that about 67% of home owners would get a tax break (which would also be a nice stimulus!)

steven cord said on Apr. 01, 2009 at 4:55pm

Email stevencord2000@yahoo.com if you want empirical information on the economic development that occurred in cities that taxed land assessments more than building assessments. This is what could happen in Rochester, also.

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