Measuring the Effects of a Land Value Tax on Land Development

Cho, Seong‐Hoon; Kim, Seung Gyu; Roberts, Roland K.

doi:10.1007/s12061-009-9039-3

Cited by 13 publications

(10 citation statements)

References 60 publications

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“…Oates & Schwab (1997), for example, found a 47% increase in building permits following the 1979 increase of tax rate on land value in Pittsburgh, Pennsylvania. Cho et al (2011) found that an increase in the SV tax rate increased density and the likelihood of development in Nashville-Davidson County, Tennessee. More recently, modest density effects from increasing the CIV tax rate were found by England et al (2013), who note that "ten percent tax hike would increase the floor-area ratio of the average new home by about 2.2 percent".…”

Section: No Tax: (Rentmentioning

confidence: 98%

Land value is a progressive and efficient property tax base: Evidence from Victoria

Murray¹

2019

Preprint

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Property taxes are a common revenue source for city governments. There are two property tax bases available—land value (site value, SV), or total property value (capital improved value, CIV). The choice of property tax base has implications for both the distribution and efficiency of the tax. We provide new evidence in favour of SV being both the more progressive and efficient property tax base. First, we use three Victorian datasets at different levels of geographic aggregation to model the SV-CIV ratio as a function of various household income measures. At all three levels, a higher SV-CIV ratio occurs in areas with higher incomes, implying that SV is the more progressive property tax base. Our range of results suggests that a one percent increase in the income of an area is associated with a 0.10 to 0.57 percentage point increase in the SV-CIV ratio. Second, we use historical council data to conduct a difference-in-difference analysis to compare the effect of switching from a CIV to SV tax base on the number of building approvals and value of construction investment. We find that switching from CIV to SV as a property tax base is associated with a 20% increase in the value of new residential construction. This is consistent with the view that changes to land value tax rates are non-neutral with respect to the timing of capital investment on vacant and under-utilised land, which we also demonstrate theoretically.

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Section: No Tax: (Rentmentioning

confidence: 98%

Land value is a progressive and efficient property tax base: Evidence from Victoria

Murray¹

2019

Preprint

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“…Land development is measured by land value of developable parcels. Cho, Kim and Roberts (2009) indicate that the probability of land development is based on a function of parcel attributes (i.e., individual parcel and neighborhood characteristics, and socioeconomic factors) in general, but especially a tax on land values. Furthermore, many scholars argue that the extent of land development is interactive with, or resulting from, the land values in the community (Cho et al, 2006;Cho and Newman, 2005;Irwin and Bockstael, 2004)…”

Section: Form Of Governmentmentioning

confidence: 99%

Development Impact Fees: A Vehicle or Restraint for Land Development?

Bae¹,

Kwon²,

Coutts³

et al. 2015

LEX

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Although development impact fees have been used by local governments for decades, it is still not well understood how this tool serves its fundamental policy goal of growth management. Previous studies have shown that impact fees can serve as either a vehicle or restraint for land development. By using panel data from Florida counties in the U.S., this study shows that the use of impact fees precipitates local development by increasing the value of developable parcels. Impact fees allow developers to pursue more development activities as they bear the imposed fees.

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“…One way to define the development of land parcel i is to identify whether or not a structure has been built on the parcel during a given period of time (e.g., Cho, Kim, and Roberts 2011;Cunningham 2006). One way to define the development of land parcel i is to identify whether or not a structure has been built on the parcel during a given period of time (e.g., Cho, Kim, and Roberts 2011;Cunningham 2006).…”

Section: Effects Of Land-related Policies 223mentioning

confidence: 99%

“…Defining land development. One way to define the development of land parcel i is to identify whether or not a structure has been built on the parcel during a given period of time (e.g., Cho, Kim, and Roberts 2011;Cunningham 2006). Identifying the development status of a parcel based only on the placement of a structure on the parcel, regardless of the parcel's fragmentation status, presents the problem that structures built on smaller parcels fragmented from a larger parcel (e.g., fragmented parcels within a subdivision from a farmland parcel) are counted as individual land-development decisions, when in fact development of a subdivision represents only one land-development decision by a landowner or a group of landowners.…”

Section: Effects Of Land-related Policies 223mentioning

confidence: 99%

Effects of Land‐Related Policies on Land Development during a Real Estate Boom and a Recession

Cho¹,

Kim²,

Roberts³

et al. 2014

Growth and Change

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Our research evaluates and compares the effects of three land‐related policies on land development in a sprawling metropolitan area during a real estate boom and a recession. Our findings suggest that during a real estate boom 1) the urban growth boundary (UGB) serves its purpose of attracting urban development inside the given boundary during a boom while its effectiveness diminishes with increased development pressure from lower‐valued land outside of the UGB during a recession period, 2) the agricultural zone works well for restraining new development during a boom period while agriculture zoned parcels are more likely developed during a recession period, and 3) an increase in the land‐value tax bill increases the incentive for development during a recession period while higher tax bills do not affect development during a boom period. In anticipation of a re‐emergence of urban sprawl with the recovery of the real estate market, our findings imply that land planners and others concerned with sprawling development should pay more attention to development in sprawl‐prone areas during recession periods.

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Measuring the Effects of a Land Value Tax on Land Development

Cited by 13 publications

References 60 publications

Land value is a progressive and efficient property tax base: Evidence from Victoria

Land value is a progressive and efficient property tax base: Evidence from Victoria

Development Impact Fees: A Vehicle or Restraint for Land Development?

Effects of Land‐Related Policies on Land Development during a Real Estate Boom and a Recession

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