throwawaitnine t1_j164wm2 wrote
Reply to comment by CerealJello in 29-Unit, Mixed-Use Project to be Built on Broad Street Diner Site - Rising Real Estate by RoughRhinos
This is shifting the tax burden from people building and buying brand new homes in neighborhoods they gentrify to people in established neighborhoods in old ass houses.
RoverTheMonster t1_j17gk9v wrote
What does “gentrify” even mean anymore?
doc89 t1_j18ich7 wrote
The land in nice/rich neighborhoods is more valuable than the land in poor neighborhoods, so the tax burden would still fall disproportionately on the rich with a LTV. It's just now the landowners would not be punished for turning their empty lot into an apartment building or business.
throwawaitnine t1_j18juvd wrote
Can you explain that more clearly?
doc89 t1_j18kb5i wrote
An empty plot of land in Rittenhouse is worth more than the same sized empty plot of land in Kensington. Therefore a land value tax will collect more from the Rittenhouse land owner than the Kensington land owner.
throwawaitnine t1_j18q7xm wrote
We already have that...
doc89 t1_j18qiq7 wrote
No, we have a property tax which punishes development.
The key difference between a land value tax and a property tax is that a land value tax does not increase when you develop a property. Imagine an empty lot right next to an apartment building. They are the same dimension. The empty lot and apartment building have the same "land value" and therefore would pay the same land value tax.
flamehead2k1 t1_j18t0vc wrote
The land component for property tax is different for Rittenhouse than Kensington.
We have a land value tax and an improvement tax packaged together.
doc89 t1_j18w219 wrote
Yes a property tax is essentially just a land value tax + an improvement tax.
Advocates of a land value tax think the land piece should be expanded and the improvement piece should be diminished/abolished.
flamehead2k1 t1_j19m9e8 wrote
I'm ok with tweaking the rates to tax land more but complete removal does shift a burden.
It isn't a punishment for developing a property the same way it isn't a punishment getting taxed on each additional dollar you earn.
Larger buildings with more occupants will require more services and should pay tax to help cover that.
Something like taxing land at X and taxing improvements at .25-.5X would motivate landholders to put that land into productive use but also raise revenue as the city takes on new residents who need services.
doc89 t1_j19ow9b wrote
>Larger buildings with more occupants will require more services and should pay tax to help cover that.
Remember that everyone in the building will presumably be paying city wage taxes and sales taxes, it's not like they are free-riding.
On balance most of the residents of market rate new housing are going to be contributing much more to the city budget than they are going to be drawing in expenses. We should encourage buildings like this as much as possible.
>Something like taxing land at X and taxing improvements at .25-.5X would motivate landholders to put that land into productive use but also raise revenue as the city takes on new residents who need services.
Most of the advocates of a land value tax would consider something like this a huge win, myself included.
flamehead2k1 t1_j19r8wz wrote
>Remember that everyone in the building will presumably be paying city wage taxes and sales taxes, it's not like they are free-riding.
That's true but I don't think we should further rely on city wage tax. It has seriously hurt our development and I don't think lower property taxes on high density housing is going to offset that enough.
The 10 year tax abatement is a temporary land value tax because it only includes the improvement portion.
I think between keeping this and encouraging the city to get rid of lots they are holding, we could do a great job infilling the city.
throwawaitnine t1_j199wvk wrote
And does the unfairness of raising taxes on people who can't afford to improve their property while lowering taxes on people who can improve their property register with you at all?
doc89 t1_j19ec7l wrote
Yes, it registers with me. I think the city would function better if people who can't afford to develop their undeveloped properties sold those properties to people who can afford to develop it. In many cases these properties are worth several hundred thousand or millions of dollars. These are not "poor people" generally.
People sitting on empty lots/abandoned buildings because they either cannot afford to or don't want to develop is a major inhibitor of growth. This behavior should be discouraged through the tax code.
flamehead2k1 t1_j19mjsb wrote
>I think the city would function better if people who can't afford to develop their undeveloped properties sold those properties to people who can afford to develop it.
The biggest holder of unproductive property in the city is the city itself.
Don't need to dramatically change the tax code, just get those sheriff sales moving!
geeivebeensavedbyfox t1_j18d3qx wrote
Na, property assessment is imprecise. New homes and old home "improvement" values are similar. Taxing the land shifts the burden to empty lot owners.
throwawaitnine t1_j18joxi wrote
It shifts the burden to people in established neighborhoods who can't unlock the equity in their home because of their income.
[deleted] t1_j1dl9xt wrote
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