Revitalizing Cities and Creating Jobs through Property Tax Reform
Rigsby, Deborah, Nation's Cities Weekly
Economic and community development, employment, environmental problems and even traffic jams can be addressed with property tax reform, according to Rick Rybeck, a legislative assistant to the Council of the District of Columbia.
Rybeck notes that 15 Pennsylvania cities have employed split-rate taxes and have experienced more economic development than similar cities that use the conventional property tax. This tax reform promotes affordable housing, environmental protection, job creation and economic development in urban areas. Thus, a split-rate tax lowers property taxes on buildings and increases land taxes.
Rybeck has conducted research on how "split-rate" property taxes could help increase land-use development in areas near public and private facilities. To address this problem known as "sprawl," he suggests that housing can be built in such commercial areas whereby people could use public transportation or even walk to work, school, stores, etc. instead of driving.
Urban sprawl occurs when land owners discourage development until property values exceed normal rates. So rather than build housing or other facilities near public infrastructures, developers turn to cheaper sites outside city limits for land use. And once these suburban areas are inhabited, residents usually "create political pressure" to extend roads, subway lines, etc. to their communities, causing higher maintenance costs.
Anthony Downs of the Brookings Institution and A. Knighton Stanley of Peoples Congregational Church report that the experiences with a split-rate tax in Pennsylvania cities indicate that poorer precincts would reap the proportionately greatest reductions.
In addition, homes and apartments on average would enjoy lower taxes; owners of vacant lots and blighted buildings would pay substantially higher taxes; and neighborhood businesses generally would pay lower taxes. …