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Baltimore Assessments Accidentally Subsidize Blight–and How We Can Fix It
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- paul7986 1y agoHome(town - there often) for me yet I did buy up into Southern York County PA. It's more peaceful, there's access to a 30 mile bike/railroad trail and buying a single family home (with nice amenities) is a 100 to 200k less. Yet in time York county's school taxes make up the difference.
- snapcaster 1y agoThis isn't really meaningful if the area is "subsidzed" by having a powerful economic engine nearby (baltimore, harrisburg). Suburbs aren't really sustainable in isolation for the most part
- potato3732842 1y agoSpeculation is less profitable than development. If you're getting speculation it's because the roi vs risk of development isn't justifiable. You can't "tax magic carrot stick <buzzword1>, <buzzword2>, blah, blah, <dogwhistle>" your way around this fundamental economic reality. But you absolutely can screw it up more. Now, in a low regulation environment you probably could just up the taxes and let owners make do. A bunch of random low end income earning crap (storage lots or whatever, heavy on the whatever) will pop up to pay the tax bill. But Baltimore is not that so you'll probably just get the city owning a bunch of that vacant property instead which is a lateral or a step backward due to increased friction of development. Tangentially, the author forgets that the reason cities like Baltimore adopted such policy was to encourage the bulldozing of uninhabitable structures lest they become less than legally inhabited. I get that a certain type of people love to screech about tax intake being an unalloyed good here but what's really happening is that the city is amortizing the cost of bulldozing crack dens over time via tax incentive for owners of "teardown" quality structures to take that step (which up's adjacent property values).
- matthewdgreen 1y agoOh, don't worry, we have some lovely storage facilities here. It's just that there's only so many that you can build. I'm not sure that the city owning a lot of land is actually a bad thing, compared to the current situation where it just sits there and rots. It's not like Baltimore has the best results doing things, but the alternative is clearly very bad.
- nashashmi 1y agoOther cities have established chartered “development corporations” to utilize underutilized assets and resources like land and make good uses for them. They have been good for low income housing (often at the expense of lower income housing), low rent commercial spaces, low rent industrial spaces, amusement parks, real estate development, etc. But this is gentrification and if you think it is necessary, then very quickly you will realize it is a problem. It homogenizes neighborhoods to support only a certain class of people while destroying other people.
- sroussey 1y agoYes, they make it so difficult to develop that you must sell to the city so their development corporation can hand out contracts to city cronies with kickbacks. Tax dollars at work, lol.
- triceratops 1y agoThe city doesn't have to own the lots long-term. They could divide them among neighboring lots.
- potato3732842 1y agoI challenge you to find me an example of a city making that routine practice in any capacity. That would be a huge administrative PITA, say nothing of the perverse incentive it creates (regardless of if it's a forced sale).
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- unnamed76ri 1y agoThis article highlights something that’s an issue almost everywhere, albeit maybe not as egregious. If I do nothing to my property, my taxes stay the same. If I add a shed, deck, pool, or whatever external feature to my property then the tax man comes and wants more money. The lesson? Don’t improve your property.
- jacobr1 1y agoThe solution is to tax the land value rather than property improvement value. Any particular improvement from a property owner isn't taxed ... though implicitly the whole neighborhood getting more expensive (via the aggregate of all improvements and increased demand) does raise your tax.
- throwanem 1y agoThat sounds like the same as now but with many extra steps.
- swagasaurus-rex 1y agoNow being where you are disincentivized from making improvements?
- throwanem 1y agoIf I'm meant to treat a rise in property tax in response to positive change in value as a disincentive to improvement, what difference how the tax increase is computed? It isn't even clear LVT does not create a massive incentive to consolidation, as property tax increasing without connection to improvement kicks off a "Red Queen's race" where anyone unable to capture revenue from improvement, or unable to increase that capture, ends up facing a permanent structural bar to any ownership. It seems as though designed to annihilate even any possibility of an American-style middle class, in favor of an ever narrowing landlord gerousia enriching itself through rent farming. Well, it makes sense if you hope to be among the winners. But I don't see any Georgists here seeming very interested in addressing anything like that, just a couple who handwaved past it. [1] I'm not an economist, though, nor even very smart. I'm just a Baltimore homeowner who's heard a time or two before of such alternative tax scams. I mean schemes. [1] And the ones responding at https://news.ycombinator.com/item?id=44826168 https://news.ycombinator.com/item?id=44826168, who seem thus far to present one argument each and retire discouraged by its failure. One hopes someone might come along willing to actually espouse this heterodoxy, rather than just try to feel "based" for namedropping around it.
- nashashmi 1y agoSo this is all about getting the town to assess lots at higher valuations and this way raise tax revenue which in turn will raise town’s ability to spend for itself. Sounds more like the Substack is trying to raise poverty by raising cost of living and prices.
- matthewdgreen 1y agoI don't know about that. We live in a city where people are complaining about housing costs and availability, but the city has absolutely vast amounts of housing. We've lost close to 40% of our population since 1970. It's just that a lot of that housing is in awful shape, and the places where it exist aren't desirable neighborhoods (although let's be clear, many of them are right next to expensive and desirable neighborhoods, it's really bad.) This should be a situation that rights itself automatically, but it's not.
- SECProto 1y agoNot sure where you are, but the demographics have likely shifted significantly - you have to normalize the population changes with the average household population. For example, a 40% drop in population would about equal out with the change in average household size from ~4 to ~2.5
- matthewdgreen 1y agoI'm in Baltimore. And I promise you that there are acres of empty houses out here. Come buy one and fix it up!
- triceratops 1y agoAlternatively raise taxes on empty lots and reduce them on occupied lots.
- potato3732842 1y agoHow do you connect the policy with the intended effect without magic or lying? Time is money and taxes are already amortized into any potential developer's math, regardless of what the rate nominally is. If the properties aren't economically developable in a "it costs us pennies to sit on them so we'll take our sweet time" paradigm then they're sure as shit not developable in a "I'm paying the same tax rate no matter what so I gotta put something up ASAP so I can a)get income b) sell" paradigm.
- hopelite 1y ago> But what if the government’s own policies were quietly making the problem worse? That is usually the case, outside of the very few core competencies and purposes of government which simply are not what our governments in the West focus on at all anymore. In many, if not all cases western governments even actively undermine the beneficial things they should be engaged in because they are all corrupt, captured, and at the very least borderline illegitimate.
- phendrenad2 1y agoYes, usually big systemic problems happen because someone in government did something unexpected, and they did it to grift money. The big systemic problem will therefore continue as long as the root cause has utility for grift.
- almosthere 1y agoI'm not sure paying an extra $500 per year is going to do much for land owners. Every empty lot in my neighborhood had valuations of 50k and they just sat for 20 years until cov.
- lgleason 1y agoI know many people in high tax states that forgo upgrades on the outside of a house to avoid higher taxes. Hence the neighborhoods do not look as good as they do in the south.
- throwmeaway222 1y agoMaybe pass a law that makes blight (boarded up windows, tall grass, messy yards) have an extra fee
- bpt3 1y agoThat works in a functioning community. In a place like Baltimore, the city ends up owning the blight, and are generally not capable of effectively cleaning it up (due to their general mismanagement that causes an environment where blight is the norm in the first place).
- philipallstar 1y agoWhy not incentivise positively instead of negatively?
- owenversteeg 1y agoAnyone here for Georgism? https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism The tax upon land values is, therefore, the most just and equal of all taxes. It falls only upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive. It is the taking by the community, for the use of the community, of that value which is the creation of the community. It is the application of the common property to common uses. When all rent is taken by taxation for the needs of the community, then will the equality ordained by Nature be attained. No citizen will have an advantage over any other citizen save as is given by his industry, skill, and intelligence; and each will obtain what he fairly earns. Then, but not till then, will labor get its full reward, and capital its natural return. — Henry George, Progress and Poverty, Book VIII, Chapter 3 Very relevant to this particular article: https://en.wikipedia.org/wiki/Georgism#/media/File:Everybody_works_but_the_vacant_lot_(cropped).jpg https://en.wikipedia.org/wiki/Georgism#/media/File:Everybody... >"EVERYBODY WORKS BUT THE VACANT LOT" I paid $3600, for this lot and will hold till I get $6000. The profit is unearned increment made possible by the presence of this community and enterprise of its people. I take the profit without earning it. For the remedy read "HENRY GEORGE"
- bpt3 1y agoGeorgism is a nice idea in theory, but will never work in practice (a characteristic it shares with communism, not coincidentally). If someone comes along and overimproves their land near me (or overpays for a lot), does that mean the entire area should be compelled to pay taxes as if all landowners made the same incorrect decision?
- larsiusprime 1y agoWouldn't this scenario also apply under conventional property tax regimes? Is or isn't this already happening in high property tax states? What is the specific bad effect you are invoking, and is it having the effects you predict in places where the effective tax rate on land is already fairly high?
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- csomar 1y agoThe fix to all your city problems: Raises taxes on the greedy landowners who are sitting on empty lots and watch all your problems go away and your city boom with this one simple trick. That's what happens when you have absolutely no ideas to innovate or bring new businesses. Or you ignore other realities, like Baltimore is a really dangerous city. Cities are not revenue generators as some politicians or people assume. Cities capture and manage value created somewhere else. If there is no value to capture, the city die. People move on to other places to capture value and it is totally fine.
- Based-A 1y agoConsidering that there is a fixed amount of land, I do want to raise taxes for those who choose to sit on undeveloped or underutilized land within urban areas rather than either selling it to someone who will develop or developing it themselves. Although it's a bit disingenuous to refer to only refer to it as "raising taxes" since it's taxing based on land value rather than improvement value. It's probable that there would be a significant amount of land plots that would see their taxes decreased as well, especially those along the peripheries of cities since they wouldn't have access or proximity to the same services as a downtown or business district would. I'd also like to think that a lot of land being developed leads to new businesses appearing and more economic development when compared to just leaving the same lot empty and unused.
- bpt3 1y agoBaltimore is a terrible example if you want to talk about underutilized land. The city literally can't give away vacant homes because of how badly the city is run. If supply exceeds demand so much that the equilibrium price is below $0, there is no underutilized land.
- philipallstar 1y ago> But what if the government’s own policies were quietly making the problem worse? What a surprise that would be.