Land Value Taxation

So, OK, it’s not going to emerge as a central issue this week. It’s one of those many Freddy proposals that he doesn’t talk about much any more, though Mike raised it obliquely during the debate (“tax hike!”).

But The Politicker has a fondness for impolitic policy proposals (I still think Anthony’s asteroid-defense plan was his finest moment) and land value taxation is an interesting notion: The basic idea, as I understand it, is that you tax land based on its value, not on the value of the structures built on it. As things now stand, the taxes on a vacant lot are far, far less than on a developed lot. Seen one way, that’s a penalty for building, and an incentive to leave the lot vacant and wait for the right market.

Anyway, there’s an interesting little note in the Bloomberg campaign’s lengthy attack on Freddy’s debate performance, under the section going after Freddy’s “$900 million property tax hike in residential areas.”

“Ferrer buried a $900 million tax hike on vacant property adjacent to homes at the end of his housing plan. “In reality, the Ferrer plan would speed the over-development that plagues too many neighborhoods in the outer boroughs by creating a strong incentive to build multi-family homes or “McMansions” on the few lots that are not yet built on in these areas.”

Now that may be true. But it also seems to concede Freddy’s basic point: that this is a way to get more housing built.

And “overdevelopment” — while clearly an issue in some neighborhoods — hardly rivals the housing shortage as a serious problem. Land Value Taxation