Series: Love for Land-Value Taxes
Ground view of the future Civic Square. Image by Jerrell Whitehead, Sightline fellow.
Downtown Seattle holds some of the most valuable real estate west of Minneapolis and north of San Francisco. Yet walking through Seattle’s urban core reveals unwelcome surprises: rundown buildings, empty land parcels, and surface parking lots on prime real estate. Undoubtedly, this is a problem faced by all large cities.
But what explains so much valuable real estate essentially still sitting idle? The structure of the property tax. Under today’s tax rules, leaving a lot empty or letting a building slowly rot gives property owners a light tax bill, thus allowing landowners to perpetually hold onto under-developed properties. Perhaps the simplest solution is an idea that’s been around since the late 1800s: taxing land values, not buildings, to discourage speculation and encourage compact, infill development.
