Many lovely old buildings have disappeared in downtown Brandon, to be replaced by parking lots. Owners razed them, or did not rebuild them, in part, because it lowered their taxes. We could change that motivation however, by a revenue neutral reform to emphasize the value of the land, not what is built on it. Property taxes levied chiefly on land rather than buildings, could benefit downtown Brandon.
Nobel Laureate Herbert Simon argues that it discourages speculation by raising the holding cost of vacant land and encourages prudent owners to build to generate revenue. Of course, to maximize the benefit for downtown Brandon, tax reform would have to be developed in parallel with a downtown building design standard that would ensure that the new construction complimented the existing streetscape. Tax reform would also induce owners to improve decrepit buildings, as their taxes would also be based on land vs buildings.
Harrisburg and Allentown Pennsylvania changed their tax assessment criteria to emphacise land vs buildings, the number of building permits nearly doubled and the value of new construction nearly tripled. Vacant buildings dwindled from 4,000 to 500.
This post is part of a series on downtown development. I'd like to hear your ideas. Please email me at shariformayor@gmail.com.
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