Tag Archives: land value tax

What Does Our Stimulus Agenda Need to Be To Build a Better Future?

By Dom Nozzi

There is much talk these days about taking advantage of the 2020 pandemic to achieve important societal objectives that have not been achieved despite their importance and despite there being known as problems for decades. The old Chinese adage that pertains to this is that from crisis comes opportunity.

What are some of the most important transportation and land use objectives that we should consider moving forward with, now that there is heightened political will to make important changes?

I would suggest the following.

  1. Reform Parking. American cities have far too much free parking. We need to remove a massive amount of free parking (perhaps in part by converting it to housing), a  much higher proportion must be priced, and required minimum parking must be either converted to maximum parking or eliminated entirely.
  2. Reform Taxation. Nearly all American cities strongly discourage compact, mixed use, infill development with their tax structure. Instead of strongly discouraging infill (and encouraging surface parking for land speculation) by taxing improvements to land (renovations, infill, etc.), we should be taxing the land. This has been done in Pittsburgh. It is known as a “land value tax” (or “single tax”).
  3. Slow Streets. American cities have far too many streets that were built with an excessive design speed (often because the design vehicle was the oversized worst-case-scenario vehicle). While we certainly need to ensure that NEW streets use lower design speeds, new streets are very rare in most cities. The major task for us is to retrofit EXISTING streets for lower speed design. This is crucial for progress in traffic safety, promoting quality compact development, and promoting active transportation. I love the world-wide movement for “slow cities,” by the way, as cities thrive when speeds are slower.
  4. Return to the Human Scale. American cities have spent much of the 20th Century creating over-sized spacing (roads, building setbacks, parking lots). This loss of human scale destroys the ability to create a sense of place. This is an important reason why so many of us love historic old towns around the world.
  5. Restore Passenger Rail. If we are to soon see a massive transportation infrastructure stimulus in response to the pandemic, that stimulus needs to include a big expansion in American passenger rail. For the coming decades, the emphasis should be getting the most bang (mileage) for the buck by emphasizing slow-speed rail. High-speed rail is sexy and exciting, but it buys us very little rail mileage because the cost is enormous. Some of that slow-speed rail can later become, incrementally, high-speed.
  6. Emphasize Transportation User Fees. We all know that gas tax revenue is not keeping up with needs. Note that I agree with Chuck Marohn that it is fortunate that we have inadequate transportation funding these days because our society continues to emphasize counterproductive car-based infrastructure when we find dollars. But there will come a time when we finally “get it” with regard to how to spend transport dollars. Important, equitable ways to find new funding, besides ramping up parking revenue, is a lot more road tolling or VMT fees (or similar user-based fees). Sales, income, and property taxes are a terribly unfair (and socially undesirable) way to raise transportation dollars.

Let us not squander the opportunity that this pandemic crisis offers to us to dramatically improve our communities.

The time for bold action is now.

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Filed under Politics, Transportation, Urban Design

Reforming Parking

By Dom Nozzi

January 18, 2016

Based on what I have learned in my 20-year career as a town planner, there is little that is more important than substantially reforming parking regulations. Nearly all community parking regulations – including those in Boulder, Colorado – are horribly outdated.images

The first task is to jettison required parking rules. That is, eliminate laws that require new development to provide parking. As Donald Shoup points out so clearly, nearly all community parking requirements are almost completely arbitrary and nearly always excessive. Excessive parking artificially induces car trips that would not have occurred had such parking not been provided. Fear that the elimination of such a rule will lead to the provision of insufficient parking is unwarranted, as property owners are well aware that they are slitting their own throats if they provide insufficient parking, because insufficient parking will threaten the financial viability of their development.

A town center should also emphasize priced, on-street parking and discourage free, off-street parking.

The price of parking needs to be unbundled from the price of housing, so that a person can opt to pay less for their housing if the decide they don’t need a parking space. This is a great way to get more affordable housing.

Codes need to be revised, if necessary, to allow existing businesses to easily infill into existing parking areas. Because nearly every community has required the installation of excess parking, a great many parking areas are opportunities for town center financial benefits and enhanced vitality. Most land development codes put significant barriers in the way of doing this – for example, by not allowing there to be a reduction in the amount of parking at the location in question. Developers should not be required to devote time and money to the revision of codes in order to convert parking to a better use of land.

Surface parking should be kept away from streets. When surface parking lots abut streets, they create “gaptooth dead zones” that kill the vibrancy of the street and undermine agglomeration economies. Existing surface parking lots abutting streets must be retrofitted with liner buildings along street frontages at a minimum.

The Codes need to allow a substantial amount of joint parking so that parking can be shared. Allowing the sharing of parking obviously reduces the amount needed, and it is very common for this to be possible, since businesses often have provided far more parking than they need (usually as a result of the excess parking required by local government). Another reason why shared parking is often possible is that many businesses have hours of operation that do not overlap the hours of nearby businesses. Rather than have such parking sit unused, that parking can be used by a nearby business.

A downtown association should have city-owned parking garages that can be leased to businesses and residences (so they don’t have to provide as much of their own). This is a form of “cash-in-lieu” of parking.

Businesses should be required to provide a “parking cash-out” option whereby employees are given a choice: either retain a free parking spot (the status quo) or be given a higher salary, a bus pass, or money to purchase a bicycle (among other possible rewards).

Property taxation needs to be inverted so that a “Land Value Tax” is used https://en.wikipedia.org/wiki/Land_value_tax. The fact that nearly all cities assess much higher taxes on a property owner that develops/improves/upgrades their property strongly encourages downtown land speculation (which helps explains why there is WAY too much surface parking in American downtowns). In this counterproductive situation, property owners tend to hold their property unused or undeveloped (to avoid a taxation penalty for developing it) until they find the property can be sold for an attractive price.


Each of those red herring arguments will need to be squashed by leadership. There are quite a few well-known responses to these concerns that can convincingly show why the concerns are not valid.

Reforming parking is one of the most important, effective ways to improve the health and vitality of a town center and many other locations in a community.


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Filed under Transportation, Urban Design

Reforming Parking and Property Taxes

By Dom Nozzi

An important reason why a parking cash out program, once enacted, becomes quite popular for both employees and employers is that it creates a more fair, equitable parking system (by allowing those who do not need employee parking to obtain benefits) without removing an existing perk (free parking).

For several decades, the conventional approach used by nearly all organizations in the nation has been to provide a large subsidy only to those who drive to work alone. For those who don’t drive to work alone, no subsidy is offered. This system strongly encourages driving alone to work (which artificially creates more solo drivers than would be the case had we not distorted the market with this subsidy), and is unfair to those who car pool, use transit, bike or walk to work.

Parking cash out simply establishes a program which equitably levels the playing field. We retain the subsidy for driving alone to work, but we provide the same subsidy for those who car pool, use transit, walk or bike to work.

It is a simple matter of fairness.

Land value taxation is another needed tax reform. This property tax system has been tried in Pittsburgh to remove the tax incentive for retaining undesirable surface parking lots in downtowns, and discouraging downtown infill, building construction, building renovation and a more productive use of an underused lot (the conventional tax structure used throughout the nation penalizes such desirable conversion of surface parking or dilapidated/underused downtown buildings by increasing the tax rate when you improve your property).

The result of conventional property taxation is that a great many downtowns in America have an enormous amount of surface parking and abandoned buildings, which significantly deadens a downtown, makes it less attractive to live in our visit, results in a downward spiral of declining tax revenue and lowered quality of life, and increases crime. Sprawl is Houston Downtownthereby encouraged.

The conventional tax rate structure used by nearly all cities taxes buildings instead of land. The higher the value of a building on a piece of downtown land, the higher the tax. As a result, downtown property owners have a strong incentive to build or retain low-value or decrepit buildings, or simply keep it as a vacant lot (or parking lot) in order to minimize their tax rate while they wait for their land to increase in value. Usually, this underutilized land is being held for speculation. And takes life away from the downtown by being held in an underutilized way for long periods of time.

The alternative is to tax land itself, not the building on it. Under this approach, land that is close to the center is taxed higher, since this is the location where there is usually the closest proximity to goods, services, culture, government activities, etc. By using this system, housing is promoted downtown (housing that is more affordable to the middle class). By promoting new, higher-value, or refurbished buildings, the alternative system improves the overall downtown tax base. It would promote more compact, mixed use cities, and discourage sprawl.

The idea of taxing land instead of buildings is called “site-value taxation” (or “land value taxation”), and was the idea of Henry George.

Pittsburgh and Harrisburg PA (and other cities in that state) are using a modification of the George system. These cities are using what is called a “two-tiered” property tax, where land is increasingly taxed more than buildings incrementally over time.

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Filed under Economics, Sprawl, Suburbia, Urban Design