Financing transportation with land value taxes: Effects on development intensity
AbstractA significant portion of local transportation funding comes from the property tax. The tax is conventionally assessed on both land and buildings, but transportation increases only the value of the land. A more direct, efficient way to fund transportation projects is to tax land at a higher rate than buildings. The lower tax on buildings would allow owners to retain more of the profits of their investment in construction, and have the expected side effect of increased development intensity. A partial equilibrium simulation is created for Minneapolis, Richfield and Bloomington, Minnesota to determine the intensity effects of various levels of split-rate property taxes for both residential and nonresidential development. The results indicate that split-rate taxes would lead to higher density for both types of development in all three cities.
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Bibliographic InfoArticle provided by Center for Transportation Studies, University of Minnesota in its journal The Journal of Transport and Land Use.
Volume (Year): 5 (2012)
Issue (Month): 1 ()
Value capture; Property tax; Split-rate land tax; Development intensity; Density; Minnesota;
Other versions of this item:
- Jason Junge & David Levinson, 2009. "Financing transportation with land value taxes: Effects on development intensity," Working Papers 000067, University of Minnesota: Nexus Research Group.
- R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
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