Financing transportation with land value taxes: Effects on development intensity

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Financing transportation with land value taxes: Effects on development intensity

Author Info

Jason Junge
David Levinson () (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)

Abstract

A 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 three sample cities to determine the magnitude of the intensity increase for both residential and nonresidential development if various levels of split rate property taxes were enacted.

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Publisher Info
Paper provided by University of Minnesota: Nexus Research Group in its series Working Papers with number 000067.

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Date of creation: 2009
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Publication status: Published in working paper
Handle: RePEc:nex:wpaper:landvaluetax

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Find related papers by JEL classification:
R51 - Urban, Rural, and Regional Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies
R52 - Urban, Rural, and Regional Economics - - Regional Government Analysis - - - Land Use and Other Regulations
R48 - Urban, Rural, and Regional Economics - - Transportation Systems - - - Government Pricing; Regulatory Policies
H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
H27 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other Sources of Revenue
H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
R14 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Land Use Patterns
R21 - Urban, Rural, and Regional Economics - - Household Analysis - - - Housing Demand
R33 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location - - - Nonagricultural and Nonresidential Real Estate Markets

This paper has been announced in the following NEP Reports:

NEP-ALL-2009-10-24 (All new papers)
NEP-PPM-2009-10-24 (Project, Program & Portfolio Management)
NEP-URE-2009-10-24 (Urban & Real Estate Economics)

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This page was last updated on 2009-11-10.

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