I’m not an Econ major, but I’ve always wondered why we don’t tax land values by themselves instead of taxing land values plus the values of buildings on them. Specifically, I wonder why we have so many surface parking lots in downtown Minneapolis. For example, according to Hennepin County, the surface lot just north of the downtown library, between 3rd Street and Washington Ave, and Nicollet and Hennepin Avenues, pays about $30,000 in property taxes per year on its 1.7 acres, or about $18,000 per acre. Move one block east, between Nicollet and Marquette, and that building pays almost $2 million in property taxes on 2.45 acres, or almost $800,000 per acre. Even the surface lot east of the library pays $379,000 in taxes on 2.52 acres, or about $150,000 per acre, because there are no buildings on the lot.
This is ridiculous. Is a surface lot the best use of that land? By charging more taxes for building on the lot, the tax code certainly discourages development. That’s why Altoona in Pennsylvania has moved to property taxes based entirely on the land value instead of land plus building value. There is debate on how well it is working, but I’m happy to see that others have thought about this issue as well.
It would be nice to have Minneapolis move towards this property tax model. I’d like to see more development downtown instead of setting aside so much room for storing vehicles.
- Current Mood: Tired
- Currently Listening To: "Street Spirit (Fade Out)", Radiohead