How Low Land Taxes Contribute to the Housing Shortage

The relatively low cost of holding on to vacant lots leads to underdevelopment in what are often prime residential areas.

Read Time: 1 minute

November 23, 2022, 9:00 AM PST

By Diana Ionescu @aworkoffiction

An article by Konrad Putzier in the Wall Street Journal explains how the property tax system that keeps the cost of holding vacant land low contributes to the housing shortage plaguing most U.S. cities.

Putzier begins with the example of a vacant New York City lot, zoned for 1,500 apartments, that has sat empty for 17 years, with the owner paying minimal property taxes on the land. Across New York City, private vacant lots bigger than 3,000 square feet could yield around 858 million square feet of new housing and commercial space.

The article argues that low taxes on land and high taxes on buildings encourage property owners to hold vacant lots without developing on them, waiting for land values to rise. In regions like the Sun Belt, “The cost of inaction is usually low, particularly in suburban locations, where keeping a few cows on a lot allows landowners to qualify for massive property-tax breaks meant for ranchers.”

Proposals in Detroit, Philadelphia, and Richmond would reform those cities’ property tax systems to raise the tax on vacant lots and encourage developers to build. “Pittsburgh had a split-rate tax until 2001, and a number of studies found that it had more building activity than other Pennsylvania cities.”

Tuesday, November 22, 2022 in The Wall Street Journal


The Top Urban Planning Books of 2022

An annual list of the must-read books related to urban planning and its intersecting fields.

November 28, 2022 - James Brasuell

The  Rue Sainte-Catherine in Bordeaux is crowded with pedestrians in a lively European scene.

European Cities Act on Density

The sprawling mass of suburbia has been a disaster for the environment. But now smaller, denser cities herald a renaissance in city living.

November 20, 2022 - Wired Magazine

Victorian two-story buildings with retail shops in downtown Nashvile, Tennessee

Nashville Sets Downtown Parking Maximums

Nashville is the latest city to enact a substantive change to the parking requirements set by the city’s zoning code—doing away with parking minimums and setting parking maximums in the city’s Urban Zoning Overlay.

November 20, 2022 - The Tennessean

Dark parking garage, empty except for one car covered with a red tarp

Advice for a Post-Parking Mandate World

After abolishing parking requirements, what can cities do to make the most of new space and revenue and avoid backlash?

November 29 - Next City

View of park ranger with tan hat from behind, ranger looking out at Grand Prismatic Spring in Yellowstone National Park, Wyoming

Western Voters: Yes to Conservation, No to Extremism

Voters in Western states generally favored candidates who support public land conservation in this November’s election and rejected extremist rhetoric.

November 29 - High Country News

The Boring Company

Detailing the Boring Company’s Poor Track Record

Elon Musk’s promised solution for congestion—the Boring Co.—has proven most successful at disappearing on the governments that trusted them.

November 29 - The Wall Street Journal

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.