So says the Lincoln Institute of Land Policy, releasing a new report that says this all-too-common strategy rarely pays off.
Report authors Daphne A. Kenyon, Adam H. Langley, and Bethany P. Paquin explain that there are three obstacles to successful property tax incentives:
"First, incentives are unlikely to have a significant impact on a firm's profitability since property taxes are a small part of the total costs for most businesses-averaging much less than 1 percent of total costs for the U.S. manufacturing sector. Second, tax breaks are sometimes given to businesses that would have chosen the same location even without the incentives. When this happens, property tax incentives merely deplete the tax base without promoting economic development. Third, widespread use of incentives within a metropolitan area reduces their effectiveness, because when firms can obtain similar tax breaks in most jurisdictions, incentives are less likely to affect business location decisions."
The authors say that strategies that work better for long-term economic development include "...customized job training, labor market intermediaries, and business support services."
The full report is available as a free PDF download.
FULL STORY: Property tax giveaways in Boston are a popular, and flawed, business lure
Californians Could Vote to Expand Prop 13 Property Tax Breaks in November
A biting opinion piece asks why Californians would want to worsen the effects of Proposition 13 by voting yes on Proposition 5.
Bill Would End Tax Breaks for Second Homes in California
AB 71, originating from the California Assembly, would raise funding for low-income housing construction by ending an existing tax break for second homes.
For Cities, Big-Box Stores Are Becoming Even More of a Terrible Deal
Big-box retailers' new tactic to slash their taxes is the latest example of why cities are better off saying no to the boxes and cultivating Main Streets instead.
The Top Urban Planning Books of 2022
An annual list of the must-read books related to urban planning and its intersecting fields.
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.
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.
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?
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.
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.
PlaceWorks
City of Oakland, California
Rural Innovation Strategies, Inc
Chaddick Institute at DePaul University
HUD's Office of Policy Development and Research
Georgia Tech
California High-Speed Rail Authority (Authority)
Missoula Redevelopment Agency
City of Joliet
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.
