A Novel Approach for Eliminating Surface Parking Lots

In Minneapolis, and cities across the country, surface parking lots are an enduring blight on urban landscapes; their presence often incentivized by existing tax structures. Could a new approach to property taxation maximize the productivity of land?

Read Time: 2 minutes

December 10, 2012, 11:00 AM PST

By Jonathan Nettler @nettsj


jersey-city-parking-lot-3

dandeluca / Flickr

Chris Keimig looks at the ways in which the conventional property tax system is sabotaging Minneapolis's development goals by disincentivizing more productive use of the city's overabundance of surface parking lots; a blight that covers one-third of the entire surface area of downtown. "The conventional property tax, which taxes land and buildings at the same rate, is essentially backwards when it comes to the behaviors it incentivizes," argues Keimig. "It penalizes property owners for building or making improvements to their structures, while rewarding speculators and absentee landlords who would rather allow their properties to decay than make expensive (and annually taxable) improvements."

To solve this dilemma, Keimig advocates a two-rate system that would tax land at a higher rate than buildings. "By taxing land at or near its development potential," he says, "owners of land being used at less than maximum productivity would be paying a disproportionate amount in taxes in order to keep it that way."

"Aside from the obvious goal of raising money to pay for public services, we levy taxes either to discourage a particular behavior in favor of another (taxes on cigarettes and alcohol discourage consumption and thus promote healthier lifestyles/lower health care costs), or because a given resource is scarce while demand for it is high (i.e., the gasoline tax). But if the city is trying to encourage development—and to attract the 70,000 more downtown residents it seeks by 2025—it hardly makes sense to place a tax on that behavior. Similarly, if the city wants potential developers to treat land as the scarce resource that it is—encouraging them to build up rather than out in order to maximize economic output and reduce sprawl—it makes sense to tax land at a higher rate than buildings." 

Monday, December 10, 2012 in Streets MN

Books

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.