BOOM: Unanimous Vote Puts Land Value Tax Enablement on Governor’s Desk
In Virginia, a unanimous senate vote puts LVT on the Governors desk. Meanwhile, Kentucky also joins the momentum as other states continue on toward LVT enablement.
Earlier this week, the Virginia Senate unanimously passed HB 282, which allows four more cities to voluntarily adopt a split-rate land value tax. After Governor Spanberger signs the bill into law (which passed with veto-proof majorities in both chambers), the cities of Charlottesville, Falls Church, Fredericksburg, and Newport News will obtain the legal authority to tax land at a higher rate than buildings, should they so wish.
“Northern Virginia is rapidly transforming from a car-centric suburb into a people-first destination,” says Falls Church City Councilmember Justine Underhill. With that transformation comes soaring land values — and a decision that can no longer be deferred.
Underhill, who also runs a well-known urbanist YouTube channel, puts it plainly: “Should these gains translate into affordable housing and better public transit, or should they merely pad the pockets of land speculators? HB282 gives us a vital tool to ensure that this socially created value benefits the broader public.”
She is joined by Charlottesville Planning Commissioner Lyle Solla-Yates, who sees the bill as long-awaited relief for residents squeezed by rising assessments. Speaking in a personal capacity, Solla-Yates says: “We have been studying tax reform measures to meet our housing, equity, and climate goals for many years now. Reducing the tax burden on Charlottesville families will provide some relief from spiking assessments while making the numbers work better for those working to protect, repair, and build the homes we need.”
“It is heartening to know that Richmond hears us,” Solla-Yates added, “and wants to work with us to solve the problem.”
This progress continues Virginia’s slow march towards land value tax (LVT). The modern journey began with a 1998 opinion from the state Attorney General which concluded that nothing in the Virginia Constitution prohibited a split-rate LVT, but that local governments must first receive explicit permission from the General Assembly before adopting one. Since then, lawmakers have gradually granted that authority one jurisdiction at a time: Fairfax in 2002, Roanoke in 2003, Poquoson in 2011, and Richmond as recently as 2020.
With HB 282, that list of cities has doubled. Taken together, these eight cities contain roughly 7% of Virginia’s population, including two of the state’s largest cities, Richmond (population 235,000) and Newport News (185,000).
Over the last few years, interest in land value taxes has been building in Virginia as the state struggles to accommodate an influx of population resulting in increasingly unaffordable housing, flooding of coastal areas, shortfalls for funding schools, and aging infrastructure.
Indeed, the Progress and Poverty Institute (PPI) has published two detailed analyses of LVT for Richmond. Analysis on behalf of the City found that a revenue-neutral LVT shift would be broadly progressive, tending to reduce the tax burden in lower-income neighborhoods. This would shift the tax burden off of multifamily housing and commercial properties, and onto low-intensity land uses such as vacant land and surface parking lots. In parallel, a series of case studies for the Realtors Association recommended implementing an LVT prior to the Richmond 300 rezoning, as a way to capture some of the windfall land value conferred upon upzoned properties. This revenue stream could be tapped to fund infrastructure necessary to accommodate growth, or to provide tax relief for the rest of the city.
PPI have also published similar analyses for Fairfax City and Charlottesville (although the latter study now relies on outdated assessment data), both of which found that a revenue-neutral LVT shift tends to reward the construction of much-needed multifamily housing, while raising taxes on vacant and underutilized land.
With the passage of HB 282, Virginia now appears perfectly-poised to actually implement LVT. Perhaps Charlottesville will be the first city to try it out.
Kentucky joins the fold
Kentucky may soon become the next state to enter the national conversation around land value taxation.
Unlike most states, Kentucky has two consolidated city–county governments known as Metro Governments: Louisville–Jefferson County and Lexington–Fayette County. These unified governments combine city and county functions under a single administration and legislative council elected from districts across the county.
In Louisville, however, the consolidation preserved a key institutional boundary from the pre-merger city. The area corresponding to the historic City of Louisville is now designated as the Urban Services District (USD). Within the USD, Louisville Metro directly provides traditional city services such as fire protection, trash collection, and snow removal. Because these services are delivered at a higher level than in the surrounding county area, the USD has its own additional property tax layered on top of the countywide tax.
This district provides a natural opportunity for experimentation with tax policy.
Kentucky lawmakers are currently considering HB HB607, a broader bill dealing with Metro Government governance and oversight. One provision would allow Louisville Metro to adopt a split-rate property tax within the Urban Services District, creating separate subclasses for land and improvements and allowing land to be taxed at a higher rate than buildings.
In effect, the legislation would allow Louisville to pilot a split-rate land value tax within the area where traditional city services are already concentrated, making it a logical testing ground for the policy.
What’s more interesting is the way this came to be. Jackson Arnold, a local resident interested in land value taxes, Progress and Poverty reader, and frequent contributor to OpenAVMKit, decided to run the numbers himself. He did the analysis of the impact of a split-rate tax and at the same time engaged in conversations with city council members about the practical and good implications of land value tax shifts. He has attracted interest from several elected officials, including the chair of the Republican caucus of Metro Council, Anthony Piagentini. Through these conversations, Arnold met with the relevant parties across the city and state and found an opportunity for this enablement.
This approach follows the playbook we have discussed before: speak pragmatically, find a local champion, and do the boring work for your elected officials. This boring work included legal and data analysis, as well as writing explainers and engaging with the weeds of the policy.
Syracuse mayor expresses interest
Last year, land value tax momentum started finding a foothold in New York, led in part by Syracuse Councilmember Corey Williams and State Senator Rachel May. The Center for Land Economics published a report on the potential impact of a land value tax shift in Syracuse. The results are excellent: a pragmatic, sound policy that shifts the tax burden from productive to unproductive uses of land.
Now, recently-elected Syracuse Mayor Sharon Owens has stated her interest in exploring land value taxes as a solution to problems facing the city. Speaking to the Central Current, a Syracuse-based news source, she says:
“Like that’s a sea of parking over there, a sea of parking. Minimally, build a parking garage that you can build more parking in,” Owens said. “But really, in high-demand city spaces, surface parking lots are not the best, and we don’t own them. And so I am learning more about it.”
She then expressed a similar desire to explore land value taxes in her State of the City while discussing tools to ensure fiscal sustainability while nurturing growth in the local economy. “We will also explore new opportunities such as a land value tax to incentivize the highest and best use of property for economic growth”, Mayor Owens stated.
She is joined by her City Councilmember Corey Williams who has been a key champion of the policy since he first learned about it from Zach Zeliff, Senator May’s Chief of Staff. They have been useful in pushing the state legislation which was recently re-introduced from last year with one improvement: removing the pilot cities clause.
Last year, the legislation would have enabled a pilot program for cities. A pilot program that requires state approval introduces complexity making implementation for a city more difficult, having to vote for a policy without guarantee the state approves the city for the pilot program. To avoid any complications, the amendment would now allow any city to implement split-rate taxes, a cleaner solution.
Armed with a state bill to enable cities and the data to support the policy, Syracuse has the opportunity to be among the first in a new wave of cities nationwide to implement land value tax shifts.
Syracuse does not need to wait for the state; instead, they can pass a City Council resolution petitioning Albany, engage their local state legislators who already support land value tax, and build enough political pressure to see it through to the governor’s desk. In 1993, the city of Amsterdam charted a path worth following: the Amsterdam City Council twice passed resolutions petitioning the state for authority to implement a split-rate tax, their local legislators sponsored a bespoke single-district bill, and after lobbying from the mayors of other cities helped secure the governor’s signature, Mario Cuomo signed it into law on August 4, 1993.
A couple hundred miles away, recently-elected Buffalo Mayor Sean Ryan, who mentioned land value tax shifts multiple times in his campaign, has remained quiet about them so far. Buffalo is properly situated to benefit heavily from such a policy, so let’s hope the Mayor will translate his stated desires into active support for state policy to allow Buffalo to implement the split-rate tax.
The growing moment in Ohio
In Ohio, one man has been the source of a large push for a land value tax. We have reported before on Republican State Senator Louis Blessing’s SJR 7, a proposed constitutional amendment which would enable cities to implement land value taxes. Since then, the media has relentlessly covered his push—making it perhaps the most public push since Detroit’s efforts years ago.
The public push has translated into real media traction. Blessing has made the rounds across Ohio and national outlets, with coverage appearing in Fox 8, 10TV, WKBN, the Ohio Capital Journal, Marietta Times, and even Realtor.com. The framing is consistent: with a grassroots campaign threatening to abolish property taxes entirely, a move Ohio’s Office of Budget Management warns would open a $24 billion hole in local budgets, Blessing is offering LVT as the grown-up alternative.
His pitch is crisp: “Why are land value taxes superior to property taxes? Quite simply, they don’t tax development. And as many of you know, if we’re going to tax improvements, we get less of them.”
On the abolition push, he’s equally blunt, warning that a property-tax-free Ohio would be a windfall for land speculators: “If I were an out-of-state investor, I would get my ass into Cincinnati as quickly as possible, buy up as much land as I can, sit on it forever, tax free.” It’s a pitch aimed squarely at the business community, housing advocates, and local governments alike — and it’s finding an audience.
At the time I am writing this, I asked the Senator for a quick time to chat, and in typical fashion, he responded that he would… after he got off another call with the media talking about his push for land value tax enablement. He notes, too, that he is a fan of vintage Puck magazine cartoons.
His public push is not for naught. Ohio is a red state, and like other states, there is a contingent of red state politicians pushing for property tax abolition. Blessing, rightly, understands that this is a nonstarter for a prosperous economy. Instead, Blessing is hoping to reframe the debate toward abolishing the tax on development but retaining Milton Friedman’s favorite tax: the land value tax.
Updates from the Center for Land Economics
To quickly catch new readers up, we launched one and a half years ago and made a splash in our first year. Right now, we are two folks—Lars and Greg—but supported by a powerhouse board. We also recently launched a fellowship program, and the application window closed last weekend, so we look forward to hosting fellows soon.
And now, a few announcements.
First, we have recently revamped the CLE’s website! It is now more functional and features many interface improvements for a better overall user experience. One page we’ve improved in particular is the LVT Legislation Tracking webpage.
We’re also joining the conversation in local newspapers. Last weekend, we published an op-ed in the San Francisco Chronicle: California needs to fix Prop 13, but Tom Steyer’s plan has a fatal flaw. In it, we argue that the pragmatic way for California to escape the mess of Prop 13 is to eliminate it with provisions that ensures that unwinding Prop 13 does not immediately create a windfall increase in tax collection for cities.
Further, our recent report evaluating vacant land valuations across Maryland was reported on by the Baltimore Banner. From our initial analysis of the updated values, the State Department of Assessment and Taxation (SDAT) is making improvements on the glaring issues we found in our original report. We will be speaking on a webinar with HGSSS about these two reports in a week.
CLE also supported Elle Griffin’s deep dive: Let Cities Build Utopia. The first installment from Elle is well worth a read, as is the full pamphlet.
Finally, we will also be in Chicago late April. If you are in the area, our friends at the Progress and Poverty Institute have been working with local organizations to put together an event on Land Value Tax in Chicago on April 30th. This will be an exciting event, and in addition to ourselves will feature Daryl Fairweather, Redfin’s Chief Economist, as well as John Norquist, former Mayor of Milwaukee.
Rounding out today’s updates are the following news beats:
Phil Levin and Ben Southwood, writing in Works in Progress, argue that urban retail fails because the value it creates — the foot traffic, neighborhood vitality, and rising home prices nearby — is captured by landowners rather than the retailers themselves. They survey several mechanisms to fix this leaky value capture, from unified ownership models (malls, transit-oriented development) to hyperlocal taxing authorities like Business Improvement Districts, making the case that land value capture tools are essential to sustaining the shops, cafes, and restaurants that make cities worth living in.
David Rickheim, a resident in St Louis Park, MN, writes in to the Sun Sailor expressing that a land value tax is the alternative to retrograde tax property tax policy proposals such as levy limits and value caps.
Jared Fleischer, CEO of Bedrock, a real estate firm operating in Detroit and Cleveland and Detroit’s largest downtown developer, has endorsed land value tax as a way forward for Detroit’s economy to spur development.
Maryland has introduced a senate companion bill to their house legislation as they consider enabling Baltimore and counties to adopt split rate tax. Hearings have occurred in both the House and Senate for this bill with a mix of supporters and opponents. In a future post, we plan to dive into the hearings and the context of Maryland, including a fiscal note which may hinder progress on the bill this year—the state department incorrectly claiming implementation will cost $36 million.
In a BBC interview, a Green Party spokesperson responded to vacancy land taxes with a smarter proposal: “The way land and property is taxed in Wales needs a total overhaul, including replacing council tax and business rates with a fairer land value tax.”
Greg Miller is Executive Director of the Center for Land Economics. Stephen Hoskins is the Director of Community Research and Engagement at the Progress and Poverty Institute.
Fantastic, nice work people!
Wow, so exciting!