Reading some of the history of the Altoona LVT experiment made me thing that it would be helpful to layout a practical series of steps that municipalities, counties, or states could follow to implement an LVT.
Specifically it seems like the distressed communities trying to implement an LVT ran into the following doom loop.
1) Implementing an LVT required a large increase to the mill rates (though of course only applied to land) which was politically confusing and also an information/complexity barrier to potential investment.
2) Implementing an LVT ended up causing a lot of private land owners to abandon their land to the city, which reduced the tax base and required further increases in LVT rates to compensate (along with infrequent reassessment)
3) The combination prevented the formation of a stable equilibrium where the theoretical benefits of LVT could be shown.
Obviously I'd love to see you guys do a full retrospective and especially interview some of the people who were involved to get a closer look then the newspaper stories, but it does seem like there needs to be a plan for implementing an LVT in a way that generates a stable revenue base (the one that jumps out to me is the requirement for swift auctioning of abandoned land, probably tying into the assessment system somehow). Once you have a stable LVT, you should be able to gradually shift taxation from other sources into the LVT instead.
If those private land owners are mostly abandoning no-longer-sufficiently-profitable rental properties, it might be better to simply hand the deed to the tenant / occupant when reasonably possible - less procedural hassle for everyone involved that way, and minimizes the risk of "this policy directly rendered me homeless" stories turning into a catalyst for backlash.
When auctioning a vacant unit is necessary, advertise it on Craigslist or similar websites catering to apartment-seekers, taking special care to emphasize that modifying whatever structures are present is not only permitted (within reason - safety standards still apply) but actually encouraged.
If I recall correctly from the newspaper articles I saw, most of the abandonment was of owned but unused land (i.e. land held for speculative purposes) that the city had hope a LVT would cause to be developed. When it instead began being abandoned in mass, the city's began acquiring a lot of public land and had little success getting out of city developers to bite (the reason I saw given was that developers were scared off by the rising mill rates without understanding what they meant and that the city struggled to make a successful pitch to them because developers distrusted and were confused by the change in the status quo that the LVT represented).
I suspect that's less a matter of confusion as such, more that they were trying to pitch a policy intended to discourage land speculation to a bunch of de facto professional land speculators. Better plan would be somehow cutting out the middleman, marketing directly to people who want to use the land themselves rather than fix it up and flip it.
Interesting perspective. I agree that might be an issue. I think your solution could fix the issue. But of course that presents the issue of how to do that marketing? I guess that presumably if you consulted with a bunch of construction companies and such first? Since they would be one of the possible users?
Or I guess they could hire some real estate agent types to work for the government directly and handle marketing and selling the land to be developed to people who might develop it?
Ideally this would even be extended to like getting the Uniform Law Commission (or similar group) to create a Uniform Land Code, which could be used as an example to be implemented in states across the country.
Interesting to see a variation of the “partial implementation, partial results” argument that a lot of us like being used even back then.
This is great. Thank you for taking the time for bringing this together.
Reading some of the history of the Altoona LVT experiment made me thing that it would be helpful to layout a practical series of steps that municipalities, counties, or states could follow to implement an LVT.
Specifically it seems like the distressed communities trying to implement an LVT ran into the following doom loop.
1) Implementing an LVT required a large increase to the mill rates (though of course only applied to land) which was politically confusing and also an information/complexity barrier to potential investment.
2) Implementing an LVT ended up causing a lot of private land owners to abandon their land to the city, which reduced the tax base and required further increases in LVT rates to compensate (along with infrequent reassessment)
3) The combination prevented the formation of a stable equilibrium where the theoretical benefits of LVT could be shown.
Obviously I'd love to see you guys do a full retrospective and especially interview some of the people who were involved to get a closer look then the newspaper stories, but it does seem like there needs to be a plan for implementing an LVT in a way that generates a stable revenue base (the one that jumps out to me is the requirement for swift auctioning of abandoned land, probably tying into the assessment system somehow). Once you have a stable LVT, you should be able to gradually shift taxation from other sources into the LVT instead.
If those private land owners are mostly abandoning no-longer-sufficiently-profitable rental properties, it might be better to simply hand the deed to the tenant / occupant when reasonably possible - less procedural hassle for everyone involved that way, and minimizes the risk of "this policy directly rendered me homeless" stories turning into a catalyst for backlash.
When auctioning a vacant unit is necessary, advertise it on Craigslist or similar websites catering to apartment-seekers, taking special care to emphasize that modifying whatever structures are present is not only permitted (within reason - safety standards still apply) but actually encouraged.
If I recall correctly from the newspaper articles I saw, most of the abandonment was of owned but unused land (i.e. land held for speculative purposes) that the city had hope a LVT would cause to be developed. When it instead began being abandoned in mass, the city's began acquiring a lot of public land and had little success getting out of city developers to bite (the reason I saw given was that developers were scared off by the rising mill rates without understanding what they meant and that the city struggled to make a successful pitch to them because developers distrusted and were confused by the change in the status quo that the LVT represented).
I suspect that's less a matter of confusion as such, more that they were trying to pitch a policy intended to discourage land speculation to a bunch of de facto professional land speculators. Better plan would be somehow cutting out the middleman, marketing directly to people who want to use the land themselves rather than fix it up and flip it.
Interesting perspective. I agree that might be an issue. I think your solution could fix the issue. But of course that presents the issue of how to do that marketing? I guess that presumably if you consulted with a bunch of construction companies and such first? Since they would be one of the possible users?
Or I guess they could hire some real estate agent types to work for the government directly and handle marketing and selling the land to be developed to people who might develop it?
Ideally this would even be extended to like getting the Uniform Law Commission (or similar group) to create a Uniform Land Code, which could be used as an example to be implemented in states across the country.