Land Value Tax

Richard Florida’s central policy fix in The New Urban Crisis: switching from the local property tax to a land value tax. As the book frames it, “the most effective approach to spurring denser and more clustered development is to switch from our current local reliance on the property tax to a land value tax” — a system that would give “greater incentives to put land in high-priced urban centers to its most efficient and productive use, increasing density and clustering.” It sits at the top of Florida’s broader agenda for the new urban crisis (alongside mass-transit investment over highways, redirecting housing subsidies from homeowners to renters, upgrading low-wage service jobs, and a guaranteed minimum income). The mechanism is a Land Use intervention: by taxing the underlying land value rather than the structures on it, it pressures owners of valuable, underused urban land toward denser development.

Context: A land value tax (LVT) is a levy on the unimproved value of land itself, independent of buildings or improvements on it — an idea associated with the 19th-century economist Henry George. Because the tax doesn’t rise when an owner develops a parcel, it is argued to discourage speculative land-banking and encourage productive use, while being hard to avoid since land cannot be moved or hidden.

Where this appears

• The New Urban Crisis — names the property-tax-to-LVT switch as the most effective way to spur denser, clustered development
• Richard Florida — the LVT is the lead item in his policy agenda for addressing urban inequality and sprawl