I have a new piece up over at Next City looking at the property tax yield for the Philadelphia budget from four similarly-sized land parcels in my neighborhood, all at the intersection of 7th and Fitzwater.
The southwest corner has a municipal surface parking lot. The northwest corner has a small building with a big setback and street-facing parking lot. And the two other corners have some attached three-story rowhouses. Check out how much money the city loses from surface parking:
The southwest corner is obviously a horrible waste of space, but I want to draw your attention to the Northwest corner. That one’s on the tax rolls. But look how little property tax revenue it delivers for the land value.
The southeast corner and the northwest corner are relatively close in value, but the southeast corner produces almost $43K a year for the city budget, while the northwest corner produces a pitiful $4K.
I get into this point more in the piece, but this is why a land value tax is such a good idea.
The tax system needs to penalize development choices that waste expensive land on low-yield uses. The city provides the same services to the northwest parcel as the other corners, but they’re paying way less. Why should that be? Currently teachers and parents are paying the penalty for the failure to use Philadelphia’s land to its greatest potential. Blame Tom Corbett first and foremost for the school funding crisis, but Philadelphia deserves a big heap of blame for encouraging poor use of the one resource it has complete control over.