This policy brief is from the Buffalo Commons Student Perspectives Series.

A land value tax is beneficial to municipalities for five reasons:

1) Land value taxation reduces vacancies. When land value taxes were implemented in Harrisburg, Pennsylvania, the number of vacant lots dropped 80%.

2) Land value taxation increases the amount and value of urban investments. In Allentown, after a land value tax was implemented, building permits increased by 32%. While the land value tax was still active in Pittsburgh, the municipality saw a 70% increase in the real value of building permits. This means there were more high-value investments occurring in the city.

3) Land value taxation can be an equitable and relatively popular tax among the population, because many owners will see tax decreases. In Allentown, 70% of residential parcels saw a tax decrease.

4) Land value taxation has a variety of positive secondary effects on municipalities. Harrisburg’s crime rate decreased 28%, and the city saw the creation of thousands of new jobs. Harrisburg also improved its public image and was recently rated the second-best city in the United States to raise a family. Not even thirty years ago, Harrisburg was ranked the most distressed city in the United States.

5) Land value taxation can help cash-strapped cities like Buffalo increase tax revenue. First, a land value tax increases taxes on vacant land that is currently under-taxed. Second, cities can profit from increased property values that come with new development and improvements that are incentivized by a land value tax system.