Forces Shaping Urban Development: The Property Tax.

L. A. Dougharty

Expert InsightsPublished 1973

Reviews previous research and develops new models of property tax effects on urban blight, density, and urban sprawl. Unlike earlier studies, this paper considers the magnitude as well as the direction of impacts, and compares alternative assessment practices and rates of the property tax versus a land-only tax. (More information is needed to state magnitudes confidently, however.) Assessing depreciated value rather than market value promotes blight by discouraging maintenance and replacement. Contrary to others' theories, tax rates too are found to affect maintenance expenditures. With a density model based on the optimizing behavior of the individual entrepreneur, tax level is irrelevant to density with conventional property taxes, but with site value taxes can affect building height by up to 25 percent. Other forces for leapfrogging development far overshadow the effect of property taxes. Indeed, Bahl's model demonstrates that property taxes actually act as a constraint. A critical bibliography of 46 monographs is appended. 54 pp. Bibliog.

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Dougharty, L. A., Forces Shaping Urban Development: The Property Tax. Santa Monica, CA: RAND Corporation, 1973. https://www.rand.org/pubs/papers/P5022.html.
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