Burnham has been supportive of a land value tax for a long time, having said so repeatedly over fifteen years. With him in office, there are now two major world leaders who have secured office in the past year while championing taxing land. Last year, Stephen Hoskins covered South Korea’s Lee Jae-myung and asked whether South Korea had just elected a Georgist president.

What Burnham has said

Burnham first spoke of land value tax publicly during his 2010 Labour leadership bid, when he pitched an annual tax on the value of land to abolish stamp duty (and floated doing the same to inheritance tax). After that, it mostly went quiet through his years as Greater Manchester mayor, where his attention was on housing and brownfield land rather than the national tax base.

However, in a 2022 LBC interview he called an LVT “a very productive form of taxation.” In his framing, LVT pushes land into use because “if people are sitting on it and hoarding it, they get taxed.” And over the past year it has moved from an occasional aside to a headline plank. At his May 2026 campaign launch he said he had “long been persuaded of the argument for a Land Value Tax,” called council tax “highly regressive,” and criticized the status quo policy’s 1991 valuations as “not justifiable.” As Prime-Minister-in-waiting he kept the thread going, arguing simply that land in the UK is “under-taxed.”

Reasons to taper our expectations

While Burnham has championed a land value tax in the recent past, turning campaign support into legislation will prove much harder.

It’s possible that Burnham simply pivots to a more traditional property tax, aligning the UK with the precedent set by the US. Burnham has backed Fairer Share‘s proposal, which is a tax on the whole value of a property, land plus building. This would still be a massive improvement over the UK’s current system, but as we like to say, a property tax is not a land value tax. Taxing the building back in reintroduces exactly the disincentive to build that an LVT can remove.

Even with the political will, it is daunting to do a full national tax overhaul. A land value tax means putting a number on the land under every property in the country and then keeping those numbers current, which takes an assessment office to produce them and an appeals process for the inevitable disputes. Britain hasn’t revalued homes for council tax since 1991; an LVT asks the state to value land more finely, and more often, than it ever has for housing. And the transition bites: on day one some households will see their bill fall and others see it jump, and the ones facing a jump may be loud.

And, well… seventh PM in a decade. Britain has burned through Prime Ministers at roughly one every eighteen months lately, and standing all of that up is a project measured in years, not months — it needs someone still holding the keys to Number 10 when the bill finally matures. History suggests not betting the house on any one tenant.

The UK’s property taxes are a mess

With expectations set, it’s worth setting the table on why this reform matters because the system Burnham would be reforming is genuinely broken. The UK taxes homes through two main levies: council tax, an annual charge on living in a property, and stamp duty, a one-off charge on buying one (ie, a real estate transfer tax). Between them they raise close to £70 billion a year, and both are badly designed.

Council tax bands every home in England based on what it was worth in 1991 — valuations that are now thirty five years old. The top band, Band H, covers everything worth £320,000 or more in 1991 and has no ceiling above it, which means that £400,000 homes are lumped together with £4 million homes, paying nearly the same bill. All told council tax raises roughly £54 billion a year, about a quarter of what English councils spend, and all based on valuations that everyone agrees are grossly unequal and decades out of date.

Stamp duty (formally Stamp Duty Land Tax) is the tax you pay when you buy a home — a percentage of the purchase price, rising in bands as the price climbs, handed over by the buyer at the closing of the sale. The bands here work like income tax: no duty is charged on the first slice of the price, and each portion above successive thresholds is taxed at a progressively higher rate. The stamp duty is the smaller of the two taxes, but it still raises around £15 billion a year.

So why are both bad?

Council tax is, in Burnham’s own words, “highly regressive.” Because the top band has no ceiling, the more valuable a home is, the smaller its relative share of taxes, and the frozen 1991 snapshot results in a modest terrace up north paying more than a mansion in Kensington. Worse, it taxes the building you occupy rather than the land underneath it, so a boarded-up plot or a surface car park in the middle of a booming city pays almost nothing even as the land beneath it climbs in value, and when the public funds a new rail line that sends nearby land values soaring, the owners simply pocket the windfall.

Stamp duty is broken in the opposite direction: it taxes the act of moving. In one survey of economists it was ranked as the single most damaging tax on the books, because a charge on transactions freezes people in homes: the empty-nester who won’t downsize, the family that can’t upsize, the worker who turns down a job across the country because moving isn’t worth the tax bill. It clogs the housing market and the labor market in one go.

The common thread is what neither tax touches: the unearned value of well-located land. One taxes the improvements, the other taxes the move, and both leave idle and speculative landholding almost entirely alone, which is precisely the gap a land value tax is built to close.

It’s creating a lot of attention

If you are like me, and have google alerts on land value tax, you have seen daily coverage of Burnham for the past month. British tabloids and tax-advisory firms are pumping out “what an LVT means for your home” constantly.

What the modeling actually shows

There are several pieces of research and analysis that look to model the land value tax impacts in the UK.

• PolicyEngine ran the revenue-neutral swap from a council tax to a land value tax and found the budget-neutral rate is 0.77% of land value. At that rate, 68% of households come out ahead: the poorest tenth gains about £481 a year, only the top two income deciles pay more, and poverty ticks down.
  

• Dan Neidle / Tax Policy Associates published their own full report and interactive model of what an LVT would actually do — who pays, who saves, and why. Big winners are places like Middlesbrough (~£1,600/year less); the big losers are prime London and the commuter belt.
  

• And Progress and Property has modeled land value estimates for nearly all parcels in England and Wales. You can look up your own street on the Land Value Tax Calculator and see its estimated land value and what you’d pay under an LVT versus today. This site also has a research tab with interesting stories relating land value to transit proximity.
  

So, how likely is Burnham to follow through?

He is certainly persuaded by the argument, and in his opening speech as PM, he promised a ten year vision to bring down the cost of living for the UK. A tax overhaul will not happen overnight, and will likely require a rollout that will take great political support paired with patient and nuanced administrative considerations. While he undergoes this ten-year vision, he will also need to make sure he can hold the political support to keep his role in a volatile political environment.

None of this should take away from the broader trend: national leaders around the world are being elected to office while supporting land value taxes publicly. Combined with all the state and local leaders we’re seeing in the US, it’s now undeniable that Land Value Tax advocacy is a growing international trend.

Greg Miller is the Executive Director of the Center for Land Economics.

From the Ground Up: A New Report Analyzing LVT Shifts in Cincinnati

Six years ago, as a Junior in college, I started a club called the Notre Dame Student Policy Network. The thesis went something like this: most students studying political science enter college without understanding what a job in policy looks like. Meanwhile, governments and think tanks are understaffed; a student group could partner with governments and think tanks to provide students hands-on, real world experience. The club has grown substantially and continues to do real, impactful work every semester. And somehow, I have ended up on the other end of a Student Policy Network project, being the think tank that partners with the students.

Over the past half year, students at Notre Dame have been investigating Cincinnati’s property tax structure and modeling a land value tax. This week, the Center for Land Economics released the report in collaboration with the Student Policy Network.

The report has the following high level findings:

• About $1.87 billion in land value, nearly one in five parcels, sits vacant or underdeveloped, much of it in the city’s most valuable neighborhoods.

• The median single-family homeowner pays less, with roughly half paying less and about one in four paying more.

• Two-thirds of multi-family parcels see tax cuts above 10%, with the median multi-family property saving about 16% to 17%.

• Vacant parcels see a median tax increase of about 126%, and every vacant lot sees its bill rise more than 10%.

• The burden shifts progressively: the lowest-income neighborhoods see median cuts near 17%, while only the highest-income quintile sees a median increase of about 11%.

The property tax system in Cincinnati creates the wrong incentives. It penalizes those who develop, and subsidizes those who make money from speculating on raising land values. On one intersection in Cincinnati, low income housing is taxed 10-20x more than surface parking and vacant land on the same block.

The report then modeled a 4:1 shift to land value taxes, where the city collects the same property tax revenue on their general operating millage, but land is taxed at four times the rate as buildings. In Cincinnati, the result is a 10% decrease in taxes for the median single family house. Meanwhile vacant land would nearly double in property taxes.

Across neighborhoods, the shift in property tax burdens is progressive. Residential properties in the lowest income neighborhoods see tax decreases on the median of 16.7%, while those in the highest income neighborhoods see tax increases of 10%.

As a quick aside, that increase for the top quintile is heavily concentrated in a couple of wealthy neighborhoods. Those wealthy residents may end up being political opposition, and by nature of their wealth, may have outsized local political power.

If you are a frequent reader of this Substack and our work at the Center for Land Economics, you will be used to seeing the figures above, but they are worth showing again and again: shifting property taxes to land value taxes is a pragmatic policy that solves real incentive problems in our urban cores.

This report comes with the backdrop of a statewide push to abolish property taxes. Lincoln Institute put out a good report last month; to abolish property taxes in Ohio would eliminate over $20 billion for schools and municipalities annually unless municipalities were to increase their pass 13% sales taxes to offset the decreased revenue.

Republican State Senator Louis Blessing has been in vocal opposition to the abolition of property tax proposals; instead, he has put forward a proposal to enable cities to implement split-rate taxes (he spoke about it in our webinar last month). This report is an analysis of what could be possible if this proposal were to pass.

Want to create similar data analysis in your city? We released software that helps anyone model LVT in their local area, and I have a fresh update on that!

Put It On A Map: LVTShift Edition

Lars has a mantra: Just Put it on a Map. It is much easier to notice trends and understand data analysis when you visualize geospatial attributes on a map. Yet, when I launched LVTShift 2.0 (you can now vibe code LVT modeling), it had no map creating feature!

In part, this is because I was in the habit of just bringing its raw exports into mapping software to visualize the results manually. But no longer!

From now on, LVTShift also outputs an HTML file complete with an interactive parcel map on top of a basemap (plain or satellite view). Each parcel can be individually clicked on to reveal parcel information. Further, at the bottom of the webpage is an easy way to also see all the graphs created by the LVT Shift analysis. I have a feeling this is the first step toward something a lot cooler… an interactive visualization of LVT in every city.

Down With Google and Other CivicMapper Updates

How many Slack messages from Lars does it take for me to finally let him get rid of the Google sign in on CivicMapper? It turns out it was more than a couple! But, with no strong reason to keep it, and with increasing updates to CivicMapper, I have finally caved, and we have de-Google-ified CivicMapper.

Now, anyone can view CivicMapper without any sign in. And with so many new cities, we needed a better organized front-end to select the city you want to see.

And as the new map view reveals, CivicMapper has gone international! We have just added Tallinn, Estonia and Copenhagen, Denmark. Both of these places have available open data, and we thought it’d be interesting to explore them. Estonia is particularly interesting as it administers a national land value tax.

More visualization controls

We’ve updated the visualization controls with a couple features requested by users. First, you can disable the 3D view and get a pure top-down, non-extruded 2D map. Next, we took the previous maximum height and made that be the new 50%, so you can really stretch things out now. Finally, we added new color scaling options – adding “logarithmic” to our previous choices of linear and quantiles, and now you can adjust the positions of the colors themselves so you can get the perfect screenshot, just drag the sliders back and forth. You also have the option to invert the color ramps.

Neighborhood selectors

We’re also starting to slowly roll out a new feature – regional overlays AKA “neighborhoods.” These are derived from shapefiles that carve up a city into different areas, and are sourced from open data sources.

This feature was added at the behest of Strong Towns Houston, and the feature is best exemplified in that city:

This is only available in a few cities right now, but where it’s enabled, click on the eye icon to show or hide that region, and click on the rectangle to show or hide the overlay. As you do this, whatever value you’ve currently selected will show an updated summary of the currently visible sum.

The hope is that this feature will aid in live “story-telling” where activists are able to use Civic Mapper to tell stories such as “here’s how much land value is in Downtown alone”. This is particularly effective when combined with the parking lot tab that visualizes how much of that land value is dedicated to surface parking lots:

OpenAVMKit: Marching along

It’s been a while since we have posted about OpenAVMKit–an open-source automated valuation model to value every parcel of a city, and the groundwork of research we are undertaking at the Center for Land Economics. We shipped a major release back in June that not only fixed a bunch of bugs and new features, but also added a ton of robust documentation, which is particularly useful if you want to use AI agent tools to drive the library. You can see the full changelog here. We plan to have another release out sometime in the next month.

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When I started my career as a District Municipal Manager in Bole Sub-City of Addis Ababa City Government in 2008, I did not think I was stepping into one of the most ambitious land value capture experiments in Africa. At the time, my primary responsibility was managing municipal services, overseeing land administration activities, and responding to the daily concerns of residents and investors. However, it soon became clear that many of the challenges facing the city from infrastructure financing to land speculation and tenure insecurity were closely connected to Ethiopia’s urban land lease system.

Over the last 17 years, I have worked with this system from multiple roles and responsibilities. Between 2008 and 2012, I served as a District Municipal Manager and elected council member in Bole Sub-City Administration. From 2008 to 2018, I taught urban land administration courses at various public universities in Ethiopia including the former Kotebe Metropolitan University (the now Kotebe University of Education). Since 2018, I have been a lecturer and researcher in the Department of Real Property Valuation at the Institute of Land Administration at Bahir Dar University. These roles have given me a unique opportunity to reflect on how Ethiopia’s urban land lease system works not only in law but also in practice.

This blog is not simply a review of Ethiopia’s lease proclamations. It is a reflection on how successive legal reforms attempted to solve real problems that I observed as a practitioner. Looking back, the story of Ethiopia’s urban lease system is also the story of a country’s effort to capture land value for public benefit while confronting the realities of rapid urbanization, institutional limitations, and competing interests.

Proclamation No. 80/1993: The Birth of Ethiopia’s Urban Land Lease System

The military government known as Derg , which is an Amharic word for committee, came to power in Ethiopia in 1974 following the overthrow of Emperor Haile Selassie. Influenced by socialist ideology, the regime viewed private ownership of land under the imperial regime as a source of inequality, exploitation, and speculation. In pursuit of its vision of social justice and state-led development, the Derg nationalized all rural and urban land through a series of land reform measures, including the 1975 Government Ownership of Urban Lands and Extra Houses Proclamation No.47/1975.

Under this system, urban land could not be bought, sold, or mortgaged. Instead, the state became the sole owner of all urban land and exercised extensive control over its allocation and use. In practice, a person wishing to build a house, establish a business, or undertake another form of urban development could not purchase a plot on the open market. Rather, land had to be obtained through administrative allocation by government authorities. Once allocated, users were granted rights to occupy and develop the land, often subject to conditions imposed by the state. Land users paid only nominal land rent, and their continued access depended largely on compliance with government regulations.

The system was intended to promote equity by preventing land concentration and eliminating private speculation. However, the absence of market-based allocation mechanisms created significant challenges. Administrative allocation often resulted in bureaucratic delays, inefficient land use, corruption, and informal transactions outside the formal legal framework. Because transfer rights were highly restricted, urban land had little functioning market value, and municipalities generated limited revenue from land. As urban populations expanded and demand for serviced land increased, the shortcomings of the system became more apparent.

In 1991, the Derg regime fell after years of civil war, economic decline, and political instability. It was replaced by the Ethiopian People’s Revolutionary Democratic Front (EPRDF), which introduced a series of economic and institutional reforms aimed at transitioning the country toward a more market-oriented economy while maintaining public ownership of land. Upon assuming power, the Transitional Government of Ethiopia took a decisive step away from the Derg’s permit system by enacting the first urban land lease holding law, Proclamation No. 80/1993. The reform reflected a broader effort to introduce market-oriented mechanisms into urban land management while maintaining public ownership of land.

Unlike the Derg-era permit system, under which urban land was allocated administratively and users generally held indefinite occupancy rights subject to state control, the lease framework introduced market-based valuation, competitive bidding, benchmark pricing, and contractual tenure arrangements for fixed periods. Under the new system, individuals and businesses no longer received land primarily through administrative allocation. Instead, urban land was increasingly allocated through public tender, whereby interested applicants competed by submitting bids, and the highest qualified bidder obtained the right to lease the land for a specified period.

In practice, this meant that someone wishing to build a house, commercial building, or industrial facility could compete for a plot by offering a lease price. However, winning a bid did not confer ownership of the land itself. The land remained publicly owned, and the successful bidder acquired only a leasehold use-right (See FDRE Constitution, Art. 40(3)) for a defined period, typically varying according to the intended use of the land. The leaseholder was required to comply with contractual obligations and make payments in accordance with the lease agreement.

A particularly significant innovation was the formal recognition of the transferability and mortgageability of leasehold rights. As stated under Article 10 of Proclamation No. 80/1993, the leaseholder could transfer, mortgage, or contribute the lease right as capital only up to the value of the lease rent already paid. The law was deliberately designed to prevent land speculation and windfall gains from urban land. This means that if one acquired a lease from the government and later wanted to transfer it, he/she is not supposed to auction the lease to the highest bidder and pocket a large profit. For example, if a person obtained a leasehold plot from the government by paying 100,000 birr and, several years later, the market value of that lease right increases to 500,000 birr, the leaseholder will not simply transfer the lease for 500,000 birr and keep the additional 400,000 birr. Rather, the leaseholder has the duty to pay the difference that is the income which is higher than the rent already paid (in this example 400,000 birr) to the urban administration. The intent of the law was that increases in urban land value should accrue to the public rather than to private individuals.

However, the proclamation did not establish a clear mechanism through which the government would directly collect the extra 400,000 birr from a transfer transaction. Instead, it simply restricted the leaseholder’s right to realize that gain. In practice, this meant that the leaseholder could either transfer the lease only within the legal limit or surrender the lease and allow the government to reallocate or re-lease the land. When the government subsequently leased land to a new user, it could capture the higher land value through lease payments. Thus, the appreciation was intended to remain with the state by preventing private capture of the gain, rather than through an explicit tax or charge on the transfer itself.

Regarding lease payments, the proclamation provided that the successful bidder paid the lease price determined through the bidding process. However, unlike the later lease laws, Proclamation 80/1993 was not very detailed about periodic lease payment schedules and annual adjustments. In practice, the lease payment was generally based on the bid value agreed at the time the lease was granted rather than being continuously re-bid or frequently adjusted according to changing market conditions. For example, suppose the municipality offered a residential plot through auction and a person won the bid at 100,000 birr. He/She will obtain the right to use that land under the lease arrangement, but the land would still belong to the state. He/She will not be able to claim permanent ownership of the land itself. If, ten years later, the market value of the land increased to 500,000 birr, Proclamation No.80/1993 does not automatically require one to pay a higher lease amount because of that increase in value.

Under the permit system, land-use rights were highly restricted and could not readily serve as economic assets. The lease system, by contrast, allowed leaseholders to transfer their leasehold interests to others and to use those rights as collateral for loans. For example, a leaseholder who had acquired a plot through tender could subsequently transfer the remaining lease period to another party, subject to applicable legal requirements. Similarly, banks could accept leasehold rights as security, thereby facilitating investment and access to finance.

Transfer and mortgage provisions of proclamation No.80/1993 represented a major departure from the Derg’s Permit system practice because they created an economic value attached to land-use rights, even though ownership of the land itself remained with the state. They also laid the foundation for the emergence of a secondary market in leasehold rights as the law placed strict limits on the transfer of lease rights up to the rent already paid , raising important questions about how increases in land value should be shared between private leaseholders and the public sector- an issue that would become increasingly significant in later lease reforms.

However, Proclamation No. 80/1993 left many critical questions unanswered. Most notably, it failed to clearly define how existing urban holdings acquired under the permit system would transit into the new lease regime. This ambiguity would become one of the most persistent challenges in Ethiopia’s urban land administration, generating uncertainty over rights, obligations, and the treatment of pre-existing holdings.

Beyond this transitional gap, the proclamation’s design revealed a number of structural weaknesses. Although the proclamation aims to curb land speculation and ensure that increases in land value accrued to the public, the law placed strict limits on the transfer of lease rights. Leaseholders could transfer their rights, but they were generally not permitted to capture increases in land value beyond the lease payments they had already made. While this approach reflected the government’s commitment to social equity and public ownership of land, it also reduced incentives for private investment and hindered the emergence of a vibrant and transparent land market.

In addition, the proclamation also struggled to translate its land-value-capture ambitions into a workable institutional framework. Although it sought to prevent private windfall gains from rising land values, it did not establish a clear mechanism through which the state could directly capture and redistribute those gains. As a result, the law restricted private appropriation of land-value appreciation without providing an effective alternative system for public value capture.

Additional challenges stemmed from the proclamation’s limited treatment of lease valuation, mortgage finance, and secondary land transactions. The law provided little guidance on how lease values should evolve over time in response to changing market conditions, making the system relatively inflexible. At the same time, restrictions on market-based transfers reduced transparency and may have encouraged informal arrangements outside the formal legal framework. Lease rights were recognized as transferable and mortgageable, yet the absence of detailed rules governing valuation and secondary markets limited their effectiveness as economic assets.

To sum up, Proclamation No. 80/1993 represented an important first step in Ethiopia’s transition from the permit system to leasehold tenure. Yet its rigid approach to transfers, its unclear treatment of existing holdings, and its incomplete framework for managing land-value appreciation revealed significant shortcomings. These limitations would ultimately motivate the more comprehensive reforms introduced in subsequent lease proclamations.

The 2002 Reform: Re-enactment and Expansion

When I assumed office in Bole Sub-City in 2008, Proclamation No. 272/2002 governed urban land administration. The reform had expanded the lease system and sought to make lease holding as the cardinal urban land tenure system. A key development was its broader application: it applied to all urban land, including land held under the previous permit system and other older forms of tenure (Article 3), reflecting a deliberate effort to create a unified urban land tenure framework. The proclamation also introduced a more differentiated structure of lease periods. In Addis Ababa, lease terms extended up to 99 years for residential use, 90 years for education, health, culture and sports, 60 years for industry, and 50 years for commercial activities (Article 6), reflecting an effort to align lease duration with the social and economic objectives of different land uses. It also maintained the critical provisions allowing the transfer and mortgage of leasehold rights (Article 13). These provisions were essential because they transformed leasehold rights into tradable and bankable assets, enabling landholders to transfer land to higher-value users and use their leasehold interests as collateral for investment and development. The 2002 law represented an evolution toward a more sophisticated and market-oriented lease system.

With regard to land value capture, the government’s principal means of capturing urban land value remained the lease allocation process itself, particularly through benchmark prices and competitive auctions for newly leased land. In addition, Article 13 of the proclamation stated that when a leaseholder transferred a lease right, the transfer be registered and conducted according to prescribed procedures. The government could therefore monitor transactions and claim payments associated with the transfer such as transfer service fees. However, while registration improved transparency and administrative oversight, the proclamation did not establish a valuation mechanism through which the state automatically claimed a share of the appreciation realized by the transfer.

On paper, the system appeared sophisticated. In practice, however, I observed challenges almost immediately. One experience from my tenure in Bole Sub-City vividly illustrates the tensions surrounding land-value appreciation. Residents displaced by urban infrastructure development projects such as roads frequently came to my office to complain about the compensation and replacement arrangements offered to them.

I remember the complaints and grievances of dwellers of Bole Rwanda whose property was demolished by the Rwanda Street project. Their argument was often straightforward: the compensation they received did not reflect the current market value of the land and property they were losing. Many felt that the rapid appreciation of land values in Bole- driven by urban growth, infrastructure investments, and expanding commercial activity was not adequately recognized in the compensation process. From their perspective, they were being asked to surrender assets whose value had increased substantially over time without receiving a commensurate share of that increase. These complaints highlighted a broader policy question that continues to shape debates on urban land governance in Ethiopia: when urban land values rise as a result of public investment and citywide development, who should benefit from that increase for the individual occupant, the leaseholder, or the public sector?

The 2002 proclamation sought to address this dilemma by allowing private actors to benefit from the transfer and mortgage of lease rights while enabling the state to capture a portion of land value through benchmark prices and competitive lease auctions. Because urban land remained publicly owned, municipalities could recover a substantial share of land value at the point of allocation. In rapidly growing areas of Addis Ababa, rising demand for urban land translated into higher lease revenues, allowing the public sector to capture some of the value generated by urbanization, infrastructure investment, and economic growth. From an administrative perspective, the reform represented a shift from a system that sought to prevent private land-value gains to one that attempted to balance public value capture with market incentives for development. Yet the complaints I encountered from displaced residents demonstrated that the question of how land-value gains should be shared remained far from settled.

Furthermore, one of the most difficult issues I faced involved what the law called “old possessions.” The reform continued to struggle with the fundamental challenge of converting pre-existing holdings into leasehold tenure, as its provisions on the issue lacked the clarity and enforcement mechanisms needed to achieve a comprehensive transition. Almost every week, residents arrived at my office carrying documents issued under previous land tenure systems. Some had acquired land during the Imperial period; others held permits issued under the Derg regime. Although the law envisioned a gradual transition toward a unified lease system, there was no clear roadmap for conversion. As a result, we were effectively administering two parallel systems. Leaseholders operated under one legal framework while holders of old possessions operated under another. This created confusion in taxation, valuation, compensation, and property transfers. It also generated frustration among citizens who often struggled to understand their rights and obligations.

Regarding the lease tender process, the City Administration has introduced several important reforms aimed at enhancing transparency and expanding public access. These include publishing tender announcements on its website and through radio broadcasts, digitalizing the purchase of tender documents via platforms such as 2merkato and Telebirr, and disclosing the names of successful bidders in local newspapers such as Addis Lisan(see figure 2). While these measures represent meaningful progress, I have also observed persistent institutional and procedural shortcomings that continue to undermine the effectiveness and credibility of the lease tender system.

While competitive bidding was intended to promote transparency, collusion among bidders was not uncommon. In several cases, investors coordinated bids to suppress prices, reducing the amount of land value captured by the city. Municipal officials often suspected such practices but lacked adequate legal tools to address them. For example, I recall a specific tender in 2010 for a prime commercial plot near Bole Medhanealem Church. The bid documents were sold, and multiple bidders appeared. However, I later discovered through internal investigations that several of the bidders had colluded, agreeing among themselves on a ceiling price to keep the winning bid low. The “winner” was a front for a well-connected investor. When I raised concerns with city-level superiors, I was told to proceed since proving collusion was nearly impossible under the existing regulations. The 2002 proclamation had no explicit anti-collusion provisions in its tender process (compare with Proclamation No. 721/2011, Art. 11, which introduced more detailed competitive criteria). This was a daily frustration: we knew the system was being gamed, but we lacked the legal tools to stop it.

Proclamation No. 721/2011: Why Reform Became Necessary?

By 2011, it had become increasingly clear that the 2002 lease proclamation was not adequately addressing many of the problems emerging in Ethiopia’s rapidly urbanizing cities. During my time as District Municipal Manager in Bole Sub-City, I saw these challenges firsthand.

One of the most visible problems was land speculation. Although the lease system had been designed to ensure that land would be developed productively, many investors were acquiring leasehold rights with little intention of building. Instead, they held land for a short period and then transferred their lease rights to other buyers at substantially higher prices. In many cases, significant profits were being generated without any actual development taking place.

As municipal officials, we frequently encountered vacant plots in prime locations that had remained undeveloped for years. While the city struggled to finance infrastructure and provide services for a growing population, valuable urban land remained idle. The result was not only inefficient land use but also a growing perception that the lease system was benefiting speculators more than the public.

Weak enforcement compounded the problem. Although existing laws required leaseholders to begin and complete construction within specified periods, enforcement was often inconsistent. Limited administrative capacity, lengthy legal procedures, and political pressures made it difficult to reclaim undeveloped plots. Some leaseholders repeatedly sought extensions, while others simply ignored development obligations. The gap between what the law required and what happened in practice became increasingly apparent.

The issue of old possessions also remained unresolved. Despite nearly a decade of implementation under the 2002 proclamation, cities continued to operate under parallel tenure systems. Municipal offices struggled to manage leasehold properties and old possessions simultaneously, creating confusion for both administrators and citizens.

It was within this context that Proclamation No. 721/2011 was introduced.

The new proclamation represented a deliberate attempt to address many of the weaknesses that had become apparent under the previous legal framework. It significantly tightened rules governing the transfer of lease rights. Under the new system, leaseholders transferring undeveloped land could retain only a small portion (5 %) of the transfer lease value, while the government captured the majority (95%) of the gain. This was intended to discourage speculative transactions and reinforce the principle that land should be used for development rather than quick profits.

The proclamation also introduces a vivid and limited set of modalities for land acquisition, ignoring the earlier methods of negotiation and lot in favour of only two: tender (auction) and, under exceptional circumstances, allotment (Article 7.2). These exceptional cases include allocations for public institutions and public services, condominium and government housing programmes, diplomatic missions, religious institutions, strategic investment projects approved by the government, and land provided as compensation or relocation for persons displaced by public development projects. By making auction the default mechanism and limiting allotment to clearly defined public-interest cases, the proclamation sought to strengthen transparency, improve market efficiency, and enhance the state’s ability to capture urban land value through competitive bidding.

With respect to land value capture, Proclamation No. 721/2011 did not fundamentally alter the previous lease proclamations provisions but significantly strengthened its implementation. The proclamation made competitive tender the default mechanism for allocating urban land, thereby enabling the state to capture land value through market-based bidding. It also required benchmark lease prices to be established and periodically revised to reflect changing market conditions, reducing the risk that valuable urban land would be allocated below its economic value. In addition, the law introduced more comprehensive rules governing lease transfers, valuation, registration, and administration, improving transparency and strengthening the government’s capacity to regulate the urban land market. Compared with the 2002 proclamation, the 2011 reform shifted the focus from simply permitting market transactions to building a more robust institutional framework through which the public could recover a greater share of the land value generated by urban growth and public investment.

The proclamation also introduced stricter construction deadlines and stronger provisions for repossessing land from non-performing leaseholders. It limited the use of leasehold rights as collateral and strengthened government oversight of land transfers. In addition, the most significant reform introduced by Proclamation No. 721/2011 regarding old possessions was that it moved beyond simply recognizing them as the 2002 proclamation had done and established a clear legal framework and principles for their eventual conversion into the lease system. Although the conversion was still not immediate, the 2011 proclamation substantially clarified the legal status of old possessions and identified the circumstances under which conversion would occur.

From my perspective, the 2011 proclamation was a necessary response to the realities we were confronting on the ground. It addressed several genuine weaknesses in the system and demonstrated a growing recognition that market mechanisms alone could not ensure efficient and equitable urban land development.

The Draft 2024 Proclamation: Lessons Learned and Remaining Challenges

Although the 2011 proclamation introduced important reforms, implementation challenges persisted. As I transitioned from municipal administration to teaching and research, I became increasingly interested in understanding why some problems continued despite repeated legal reforms. The draft 2024 Urban Land Lease Proclamation reflects many of the lessons learned from nearly two decades of lease system implementation. In many respects, it represents the most ambitious attempt to modernize urban land governance in Ethiopia.

One of its most important contributions is its stronger emphasis on transparency and accountability. During my years in municipal administration, one of the recurring concerns among citizens was the perception that land allocation processes lacked transparency. The draft proclamation explicitly recognizes the need to reduce opportunities for corruption and maladministration while strengthening public trust in land administration institutions.

Another notable improvement is its emphasis on modern land information systems. Throughout my professional career, I have observed how inadequate land records, outdated cadastral information, and fragmented databases hinder effective land administration. The draft proclamation acknowledges these challenges by promoting digital land administration systems and improved cadastral management.

The draft also seeks to improve land valuation practices. One of the recurring weaknesses of the lease system has been the failure to regularly update benchmark prices in many cities. As a result, governments have often captured only a fraction of the actual increase in land values. The draft’s requirement for periodic benchmark price revisions represents an important step toward strengthening land value capture.

Furthermore, the draft places greater emphasis on integrating land allocation decisions with urban planning objectives. This is particularly important because land policy should not be viewed solely as a revenue-generation tool. Effective urban land management requires balancing fiscal objectives with housing affordability, infrastructure provision, environmental sustainability, and broader development goals.

However, an important question remains: does the draft go far enough?

In my view, several fundamental challenges remain unresolved.

The first is the continued existence of old possessions. Despite being recognized as a major challenge across successive proclamations, Ethiopia still lacks a comprehensive and nationally coordinated strategy for converting old possessions into the leasehold system. Without resolving this issue, legal dualism will continue to complicate urban land administration.

Second, institutional capacity remains a major constraint. New laws can establish ambitious objectives, but implementation ultimately depends on capable institutions, skilled professionals, reliable information systems, and adequate resources. Many urban administrations continue to face significant capacity limitations.

Third, there is an ongoing tension between maximizing revenue and promoting social equity. As lease prices continue to rise, concerns about affordability become increasingly important. Policymakers must ensure that land value capture mechanisms do not inadvertently exclude lower-income households from access to urban land and housing.

Finally, enforcement remains a challenge. Strong legal provisions have limited impact if they are not implemented consistently. Future reforms should focus not only on improving laws but also on strengthening monitoring systems, administrative accountability, and institutional effectiveness.

Conclusion: What Ethiopia Can Learn from Three Decades of Land Leasing

Looking back over more than thirty years of urban land leasing in Ethiopia, one lesson stands out clearly: legal reform alone is not enough.

The progression from Proclamation No. 80/1993 to Proclamation No. 272/2002, Proclamation No. 721/2011, and the draft 2024 proclamation reflects a continuous effort to improve the management of urban land and capture publicly created land value for public benefit. Each reform emerged because weaknesses in the previous system became increasingly visible through practice.

My experience as a municipal manager taught me that land administration is ultimately about people, institutions, and incentives. My years as a lecturer and researcher have reinforced the importance of evidence-based policy reform and institutional learning. The Ethiopian experience demonstrates that public land leasing can be a powerful land value capture tool. It can generate substantial revenue for infrastructure, support urban development, and help ensure that increases in land value created by public investment benefit society rather than a small group of private actors.

At the same time, the experience also reveals the limitations of relying solely on legal reforms. Sustainable success requires transparent institutions, professional valuation systems, effective enforcement, modern land information systems, and a commitment to balancing economic efficiency with social equity. As Ethiopia continues to urbanize, the future of its cities will depend not only on how land is allocated but also on how effectively the value created by urban growth is shared. The central lesson of the past three decades is therefore clear: land value capture is not merely a technical exercise. It is a governance challenge, and ultimately a question of how urban development can serve the broader public interest.

Last week California certified a Billionaire Wealth Tax for the November ballot: a 5 percent one-time levy on the state’s billionaires, paid out over five years, to raise about $20 billion a year for health care, food aid, and schools after federal cuts. We understand the impulse. The state has a revenue hole, and billionaires can afford to help fill it.

But the tax will fail at the thing it’s for, and it will fail for a simple reason: billionaires, unlike land, have feet.

We just spent months building the empirical case, calculating the aggregate of California’s land values, in a new report from the Center for Land Economics. The short version: land is one of the biggest pools of wealth there is, California has more of it than almost anything else, and it cannot leave the state.

California’s Land is a Big Deal

We estimated the total value of California’s land, summing it up parcel by parcel: about $8.14 trillion. We checked that figure two more ways — against federal housing-finance data and against time-trended sales — and all three methods land in the same range. It is, as far as we know, the first credible bottom-up estimate of what California’s land is actually worth.

That number is roughly eight times the billionaire wealth the state can still realistically tax. Los Angeles County’s land alone is worth more than the entire billionaire base the wealth tax is chasing. The Bay Area’s is close behind.

And land is the rare tax base that just sits there. A billionaire can move to Austin. While their portfolio can move in an afternoon, their land cannot.

The wealth, meanwhile, has feet

The wealth tax’s own math assumes a $2 trillion base, which is a nearly 2x overestimate due to wealth flight.

Six California billionaires — Larry Page, Sergey Brin, Peter Thiel, Don Hankey, Travis Kalanick, and Steven Spielberg, worth roughly $540 billion combined — had already moved their tax residency out of state before the measure’s January 1, 2026 cutoff. Mark Zuckerberg (about $220 billion) followed in early 2026 and will almost certainly fight the retroactive reach in court. Add a roughly $200 billion overestimate that other economists have flagged in the proposal’s own model, and nearly half the assumed base is gone.

To still raise its $20 billion against what’s left, the rate would have to climb from 1 percent toward 1.6 or 1.9 percent depending if Zuckerberg prevails in court, which only gives the billionaires who stayed one more reason to follow their neighbors out. This is the trap with taxing a small number of mobile people: raise the rate to chase the ones who left, and you push out the ones who remained.

A quarter of a percent

Here is the comparison that should reframe the whole debate.

A land value tax of just 0.25 percent would raise the same $20 billion a year the wealth tax promises on a base eight times larger, that grows with California’s economy instead of fleeing it, and that cannot move. (Go bigger and the math still holds: a rate of about 1 percent would cover California’s entire $87 billion health and human services budget, in perpetuity.)

A land value tax is just an ordinary property tax with one change: it falls solely on the value of the land and not the buildings on it. The land value tax can’t be dodged by leaving nor can it be passed on to renters. Meanwhile, it captures the windfall the public itself creates: when the state builds a transit line, the surrounding land gets more valuable, and the tax returns part of that to the people who paid for it.

Because land value is wildly concentrated, the burden lands hardest on the prime coastal lots and downtown blocks owned by those with the most, and barely touches a working family’s house in the Central Valley. It reaches the wealthy without having to chase them.

The real problem is fifty years old

None of this is really about billionaires; California reaches for exotic taxes because its normal one has been broken since 1978.

Proposition 13 capped property taxes and froze assessed values until a property sells, so a long-tenured owner can pay a small fraction of what the young family next door owes on an identical house. We estimate California now assesses property at somewhere between 44 and 60 percent of what it’s actually worth. In other words, the state has quietly chosen not to collect on roughly half its own real-estate base. As property revenue fell, income taxes rose to fill the gap, which is how California ended up with the highest income tax rate in the country and a revenue base that walks out the door whenever it’s squeezed. The wealth tax is the most desperate squeeze yet, and it does nothing to repair the base underneath.

Everyone is running from the best tax we have

The same mistake is being made everywhere. Land value taxation is about as close as economics gets to a free lunch, yet from Florida to California, they are ignoring it.

Florida is trying to abolish its property tax; critics estimate the lost revenue would have to be made up by roughly doubling the state sales tax, trading the one tax that doesn’t distort the economy for one that taxes every purchase working families make. California is going the other way, layering a brand-new tax on mobile billionaire wealth on top of an already-broken property tax. Both should look instead to the tax base sitting right under their feet.

The wealth California can actually tax is the ground itself: stable, enormous, made valuable by all of us, and incapable of moving to Miami.

Greg Miller and Lars Doucet are co-founders of the Center for Land Economics.

(Spanish translation available here)

In 2023, Norwegian Researchers Jonathon Moses and Anne Margrethe Brigham wrote an excellent book called The Natural Dividend, whose basic argument is that natural resources are a big deal. If I had to summarize it in one sentence, it would be:

The Earth’s bounty belongs to everyone, private property rights are good, labor and capital deserve a fair return, and please don’t hand over our precious natural resources to Some Guy.

NOTE: Long-time readers will recall that we have covered some of this material before; I previously wrote a short primer on this blog concerning Norway’s petroleum management system and wealth fund; I also translated a research paper by Moses and Brigham entitled “The New Oil” into English, which is the predecessor to The Natural Dividend.

While the book’s arguments could also apply to conventional land, its scope is grander, amounting to no less than a comprehensive economic framework concerning all natural resources and opportunities. The authors’ central concern is the titular “Natural Dividend,” which is the bounty that flows not from any individual’s effort or investment, but instead from the free gifts of nature and the scarcity that arises when governments and private actors enclose and commodify them. The authors argue that most conventional natural resource management policies miss this entire point, and in so doing squander the National Dividend.

As for the Natural Dividend itself, it is classic economic rent—a windfall return far in excess of the cost of production—and which consists of three components: differential rent, locational rent, and regulatory rent. Understanding how each of these arises is essential not only for understanding how natural resource wealth is commonly squandered, but also how it may be secured for its true and rightful owners, the community itself.

The book itself is written in clear and practical English, and presents a thorough and empirical case study of how the different flavors of economic rent play out in real world scenarios. The authors cover many detailed case studies concerning topics as varied as hydropower, wind, solar, fisheries, fossil fuels, subsurface minerals, and more, with the strongest examples drawn from over a century of hard-won Norwegian lessons in natural resource management. This book will be of particular interest to anyone who wants to extend Georgist thought beyond land itself, as well as anyone with a specific interest in natural resource management and/or sovereign wealth funds.

This book review is divided into four main sections:

1. The Natural Dividend
   How it arises, what it’s composed of, and who captures it

2. Enclosure
   The process by which nature is commodified into natural resources
   

3. The Resource Curse
   The bad things that happen when you ignore the Natural Dividend
   

4. Lessons from the Norwegian Tradition
   How to avoid the resource curse, ensure efficiency and investment, and secure the Natural Dividend for the community instead of Some Guy

The Natural Dividend

To prime our intuition, the authors give the example of a family that owns a large estate, and which wants to dig a water well on their property. The family has several options for developing their resource: they can dig the well themselves, relying entirely on their own labor, capital, and expertise, or they can hire someone to do it for them. If they hire a contractor, there’s no limit to the financial arrangements sufficient to motivate a competent worker: an up-front fee, an hourly rate, a royalty share of water drawn for the next three years, etc. However, there’s one arrangement that makes no sense—the contractor simply shows up and declares, “I’ll do it only if you give me exclusive ownership of the water, forever.”

In this parable, the family represents the community, the estate represents the world, and the contractor represents the private sector1. Since no person created the Earth, and the initial distribution of resources is essentially random, the natural and rightful owners of any particular part of nature are those who would be harmed or excluded when the resource is enclosed for exclusive private development. In practical terms, this resolves to the local population of the state which exercises sovereignty upon those resources. Private interests are welcome to develop the people’s resources (and get rich doing so) but they should never forget that the people are ultimately in charge, and that the Natural Dividend rightly belongs with them.

Next, let’s understand how the Natural Dividend itself arises.

1. Differential Rent

Differential rent is easiest to understand in an agricultural context. Some plots are more productive than others, simply because their soil is more fertile, or they’re less rocky, or not on the side of a mountain, etc. This applies not only to literal land but “all natural opportunities”—one vein of ore has more valuable minerals than another, one fishery is abundant and the other is tapped out, etc. Differential rent has to do with the inherent powers and opportunities inherent to the site or resource itself.

The origins of the differential rent can be traced Ricardo, who described it as “that portion of the produce of the earth, which is paid to the landlord the use of the original and indestructible powers of the soil. It is often, however confounded with the interest and profits of capital, and, in popular language, the term is applied to whatever is annually paid by a farmer to his landlord”
…
It is important to realize that the difference in productive capacity, which attracted Ricardo’s attention, is not limited to farmland, but can be found in any natural resource: some wind sites are more productive than others; some mines are more productive than others; some aquaculture sites are more productive than others; etc. It is difference that creates the unearned rent — hence differential rent.

The best way to understand this is to notice that the same amount of labor and capital, applied to both a superior and to an inferior resource or site, will yield different returns. The difference is differential rent, which is the first component of the Natural Dividend.

2. Locational Rent

This form of rent comes not from the thing itself but from its surroundings. Regardless of how many bushels of corn a particular patch of dirt can grow, if there’s no road connecting it to a market, and no pipes to keep it irrigated, its earnings potential will greatly diminish. The same goes for other natural resources, energy in particular, where prices are governed not only by global supply and demand, but by how much local supply can actually be transmitted to where it’s wanted.

Those sites that are located nearest the market, or are near to an efficient infrastructure that facilitates access to that market, are more valuable, ceteris paribus, than aquaculture sites that lie far off the beaten path. As we shall see in the chapter that follows, this difference in locational advantage generates another part of the Natural Dividend - what we call a locational rent.

Two equally fertile sites can still yield wildly different returns from the same amount of labor and investment, simply because of where they are located. If one plot lies too far away from infrastructure, the bountiful crops will rot long before reaching market, whereas the others will arrive swiftly and fetch a premium for being sold fresh. Crucially, the value from the surroundings are not provided by the site’s owner, but by nature, neighbors, and the community at large. The difference in returns between two equally productive sites due solely to their surroundings is locational rent, and is the second component of the Natural Dividend.

The line between differential and locational rent can sometimes get a little blurry (is good weather differential or locational?), but the important thing is that both of them clearly stand apart from the third kind of rent.

3. Regulatory rent

The very act of regulating access to a resource or commodity—even and especially if that regulation is entirely justified—limits access to others who might want to develop it, forming a kind of localized monopoly. This allows whichever person who happens to hold the rights to that thing to capture a windfall rent.

Let me give an example from my personal life. I have cataplectic narcolepsy, a serious neurological disorder that can be treated safely and effectively by a drug called Sodium Oxybate, trade name Xyrem. However, this drug is chemically identical to a notorious street drug. If the government were to allow this drug to be sold on the open market, it would be far easier to abuse. However, if the government banned it entirely, narcoleptic patients who have no alternative treatment would suffer greatly. The government’s compromise was to simultaneously classify Sodium Oxybate as both Schedule I (ex: Heroin) and Schedule III (ex: Testosterone), ban it for all purposes except treating narcolepsy, and grant exclusive manufacture and distribution rights to one company so regulators could keep a close eye on them.

The unsurprising result is that Sodium Oxybate is outrageously expensive. It wholesales for $7,460 a bottle, or $82.89/gram. This is not because it is costly to produce—adjusting for inflation, this same drug sold for $1.05/gram in the late 80’s as a bodybuilding supplement. The price also can’t be justified as necessary to recoup the costs of drug discovery, because the drug was described as far back as 1874.

This is a whopping 79x inflation in price. This premium is not necessary to attract the labor and capital to bring the drug to market, but as pure rent created by restraints on competition. Patients (or more typically, their insurers) pay the increased cost, and the windfall flows entirely to the private company.

To be clear, I am not arguing that Sodium Oxybate shouldn’t be regulated, as the drug’s dangers are very well known. However, it is quite the logical leap to go from “this drug is dangerous in the wrong hands and needs to be monitored carefully” straight to “therefore, it should be 79x more expensive and that windfall should go entirely to Some Guy.”

These are the different forms of rent that comprise the Natural Dividend. However, for there to be any value to natural resources at all, human beings must first take possession of them.

Enclosure

The authors begin this section with a simple question: “who owns the Sun?”

Nobody can claim exclusive use of it. We can even capture its rays with solar panels or tomato plants. In so doing we take the free gifts of nature, enclose them, and commodify them into something new—a natural resource. Some natural forces, like sunlight and oxygen, are so abundant that everybody can take as much as they want and it’s fine because we’ll never run out. However, if one day someone found a way to monopolize the sun or the air and and secure their exclusive use, the rest of us would be utterly deprived and forced to pay exorbitant prices just to keep living.

Most of nature isn’t nearly as abundant and uniformly distributed as the Sun and the atmosphere. Consider farmland, oil, drinking water, or Norwegian fjords suitable for salmon aquaculture. These are all scarce in supply and unequally distributed across the earth. How do we decide who gets to use those, especially the best ones? There’s four different approaches: private ownership, common ownership, public ownership, and open access.

Private ownership is what we’re all familiar with—the resource in question gets parceled up and handed out to individuals for exclusive use. In common ownership, individuals enjoy non-exclusive access bounded by communal norms, traditions, and laws. With public ownership, the sovereign authority itself is both the owner and the decider. The final category is open access, which applies to any resource like air itself where no authority is really able to exercise any exclusive control at all.

The key thing to realize is that private, common, and public ownership—the three most common forms of ownership—all have their origin in the sovereign authority which backs them up. Moses and Brigham implore us to recognize the fundamental effects of government backing of property rights, and what that implies for how the Natural Dividend is captured.

Property Rights

Imagine yourself in an untamed prehistoric wilderness. There is no civilization or any form of human society. In fact, let’s say there are no humans at all—imagine yourself as a large prehistoric cat of some sort. Territorial as most animals are, you seek out a piece of turf to call your own, from which you can secure a ready supply of food, shelter, mates, etc. The only problem is that any territory you might want for yourself, you must fight for, and worst of all, the fighting never ends. You must police the boundaries constantly with credible threats of violence, deterring every animal who challenges your claim. You will spend a significant amount of your resources and bodily energy in this way, and if you ever stop you risk giving up your territory and even your life.

Now imagine you are a human being, and you live in a society. Wouldn’t it be great if we could stop fighting all the time? We could take all that energy we’ve been wasting hurting people and breaking things and put it into making ourselves rich instead. A lawmaker nods his head in agreement and erects some big stones, with durable property rights carved right at the top of the list. Now if someone chases you off your land, you just call the Law, and a bunch of heavily armed men will swiftly beat up the interlopers and hand you back your property.

This changes everything.

Simply by putting a fence around a piece of property, saying, “this is mine,” and having your words backed up with the State’s irresistible monopoly on violence, you massively increase the market value of your property. For starters, you no longer have to pay the ongoing costs of defending your claim, and enjoy those savings immediately. Even better, you can now rest assured that today’s investment will still be there tomorrow, so you can harvest future growth. This both frees up more resources, but also creates a durable incentive to invest them, which in the short term makes everyone in your society wealthier.

Make no mistake, Moses and Brigham agree with all these arguments for privatization for precisely those reasons. However, they further assert that even if we accept that privatizing Nature increases efficiency and raises productivity, it does not logically follow from that premise that “therefore, we should hand over a monopoly on our scarce and precious natural resources to Some Guy.”

Efficiency and Justice vs. Some Guy

The authors make their argument on two grounds: economic efficiency and moral justice.

Economic efficiency

Isn’t competition supposed to be the magic sauce that makes capitalism so unreasonably effective? Why then do we hand out monopoly rights to natural resources, an act which fundamentally limits competition, which invites inefficiency, corruption, ecological damage, and waste? After all, if we hire Some Guy to develop the resources for us, who’s to say the first guy will be the best? What if Another Guy could have done it cheaper and more efficiently?

Moral Justice

Nobody created nature itself, so what moral claim does Some Guy have to the Natural Dividend? If he claims that it’s because of his labor and investment, that seems false. In a competitive market, returns to labor and capital tend to equalize over the long run. The fact that natural resource production so often entails durable windfall returns is a giant blaring warning sign that an unacknowledged Natural Dividend is in play. When the community is excluded from something fundamentally scarce that nobody created, they should be compensated for that exclusion. Therefore, the Natural Dividend rightly belongs to the people, not to Some Guy.

Some Guy

Moses and Brigham anticipate a response from critics, that natural resources are worthless in their natural state until humans work them, and that unless and until we hand over all our natural resources in perpetual fee simple title to Some Guy, they will forever remain worthless. Per this line of thinking, the only incentive sufficient to motivate Some Guy to develop our precious natural resources is an exclusive and durable monopoly. Sure, he might enjoy windfall gains from this, but he also takes a lot of risk and sunk costs, and only the lure of those outsized gains can sufficiently motivate an entrepreneur to bring that necessary labor and capital to bear.

This is what I like to call a “testable hypothesis.”

Moses and Brigham bring over a century of empirical evidence, drawn from Norway’s long history of natural resource management. They show conclusively that indeed, you can have both economic efficiency and distributional moral justice, without handing over the Natural Dividend.

Norway’s petroleum management system is a particularly compelling example of this, an example which is impossible to explain under the critic’s model of the world. Norway’s effective tax rate on oil profits is a staggering 78 percent, and yet Norway is widely considered to have one of the most sophisticated and technically adept offshore and subsea petroleum sectors in the world. One can’t say it’s because the oil is cheap and easy to find, because in Norway “it is much more difficult to get to the oil; it lies deep in the ground, far offshore, covered by deep waters and whipped by terrible weather conditions,” with costs of production per barrel nearly three times as high as in Kuwait. Norway has had no trouble attracting foreign direct investment, building up local competency, selling boatloads of oil, and making everyone involved filthy rich. They did all this, and at the same time captured the bulk of the very windfall profits that critics insist must be privately captured to motivate investment.

Eat the Risk

Moses and Brigham point out one key concession that makes this work: search costs and risk. This sticking point was famously raised in 2012 by Caplan and Gochenour, who argued that Land Value Tax and all related policies make for bad incentives because entrepreneurs need the possibility of windfall gains to sufficiently motivate them to cover the costs of risk and discovery. Ironically, they specifically invoked oil exploration as an example of a domain in which Georgist taxation systems could definitely never work.

All that’s necessary to resolve the contradiction is a small dose of pragmatism. If we start with the premise that the people are the rightful owners of the resource, and risk is a barrier to private investment, how can we get the private sector to efficiently develop the resource and secure the Natural Dividend for the people?

Simple. Let the people underwrite the up-front risk, by having the State eat the cost:

This was done without alienating investors or undercutting their right to a fair return on investment. By minimizing the risk that is always associated with this sort of resource market, Norwegian governments were able to secure a much larger share of the Natural Dividend, relative to other countries. In return, investors receive a more stable, and less risky, investment environment.

Instead of handing out perpetual concessions at cheap rates to foreign companies, Norway set up a carefully crafted system of leaseholds combined with generous R&D exemptions to kill up-front risk for private investors.

A well-designed RRT [Resource Rent Tax] is neutral (as opposed to distortionary) in the sense that the tax will not affect investment and business decisions or entail economic losses. When natural resource investors/producers are driven to maximize the value of their productive activities, a tax on that value will not affect the producers’ (or investors’) decisions. Quite simply, investment and operational decisions that are profitable before the tax will also be profitable after the RRT (only the profit will be redistributed). When the RRT also allows investors and producers to deduct all relevant costs against gross sales income (regardless of whether it employs an accrued profit-based or a cash flow tax), then the state becomes - in effect - a co-investor in these projects and ends up saddling much of the risk. In this way, RRTs reduce the risks that investors/producers face by promising a solid return before the RRT kicks in. By sharing information and ensuring that all the investors’ costs (including a fair return) will be covered, both the government and the investor become better off. In substantially reducing the risks, without distorting her investment and/or operational decisions, the investor can be satisfied with a much lower rate of return.

In other words, if you try to hire Some Guy and ask him to invest a ton of his own resources in a risky operation that might not pan out, he’s going to ask for a huge upside. However, if you cover that downside yourself, he’ll happily accept a much smaller (but much more certain) rate of return.

The Resource Curse

Okay, but what’s the worst that can happen if you’re a bit sloppy with the Natural Dividend and Some Guy winds up with it? Well, the worst that can happen is that your country becomes a playground for rapacious foreign interests, or else your own society gets hollowed out from the inside and stagnates.

We covered this in a previous article, which I’ll reproduce a section from here:

The resource curse is a phenomenon where a bounty of natural resources leads not to prosperity and wealth, but instead to stagnation, corruption, conflict, and even authoritarianism. According to the national resource governance institute:

Political scientists and economists argue that oil, mineral and gas wealth is distinct from other types of wealth because of its large upfront costs, long production timeline, site-specific nature, scale (sometimes referred to as large rents), price and production volatility, non-renewable nature, and the secrecy of the industry.

Because resource-rich governments get their money from extracting natural resources rather than the economy at large, they don’t have as much incentive to build a well-developed and diversified economy in the first place.

When the productive power of the people themselves is no longer the source of the government’s wealth it becomes easy to either ignore them entirely, or to exclude everyone except a favored in-group. A subset of the resource curse is called Dutch disease, where resource extraction can have negative effects on the rest of the economy:

Dutch Disease, named after what the Netherlands experienced in the 1960’s, is when windfall gains from natural resources become “too much of a good thing”, and crowd out other sectors of the economy, leading to a weird kind of stagnation. The direct cause of this is the sudden influx of wealth which drives up local currency values, making everything more expensive for the non-resource sectors of the economy, which become less competitive as a result. In the Netherlands, this resulted in increased unemployment and decreased investment, and an overall decline in their manufacturing sector.

Lessons from the Norwegian Tradition

The book covers a lot of different case studies, but the two cleanest examples relevant to our discussion are the Norwegian hydropower sector in the early 1900’s, and the petroleum sector in the latter half of the 20th century.

Hydropower

For most of its history, Norway’s beautiful and pervasive mountain ranges were actually an economic liability, as they left the country with the smallest amount of arable land in all Scandinavia. This handicap became an asset in the 20th century when the potential for harnessing the country’s numerous waterfalls for hydropower was discovered. Given that Norway had just achieved its independence in 1905, the chief concern was not just how to keep this windfall from falling into private hands, but also foreign hands, who were eager to buy it all up.

Given this was the early 20th century, the relevant policymakers were directly influenced by a particular American economist:

It was this desire to secure the Natural Dividend that prompted the Norwegian government to introduce a hydropower concession regime, inspired by the work of Henry George, and specifically designed to capture the Natural Dividend for local and national authorities.

Three policies were enacted. The first was a windfall gains resource rent tax, which allowed for a “healthy” return on investment by private interests, but which taxed any excess profits above that threshold. Second was a mandate that 5-10% of the produced energy be distributed for free to the surrounding community. The third and final policy was the principle of hjemfallsrett, meaning escheat, ensuring that Norwegian hydropower sites would revert to public ownership over a 40-60 year time period. This time table is significant because it is past the point where typical investor discount rates push the net present value of future returns nearly to zero. That is, it’s so far off that the investor doesn’t really care what happens by that point in any way that would affect their investment decisions today.

In this way the Norwegian people secured the Natural Dividend for themselves, and at the same time provided handsome rewards for Some Guy to build up their hydropower resources. The net result is that for the last century, Norway has provided essentially the entire country’s domestic energy needs on hydropower alone.

Petroleum

We’ve previously covered the case of Norway’s petroleum management system in our previous article, which you can read in full here:

To briefly summarize, Norway made a massive discovery of offshore oil in the latter half of the 20th century, but lacked the in-house expertise to fully develop it. Thanks in part to the expert advice of an Iraqi immigrant and petroleum geologist named Farouk Al-Kasim (now a knight of the order of St. Olav), and building on the established tradition of Norway’s own experience with hydropower resource management, Norway worked out a novel system for attracting and rewarding foreign investment without selling out the Natural Dividend.

The key insight was that windfall monopoly rights were not a necessary inducement for investment. Instead a pragmatic and flexible policy was worked out where the state covered up-front risk, and at the same time employed careful regulations to not only limit environment damage, but also to ensure technology transfer, competition, and innovation. There’s a lot more detail than I have room to go into here; for a full treatment, I recommend reading the above article, as well as Moses & Brigham’s book.

Norway’s system stands in stark contrast to the two most common models for natural resource management—the “capitalist” approach of letting private companies do whatever they want to and run off with the Natural Dividend, and the “socialist” approach of nationalizing everything with no regard for incentives, causing competence to flee and investment to dry up, when they’re not setting the ocean on fire.

Recommendations

Moses and Brigham fall short of making super strict policy templates, preferring to instead provide an outline of various approaches. Their only hard prescription can be summarized thus:

The correct policy is whatever incentivizes efficient and ecologically sustainable development of the people’s resources, while also returning the Natural Dividend to the community.

Nevertheless, there are several common patterns that emerge from the Norwegian model:

• Resource rent (severance) taxes

• Ground rent leases

• LVT-like holding taxes on resource sites

• Technology transfer agreements with foreign companies

• Direct concessions, such as requiring private companies to hire and train from the local population, or distributing some share of the produced resource to locals at free/discounted rates.

The main question is whether Norway’s success can be reliably replicated. A few things suggest it isn’t a fluke:

A century-long tradition with multiple successes
Norway has been doing this for a long time, first in hydropower, then in petroleum. In recent times similar policies have even been rolled out in response to the enclosure of Norwegian fjords for salmon fishery sites. This suggests Norway’s experience wasn’t just a lucky happenstance, but the result of a deliberate and principled program.

Nevertheless, whenever I bring this up, I always get at least one comment to the effect that “sure, Norway can pull it off, but that’s only because they’re special, so we can’t learn anything from them.”

Northern European Exceptionalism vs. Dutch Disease
If all it takes to avoid the resource curse is to be a nation full of tall, pale, blue-eyed, protestant northern Europeans with high social trust and a historical connection to the Hanseatic league, how does that explain what happened to The Netherlands when their Oil & Gas windfall famously backfired on their whole economy so hard we named the phenomenon after them? It seems like specific policy choices are a much better way to explain these different outcomes than vague generalizations about genetics and culture.

American experiments
Two American states, Alaska and Texas, famously secure a notable chunk of the Natural Dividend from their Oil & Gas sectors on behalf of their people. Alaska distributes theirs as a direct dividend to all citizens equally, and Texas somewhat less equally (for instance, as a way to buy-down the property taxes of landowners). But these aren’t the only two states that employ natural resource wealth funds, there are many others as well. To be fair, these programs capture a far smaller portion of the Natural Dividend than the Norwegian system, and are often blunter instruments which tax gross revenue, as opposed to the carefully tailored, risk-neutral Norwegian instruments. Nevertheless, they establish a strong precedent sufficient to refute a simple dismissal of “we can’t do that here.” Of all the American severance taxes, Alaska’s is the closest to the Norwegian model, and there’s no reason that the other systems couldn’t move in a similar direction with sufficient political will. The chief thing that’s lacking is a coherent theory of what we’re even trying to do with our natural resources in the first place, a gap that Moses and Brigham have now filled.

Going Further

All that said, I do have one critique of the book, and it’s that the most detailed examples of successful implementations are drawn almost exclusively from Norway. This is understandable given the researchers’ background—I’d rather they stick to what they know best rather than go out on an unfamiliar limb—but it does invite the above critique of how well we should expect this all to generalize.

Nevertheless, more and more countries are turning to the Norwegian model, and I’d like to know more about other countries that have supposedly done similar things. For instance, the African nation of Botswana2 is often singled out for having outperformed its neighbors, thanks in part to a large severance tax deal on the diamond mining industry and a public-private partnership with DeBeers. I would have loved to see a detailed analysis of these non-Norwegian resource management regimes, and what lessons we can learn from them.

All in all, I found the book to be inspiring, rigorous, and eminently practical. Like all great wizards, Moses and Brigham understand the necessity of calling a great power by its True Name. Doing so causes what was previously mysterious and invisible to take clear shape, and gives us the understanding to contend with it. Mike Bird did us the same favor with his book, The Land Trap, and with The Natural Dividend, Moses and Brigham rightly earn their place on the shelf alongside it—and dare I say, even Progress and Poverty itself.

A quick note before we dig in: If you missed our LVT Landscape Live, the full video and transcript are up now.

This time: New York quietly authorizes a land value tax that could help fund the Interborough Express, the “abolish the property tax” movement keeps gathering steam, Spokane shows what the better alternative looks like in dollars and cents, we take an honest look at a couple of setbacks, and there’s an impressive stack of new writing to get through.

New York: A Land Value Tax to Fund the Interborough Express

The biggest land value tax news since the last update comes out of Albany… and it’s easy to miss, because it’s tucked inside a state budget. In the FY2027 budget Governor Kathy Hochul signed, New York renewed Section 119-r of the General Municipal Law, a transit value-capture provision that had lapsed in April.

Reed Schwartz and Alex Armlovich of the Niskanen Center laid out what that could mean: potentially billions of dollars in land value to help fund New York’s transit expansion, starting with the Interborough Express, the proposed Brooklyn-to-Queens line that would be the city’s first new end-to-end rapid transit in nearly a century.

This is enabling legislation, not implementation. Section 119-r does not implement land value taxes, but it does give New York City the authority to set up a value-capture district along a new transit corridor and recover some of the land value the transit itself creates, either through a special assessment or a true land value tax (the statute names both). To actually stand one up, the City Council would still have to authorize it and the mayor would have to sign off.

We think the politics here are favorable. From the city level, the mayor, back in 2022 when this provision was about as low-salience as policy gets, was then-Assemblymember Zohran Mamdani and one of the only people talking about it, making 119-r part of his “Fix the MTA” package and introducing a bill to renew it and strip out its sunset. Now he’s mayor. From the state level, Governor Hochul put the renewal of the authority in her budget and is actively pushing the IBX forward.

Applying the land value uplift multipliers from Arpit Gupta’s study of the Second Avenue Subway, Reed and Alex estimate the IBX could generate somewhere between $1.5 and $3.5 billion in capturable land value.

The Property-Tax Revolt

The biggest story in local tax policy right now is the movement to abolish the property tax altogether. For more than a year, Governor Ron DeSantis has pushed to wipe out homestead property taxes entirely. I wrote about this early, arguing that DeSantis is half right: the tax on buildings deserves to go, but the tax on land does not. DeSantis called a last-minute special session at the start of June to force the issue since the regular session did not deliver.

The proposal drew alarm from many directions. Fiscal analysts and local governments warned about the hole it would blow in local budgets, and even House Republicans balked at the governor’s full plan, paring it back so that school levies are spared. By the legislature’s own fiscal analysis, the measure would cut local revenue by an estimated $4.6 billion in its first year and $8.4 billion in its second

On June 2, lawmakers approved HJR 1, sending a “Save Our Homes” constitutional amendment to the November 2026 ballot, where it will need 60% approval. It is far short of abolition: a homestead-exemption expansion that raises the exempt amount to $250,000 in 2028, with school taxes still owed. But, DeSantis wants to pitch this as a first step toward eliminating homestead property taxes for good. An increased homestead exemption, on its own, isn’t the end of the world; my guess is the movement largely stops here for now–and I hope as much.

On WFLA’s Ryan Gorman Show, Jeff Brandes of the Florida Policy Project (and former State Senator), recently walked through whether the amendment delivers real relief; in it, he says the state should consider land value taxes.

The anti-property tax movement is the same one that Ohio State Senator Bill Blessing (R) is facing. He spoke very directly about it at our live event: “I’ve argued it would be like a meteor hitting Ohio,” he said, “an extinction-level event for the state.” Scrapping the property tax simply shifts the cost of government onto other taxes. Replacing Ohio’s roughly $24 billion in annual property tax revenue, Blessing noted, would mean “we’d have to roughly double the sales tax, more than double the income tax, and look under every couch cushion.”

For Blessing, the land value tax is “the most efficient tax there is,” and yet a constitutional prohibition would have Ohio “leaving our best player on the bench.”

The good news is that the counter-argument is breaking into mainstream venues. In Forbes, Jennifer Castenson made the case for why we need — and should want — higher property taxes. And in Commonplace, Michael Lind laid out the intellectual version of the same point, calling the land value tax “the least bad tax”.

Running the Numbers in Spokane

We have been working in Washington for the past year pushing land value taxes. This month we published a report modeling exactly what Spokane’s proposed property tax shift would do, parcel by parcel. The Spokesman-Review covered it, and the headline finding is the one that matters politically: most Spokane homeowners would pay less.

This is a city-and-state push with serious players behind it. Spokane Councilwoman Kitty Klitzke, a longtime infill advocate, frames it as the missing tool: “A property tax that exempts buildings and shifts the burden onto land would give us a new and powerful tool to fill in our gaps while keeping Spokane affordable. We’ve done all we can to incentivize infill development with the tools we currently have.”

At the state level, Rep. Natasha Hill (D-Spokane) put it this way: “This is another tool we have to update our tax code in order to incentivize development and disincentivize prospecting, or holding undeveloped or underdeveloped land for tax write-offs… We can and must change the system to remove burdens for development and increase land value, which benefits all property owners.”

We’re not the only ones making the case in Washington. Our partners at Sightline Institute, covering our report, argued this month that yes, a land value tax is possible in Washington State, even within the state’s constitutional constraints. The Spokane report also got picked up by Streetsblog’s Talking Headways podcast. And the report itself came out of our new LVT-shift modeling tool, which we wrote up on the Substack: it models a city’s shift, parcel by parcel, with essentially one command.

Headwinds: Colorado Stalls, Duggan Bows Out

In hyping land value taxes, I may sometimes give the impression that there are no headwinds. There certainly are. Property tax abolition being one of them, and I want to cover two others.

Colorado is the more instructive one. A bill to let local governments split their rates was postponed indefinitely by a House committee on an 8-3 vote after hours of testimony, including from us.

Having been at the testimony, we learned a lesson: you must do the homework. The right stakeholders weren’t brought in ahead of time. Small businesses and industry groups showed up with common misconceptions of the impact of the land value tax shift, and the moment they saw the word “tax” they reached for the reflexive “they’re trying to raise your taxes” scare tactic. That’s an avoidable own-goal.

There was genuine opposition from the assessors, who would have to implement the land value tax, with many Colorado specific concerns due to local complexities, such as those imposed by Colorado’s TABOR provisions. We have a lot of sympathy for assessors, so administrative concerns make sense, and there are typically ways legislation can make things easier to engage, so working with the administrative folks is important.

And then there was the golf course association, who opposed the bill because their golf courses would be negatively impacted. Cue the world’s smallest violin. Regardless, the initiative this year failed, but this does not minimize the possibility of a LVT in coming years, it will just require some more stakeholder wrangling.

The next headwind for LVT comes from Michigan. Former Detroit Mayor Mike Duggan ended his independent campaign for governor on May 21, citing the difficulty of building national fundraising for an independent bid. As we covered in Landscape 6, Duggan had vowed to renew his land value tax push at the state level if elected. His exit takes the most prominent statewide LVT champion off the 2026 Michigan board. But, we can hope that someone else will take his mantle.

Assessments in the Spotlight

Because assessment quality is the soft underbelly of any land tax, it’s worth watching the cities where that fight is playing out in public.

In Madison, City Assessor Michelle Drea explained the recent jump in property values to the Cap Times — and, predictably, drew a sharp letter to the editor arguing the assessments are “designed to build at any cost.” Ben Noffke also walked through the new numbers on his Substack which is worth a read for the fuller picture.

Maryland: A Report, a Movement, and a Rule Change

Last August, Lars and I published a report at the Center for Land Economics showing that the state was systematically undervaluing vacant land in Baltimore by nearly half a billion dollars. Vacant lots zoned for rowhouse development were selling for more than eight times their assessed value.

Credit for making it stick goes to the grassroots movement behind it. Local advocates took the case through the local power players of electeds, and SDAT responded fast, launching a new initiative to reassess Baltimore’s vacant land and give it the same scrutiny as built-out property. The payoff is now showing up where it counts: this year’s reassessment in the affected zone added more than $100 million in new value to the tax roll.

SDAT also quietly rewrote its own procedures, an under-the-radar move to make this more durable. Its new residential land-valuation procedure, issued May 1st, bakes the fix into standard statewide practice. A few things worth flagging:

• It reaffirms that assessors must separate every improved parcel into land and improvement components, and review land values at the start of each reassessment cycle.

• It lets assessors treat a teardown sale — where a building is bought specifically to be demolished — as a vacant-land sale for comparison purposes.

• Where vacant-land sales are scarce, it directs assessors to use the allocation approach — comparing assessed land value to total value — to flag lots whose land is being undervalued.

The Baltimore Thrive group in Maryland keeps running, too. In an April op-ed, “Taxes a barrier to transit-oriented development,” Baltimore Thrive’s coordinators, David Bjorndalen and Vanessa Beck, argued that taxing buildings penalizes the dense, walkable development we say we want around transit stations… and that shifting the burden onto land would clear the way.

The state is studying the possibility for just that. This year’s transit legislation (SB 282, pp. 35–36) directs the Maryland Department of Planning to study split-rate taxes around transit, backed by $150k for the study. The study has to estimate what it would cost SDAT to implement a split-rate subclass just in transit station areas, and review property-tax assessment-appeal rates in the Pennsylvania municipalities that have tried split-rate taxation; examine why Pittsburgh repealed its split-rate tax in 2001, the role deferred reassessments played, and whether Maryland’s triennial reassessment cycle would avoid the same fate; and pin down the statutory changes needed to authorize a pilot, plus a ranked list of the station areas where it should start.

On the Ballot

Campaign season keeps surfacing candidates who get it.

Out west, former Seattle council candidate Ron Davis is running for the Washington state house on an urbanist, tax-reform platform worth keeping an eye on. I have worked personally with Ron; he both aspires for big urbanist policy changes while also having the deep understanding of how to implement those aspirations. One of those policies he is eager to take up: land value taxes.

If you’re in Philadelphia, 5th Square’s 2026 Election Center is a solid guide to where local candidates stand. Every candidate running for state representative supported enabling Philadelphia–the only city in Pennsylvania without authority to tax land–to implement split-rate taxes.

In Illinois, Drake Warren — who spoke at our December live event — is profiled as the presumptive incoming Cook County Commissioner for District 10. He’s expected to push a vacancy-or-underutilization approach given Illinois’s constitutional constraints.

At the federal level, one congressional candidate with an outside chance in a crowded California primary made news by running on land value tax. Josh Hamilton’s “New American Dream” plan is built around a federal land value tax, a negative income tax, and a citizen’s dividend.

Closer to the ground, Baltimore County’s executive candidates clashed over housing and growth, with the usual menu of senior property-tax carve-outs on offer. Nick Stewart, one candidate, argued for a more holistic tax change: shift taxes from property taxes to land value taxes. Primaries are held next week.

Around the World

The international momentum continues. In Canada, a SaltWire op-ed made the case for a land value tax in Nova Scotia. And in Wales, the Green Party went all-in: their 2026 Senedd manifesto proposes scrapping council tax entirely and replacing it with a land value tax, shifting the liability from occupiers to owners, swapping business rates for a land-based system, and adding a vacant land tax for good measure. The Greens have a real track record here. In Germany, it was the Green Party that pushed Baden-Württemberg to actually implement one. When we interviewed Dr. Dirk Löhr about that model, it was still facing a constitutional challenge — and the results are now in: in May, Germany’s Federal Fiscal Court upheld Baden-Württemberg’s pure land-value tax as constitutional, throwing out the lawsuits against it.

Updates from the Center for Land Economics

Chicago: “Tax & the City”

In early May, Progress and Poverty Institute put together an event, “Tax & the City,” which included Greg on the panel with Josie Faas, Drake Warren, and Daryl Fairweather. It capped a busy Chicago swing that also included a land value tax panel at the Urban Affairs Association conference. The full video is up here.

Strong Towns

We were also out in force at the Strong Towns National Gathering, where Lars joined Josh Vincent, Sharon Suarez, and Joe Minicozzi for a land value tax panel. And two more Lars appearances worth your time: he was just on the Strong Towns podcast this week, digging into the housing crisis beneath the housing crisis, and he recently sat for a StrongTowns Q&A as well.

Lars on the UCLA Housing Voice Podcast

Lars also joined Shane Phillips on the UCLA Lewis Center’s Housing Voice podcast, one of the best ongoing conversations in housing economics in Episode 111, “Land Value Tax Would Fix This.”

Worth Your Calendar: A June 26 Talk on Philly’s Wage Tax and LVT

One event to flag, courtesy of our friends at the Progress and Poverty Institute, who are co-hosting it: on June 26, a recent Harvard PhD will present a job-market paper with an eye-popping finding — that replacing Philadelphia’s wage tax with a non-distortionary land value tax would pull 26,000 jobs from the suburbs into the city, with gains that triple once you account for productivity agglomeration. It’s a hybrid (virtual and in-person) talk; the virtual option is probably the easy one for most of you. Register here.

More LVT Coverage

Beyond the items above, land value tax keeps surfacing in more places than it would have even a year ago:

• Redfin Chief Economist Daryl Fairweather put out a terrific ~20-minute explainer on the land value tax.

• Liberal Currents argues yes, we can just tax the rich which lands, naturally, on land as the thing you can’t move offshore.

• A companion piece from Liberal Currents, “Rent: a new framework,” reframes how we ought to think about rent in the first place.

• On the Neon Liberalism podcast (#77), historian Christopher England asks whether a land value tax would fix it, a great primer if you want the historical sweep.

• The Urbanist runs a clean explainer making the case for shifting to a land value tax by a local resident: Aaron Schechter.

• Common Edge makes the design argument in “Back to Earth: The Case for Lowering Speculative Land Values.”

• CEPR explains why LVT and progressive property taxes are two great taxes that go great together.

• A fun bit of history from Cincinnati Magazine on when Cincinnatians led a movement to abolish all taxes except the one on property.

• In Portland, Willamette Week readers weighed in on taxing vacant properties and more.

That’s it for Landscape 9. If you’re seeing movement on LVT in your area, reach out: greg@landeconomics.org.

Greg Miller is the Co-Founder and Executive Director of the Center for Land Economics.

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In its output, you can get parcel-level impacts comparing a land value tax to traditional property taxes with visualizations such as this:

The process to producing such a visual requires a lot of steps. You have to find and pull the assessment data, sometimes from several sources, and stitch it all together. You have to interpret that data, including classifying each property by type. Then you must apply the millage rates and rebuild the existing property tax system in full, with all of its assessment ratios, circuit breakers, and exemptions (both full and partial). Only then can you model a new rate under a proposed split-rate policy, and finally analyze and visualize who is affected: which property categories gain, which lose, which neighborhoods, and how the impact falls across income levels. It is a long process.

Now the whole process runs from a single command: /lvt-city <city>. And that is just the start. I’ve updated the LVTShift repo with a handful of skills for modeling LVT:

• /legality-analyzer <place>: maps the legal pathway to LVT in a given city or state, grounded in the actual constitution, statutes, and case law, and lays out which reform vehicles (split-rate, building exemption, classification, and so on) are open.

• /lvt-city <city>: runs the whole pipeline end to end. It finds the data, rebuilds the current tax, models your proposed policy, and produces the parcel-level results and graphics.

• /explain-model <city>: writes a plain-language methodology audit of an existing model, covering what data it used, which levies it did and did not include, how exemptions were applied, and where its limits are.

• /refine-model <city>: re-runs an existing model with different parameters, like a new split ratio, a switch to a building exemption, a different exemption treatment, or a wider set of levies.

This is the first step toward a set of agentic tools at the Center for Land Economics. Lars and I have been working to make our capabilities and knowledge easier to reach for LVT advocates everywhere, and not just with this launch. It is how we think about our work as a whole, so you can expect us to keep lowering the barrier to doing real LVT advocacy in local communities.

What is LVTShift?

Last year I launched LVTShift, an open-source toolkit for modeling land value taxes in local jurisdictions. The codebase was a little rough, but the point of releasing it, along with the article that went with it, was to show my work: the thinking and the code behind modeling a property tax shift in a specific place.

That original article is still worth reading, because the agents in the new LVTShift follow the same steps. The coding agent will also output a python notebook that still looks quite similar to the python notebooks I was creating a year ago. This is a subtle, but important, point to those less-technical: the AI is not doing something mysterious. It is writing the software that does the modeling, and the results are deterministic, so they do not change from one run to the next.

Since that article, I continued using the repo to model new cities, and my process changed a little each time as the coding agents got better. For the past few months I have been almost exclusively using agentic coding tools for modeling land value tax shifts.

As such, I have subscribed to the belief that markdown files are code. This newer version of LVTShift is really just a few markdown files plus some utility functions. Or, in other words, enjoy my prompts…

They have been very useful in my own work, so I expect it will help others too.

How to get started

The repo is built to be driven by a coding agent in plain English, so most of the setup is something you can hand to the agent itself. This also means you do not need to be technical to get started; you just need a Claude Code, Codex, or similar subscription. LVTShift is built around Claude Code, which is where the slash commands like /lvt-city live, but Codex will work too.

Once you are in the coding agent, clone the repo from github.com/gregmiller00/LVTShift and let the agent install its Python dependencies for you. If you have never touched Python, that is fine; “set this repo up and install the requirements” with a link to the repo is a perfectly good thing to say to the agent.

Then, get a free Census API key. This is the one step that is truly yours to do. Sign up at api.census.gov, copy the key into a .env file, and you are set. The model uses it to pull neighborhood income and demographic data. Again, the coding agent can take you through this.

Then, start with the commands. You can type /lvt-city <your city>, answer the five questions it asks (which levy, which reform, whether to keep existing exemptions, your county and state, and an official revenue figure to check against), and wait.

What will LVTShift produce?

Last week I released a report, “Tax Land, Not Homes: A Revenue-Neutral Path to Unlock Spokane’s Underused Land,” which modeled a partial land value tax in Spokane through a universal building exemption.

Why a universal building exemption? Because Washington’s constitution will not let you tax land and buildings as two separate classes, but it does give the state broad authority to exempt property from taxation. This is where I think a lot of analysis should start: find the lowest-hanging fruit, politically, for shifting the tax burden onto land. The /legality-analyzer skill is built to help with that. Typing /legality-analyzer Spokane surfaces the building-exemption pathway and the legal reasoning behind it.

From there you run the model with /lvt-city Spokane. You can add detail up front, like /lvt-city Spokane with a 50% building exemption, or just let the agent ask you as it goes.

Within about an hour you will have a set of outputs. The first is a CSV listing every parcel, its current tax (as rebuilt by the model) and its new tax under the proposed policy. Alongside that you will get a series of graphics. The graphics will be styled differently, but they will contain similar information to the following graphics in the Spokane report.

Impact by property category

The first shows the net change by property category, scaled to the median parcel so a handful of outliers cannot distort the picture. In Spokane, the building exemption moves the burden onto the land that is doing the least work. Vacant lots see a median increase of about 118% and surface parking about 112%, and together they account for most of the shifted revenue. Every residential category pays less, with large multifamily buildings of five or more units seeing the biggest median cut at roughly 14%.

The modeling will show: net change (the total dollar amount +/- of that property category), the median dollar amount, the median percentage change, and the number of parcels.

How widely the change is felt

The next graphic asks not how big the typical change is, but how many parcels move by a lot. If the median single family house were to increase, but no single family house moves more than +/- 10%, then really most are seeing no significant change to their property tax bill.

Nearly every vacant land and parking parcel, 99% and 96% respectively, sees an increase of more than 10%. The ones that do not are merely assessor categorization errors, or are parking garages. The large decreases, on the other hand, are concentrated in multifamily housing: 65% of large multifamily and 47% of small multifamily parcels drop by more than 10%.

Who benefits, by income

It is also important to know whether the policy is progressive. To do this, we merge parcel data to census geographies and data. You will need a Census API key, but that takes less than one minute to get, and your coding agent should take you through that.

Once the model joins each parcel to census block group income data, we can also see how the relief is distributed. Among residential, non-vacant parcels, the median tax cut is largest in the lowest-income neighborhoods, about 5% in the bottom quintile, and smallest in the highest-income ones, about 1%. In other words, the cut is progressive. This graphic restricts to non-vacant, residential parcels because that is typically what people care about when they ask: is this policy going to evict low-income homeowners?

Who benefits, by neighborhood

A similar pattern holds when you look at neighborhood demographics. Median residential tax reductions generally grow as a neighborhood’s minority population share rises, from about 3% in the least diverse quintile to between 4 and 4.5% in the most diverse.

“The results for my city don’t look politically good”

That happens, and it is worth saying plainly what “not good” usually looks like: single-family homeowners seeing a big increase, or low-income neighborhoods taking the hardest hit. If that is what your first model shows, here are a few things to keep in mind.

First, you can try a different policy. A 2:1 or 4:1 split instead of a full shift. If you are doing an exemption approach, a flat exemption on the first $100,000 of building value can change the picture a lot.

Second, you can model tax districts, rather than doing a city-wide shift. Often the goal of a land value tax shift is to bring a downtown back to life, and downtowns are exactly where land values are highest, so that is where the shift does the most work. Drawing the policy around the downtown corridor concentrates the benefit where it matters and keeps it off the parcels you are worried about.

Third, even “only okay” results are better than they look on the page. These models cover the tax bills of people who own land. In a lot of cities that leaves out the 40% of residents who are renters and own no land at all. Renters gain from this policy overall, especially as more housing brings down rents.

In addition, perhaps more importantly, this modeling is the one-time static impact of tax bills. The purpose of a land value tax shift is not for tax redistribution. It is meant to long-run encourage development while ensuring a balanced local budget.

What about Agriculture?

I usually leave agriculture out of the analysis. On farmland, much of the value sits in the land itself, since the “improvements” are often things done directly to the soil, so assessments tend to show high land values. That means an LVT shift tends to raise the tax burden on ag land, which makes a proposal harder to pass. Urban land is where values are highest and where the shift goes furthest anyway, so that is where I prefer to focus. It is a preference, though, not a hard rule.

How do I know if my city’s land values are good?

Good question, and one we are building more material to answer. In the meantime, I recommend reading Lars’ article on land valuation to understand the theory on what good values would look like. Until there is a full set of tests, here is what to look for:

First, has your city completed a revaluation recently? If it’s been a while then the valuations may not be reliable.

Second, look at the land values. Do they make intuitive sense? Do the areas you know to be the most valuable have higher land values? Do the poorer areas have lower land values?

Third, are land values locally flat, or is there tons of side-by-side variation? You don’t expect them to be perfectly smooth, but if they’re very noisy, that’s surprising.

Fourth, do land values spike where we naturally expect them to—along transit corridors, along commercial corridors, in the city center, in wealthy neighborhoods, along premium waterfront, along golf courses, etc?

What do I do with this modeling?

The modeling should serve as the data behind the work you do, but data alone does not change minds. You will need to pair the data with story-telling, as well as coalition building and elite persuasion. We have written a playbook on steps to advocating for land value taxes in your local area, and it should serve as a good guiding point.

The repo is a starting point

All of this is a starting point. Have a question? Want to model something different, or see a new kind of graphic? Ask your coding agent.

And if you have ideas for improving the skills, find yourself correcting the agent over and over, or want a skill that does not exist yet, let me know or open a PR.

Here is the video in full:

The transcript below is lightly edited for readability, with slides from the presentation included throughout.

Video Transcript

GREG: Thank you all for joining us today. My name is Greg Miller. I’m the Director of the Center for Land Economics, which I co-founded with Lars Doucet, who’s also on this call. We’re here with Stephen Hoskins, who’s going to get us started. We appreciate you all joining.

STEVE: Good afternoon and good evening, everybody — and good morning to a former colleague of mine, Professor Sock-Yong Phang, who I think is calling in from Singapore. I’m Steve Hoskins from the Progress and Poverty Institute, where I work as the Director for Community Research and Engagement.

I’ll give a quick intro to today’s event and some admin, and then hand it back. You heard plenty from Greg and me at the previous LVT Landscape LIVE, so hopefully I won’t be doing too much talking tonight.

A few housekeeping notes. The meeting is being recorded and will be posted online early next week. Please stay muted for the event unless we open up the general Q&A at the end. You can put questions in the chat as we go, and I’ll collect them and put them to our guests. We’ll follow up with an email next week with the video link and any materials from this webinar.

Now for a few quick updates from the Progress and Poverty Institute side. Greg will show you a lot of the materials CLE has been working on at the end of the event. On our side, we’ve been reshaping our grant program this year to focus more heavily on LVT. As one example, Nathan Seegert is going to extend his implicit-land-tax modeling to do LVT-shift modeling on roughly two-thirds of the counties in the US. Russell Richie joined us a couple of months ago as Director of Strategy and Impact, and he’s been driving our networking and grant applications. We also have a big conference program rolling out for the rest of the year — the National Tax Association, IAAO, and YIMBYtown in particular — so we hope to meet many of you in person.

Where things stand: the national LVT landscape

STEVE: To pick up where we left off last time, the main argument we wanted to drive home was that land value return is needed, it’s pragmatic, and it’s achievable.

It’s needed because America has a record number of rent-burdened households, a severe shortage of housing where it’s needed most, and rising wealth inequality, much of it driven by land.

It’s pragmatic because we’re seeing very high levels of interest in LVT right now. That’s a combination of those problems and of local communities bracing for the retreat of federal support and looking for new local revenue to fund municipal and state services.

And it’s achievable, which is what we’re really highlighting today. We’re seeing a lot of enabling legislation on the table, growing interest in implementation, and some real wins.

This map highlights the states with active LVT legislation, recent legislation, or movement we expect soon. The green states are where there have been wins, and we have guests from several of them tonight.

A few specifics. In Illinois, Drake Warren — who spoke at our previous event — won his primary and is the presumptive Cook County Commissioner. He spoke at an event we hosted in Chicago last month, and he’s expected to push for a vacancy or underutilization tax in Cook County, which is mostly a function of the constitutional constraints there.

In Virginia, you’ll hear from Lyle Solla-Yates in a moment about the legislative win. We’ve also funded Joh Gehlbach and Angela Tiangco of YIMBY Action to study LVT shifts in Virginia and work on policy design, and PPI and CLE are about to start regular monthly check-ins with on-the-ground advocates there.

In Maine, Greg, Lars, and I have been serving as analysts for the state’s task force. I’d frame a lot of that work as defending the integrity of the property tax system from the kind of tinkering that erodes its efficiency.

In Maryland, $150,000 has been allocated to study land value capture within a half-mile of transit.

And in Washington State, where I live, there’s real interest from Spokane and from Seattle’s mayor. We’ve signed a contract supported by the Sightline Institute to do LVT message testing — finding ways to frame the policy so it’s understandable and appealing to local voters.

I won’t say more about New York, Virginia, Ohio, and Kentucky, because that’s where our guests are from. So I’ll hand it over to Greg.

Meet the panel

GREG: Thanks, Steve. That’s helpful context. On the Progress and Poverty Substack, you can find the December event that lays out why we think land value tax is having a moment. We covered a lot last time, so today we’re really excited about this panel — a strong group you’ll hear from over the next 40 minutes.

We’ll start with Senator Blessing, who will talk about his work pushing LVT in Ohio. In typical fashion, he’s calling in from just outside a colleague’s fundraiser. Then we’ll hear from two people who have helped pass legislation on the ground, and finally from Reed, who is doing innovative work on land value capture around transit corridors in New York City. If you follow this movement, you may have seen his report last week on the Interborough Express corridor.

I’ll pass it over to Senator Blessing.

Ohio: fighting property-tax abolition with a better idea

SEN. BLESSING: Thanks. As Greg said, I’m actually at a former colleague’s fundraiser — the former Senate President, now Speaker of the House, Matt Huffman — and I’m a couple of blocks down from it.

I’m glad we’re talking about the property tax revolt. As you may know, in Ohio we have a potential ballot issue. They haven’t gotten the signatures yet, but they have until July to put a total property-tax-abolition amendment on the ballot. This isn’t like Prop 13 in California or other measures that freeze property taxes at purchase. This is a full-blown “property taxes won’t exist anymore in Ohio” proposal, and it’s hard to put into words just how catastrophically bad an idea it is.

I’ve had a lot of success going around and telling people the damage it would do. For starters, Ohio’s property tax funds local government — townships, cities, villages, counties, and above all school districts — to the tune of $24 billion every fiscal year. To replace that, we’d have to roughly double the sales tax, more than double the income tax, and look under every couch cushion: the commercial activities tax, the financial institution tax, higher sin taxes, you name it. And we’d still struggle to fill the hole. But, as they say on TV, wait — there’s more.

What gets lost is that these folks assume that’s the end of it. I’ve warned them repeatedly that if you do this, you’ll get exactly what Winston Churchill warned about, what Henry George warned about, what many economists have warned about: land hoarding. I joke with my wife that if this passed, I’d immediately buy 30 or 40 acres in my home county, because I could sit on it tax-free forever. That makes land even scarcer, drives up real estate prices, and slows development to a crawl as everyone has to pay these land-hoarding middlemen.

For all the seniors who think they’ll make out well, consider that property taxes can actually make housing more affordable precisely because they’re such an efficient funding mechanism. Take them away and insurance costs go through the roof, as they have in Florida — and Florida hasn’t even abolished property taxes; DeSantis has only proposed cutting them back.

The net effect is less housing, which Ohio can’t afford — we’re about a million units short. A young person trying to start a family would be doubly, triply, quadruply squeezed: maybe you’re not paying property tax, but your mortgage, insurance, income taxes, and sales taxes all go through the roof, and you get nickel-and-dimed everywhere else. I’ve argued it would be like a meteor hitting Ohio — an extinction-level event for the state.

So when people ask what we’d put on the ballot instead, I say: don’t threaten me with a good time. I’d put up SJR 7, my constitutional amendment to allow land value taxes in Ohio. I listen to some of the folks speaking after me who can do this reform today, and I think, my God — you’re already running the race while we in Ohio are still in bed because of our constitutional prohibition.

A lot of my colleagues are interested. I tell them, look, I’m a Republican; I get that this reads as a progressive idea, though it’s classical progressivism. Don’t get it tangled up in social issues. It simply says you don’t pay tax on improvements — and when you don’t tax improvements, you get more of them. It’s the most efficient tax there is, and we’re leaving our best player on the bench because of a constitutional prohibition. That argument lands well; they understand it.

The hang-up has been colleagues who want to pair it with property-tax and income-tax cuts and send everything to the ballot. My response is that if you simply let local governments adopt this by majority vote — while they still have to send property and income taxes to the ballot — they’ll organically shift toward the land value tax and leave the other taxes alone. Why bother with a ballot fight otherwise? In theory, the net effect is more prosperity, because you’re moving from punitive taxes to an efficient one.

This has actually worked. Republican members in both the Senate and House have come forward wanting to do companion legislation. The challenge is that after our big property-tax fight last December, there’s some fatigue with real estate taxes generally. But I’m very hopeful, and I think a lot can be invested in Ohio here.

If I’m ultimately unsuccessful — the polling on land value taxes can get a little weird — I still think reform can work. Ohio is one of those states where, if push came to shove, we could gather signatures and take this to the ballot. I don’t think you’d see the same opposition you’d get on other issues. Based on my research, progressives come out for it and conservatives come out for it. A local woman once complained to me that she’d bought a house, fixed it up, and watched her property taxes jump at the next valuation. I told her: guess what wouldn’t happen under a land value tax? Exactly that. It would have stayed flat — or only gone up if the locals voted for it.

So even though Ohio has to clear the constitutional hurdle, there’s a lot of good energy here, across the business community, the conservative world, and the progressive world. It hasn’t gotten much traction lately, but that’s about logistics and other pressing issues in the General Assembly, not the idea itself. That’s my TED Talk — I’m at about ten minutes, so I’ll yield to the other speakers.

GREG: You landed on ten minutes almost exactly. For those who haven’t seen them, go online and watch Senator Blessing’s many interviews on this issue. There’s an “abolish the property tax” movement out there — Florida just held a three-day emergency session on it this week. Reframing this as abolishing the tax on buildings to encourage development is powerful: we’re about to hear from a Republican state where Republicans passed legislation, so this is genuinely bipartisan. I love Senator Blessing’s line about leaving our best player on the bench. Every economist agrees land value tax is the best tax — including Milton Friedman — so why are we benching it?

We’re working with Senator Blessing on LVT modeling for Cincinnati to build more momentum there. Now I’ll hand it to a local advocate who isn’t elected but works directly with electeds, and who helped pass legislation in Kentucky in about six months.

Kentucky: a split-rate win in six months

JACKSON: Hi, everybody. I’m Jackson Arnold, a citizen member of the Abundance Network here in Louisville, Kentucky. The Abundance Network is a national organization of members — elected officials, donors, and citizens like me — who work together to get abundance-related policies off the ground in states and cities across the country.

I joined about May of last year and was immediately connected with another member here in Louisville, Councilman Ben Reno-Weber. From the start, we looked for a project where I could do the heavy lifting on data and policy and he could fight for it politically once I had the evidence. The first thing we settled on was vacant and abandoned properties. I knew about land value tax as a concept, and I knew it was illegal in Kentucky, but I came to the conclusion that one of our biggest policy openings was getting some form of land value tax activated here in Louisville.

So today I’ll talk about how we did it, how I think about land value tax and the abundance movement working together, and some tips for repeating this in your own city or state. For those who don’t know, abundance is a growing national movement about building more — more housing, energy, and transportation — to reach material abundance for everyone. I think an LVT hits most of those goals squarely.

Greg is showing a map of Louisville, which is Jefferson County, Kentucky. For context, Louisville is a combined city-county government, so Louisville and Jefferson County are governed by the same jurisdiction. The councilman I work for is one of 26 on a Metro Council with a Democratic majority and a Republican minority.

Once I had the evidence to show that LVT could be a valuable tool for our vacant-and-abandoned-property problem — like most Midwestern cities, we have a lot of vacant property in our inner city, particularly in historically redlined areas — I did a preliminary legal and data analysis to figure out what implementation might look like and what we’d need to pass it. On the legal side, it’s complicated, but the short version is that constitutionally we can do a split-rate tax but not a full land value tax. So we still have to tax buildings somewhat, and we need the local legislature to enable it.

I brought these facts to Councilman Reno-Weber, who was excited, partly because it would also help with one of his pet issues: downtown parking lots, of which we have plenty. As I refined the analysis, he started talking to other council members. The first he found was Councilman Andrew Owen, who had discovered the policy around the same time I was pitching it, and who was interested for the same reasons we all were. He then connected me with Councilman Anthony Piagentini, the chair of the Republican minority on Metro Council.

For those who don’t know, Kentucky is a red state despite our Democratic governor, with a Republican supermajority in the legislature. If you want something done, you have to get them on board. As luck would have it, the Jefferson County Republicans were already working on a bill to reform how Louisville’s city government works, which meant we could slip a provision right in.

I was pushing for a reform to one of our county property taxes. We have three: a metro property tax for the whole county, a countywide school tax, and our Urban Services District tax. The darker shaded area in the center of this map is the Urban Services District — the historic boundaries of the City of Louisville before the merger, where the city provides services like trash pickup and snow removal that aren’t provided elsewhere, funded by a separate property tax. That district turned out to be exactly the target we needed to get Republicans comfortable, because they’d have been nervous about affecting their own voters.

In general, Councilman Piagentini was very supportive, because a lot of his exurban voters — and his colleagues’ — are tired of sprawl: more suburban development, more traffic, and disruption of the large landholdings they value out in the county. They want more development downtown to take the pressure off, and inner-city Democrats want more development too. So we struck a bipartisan deal — me and three council members — to push this into the state legislature under the Republican-led bill.

That bill was essentially an omnibus, with a lot of other provisions, so Democrats pushed back on the whole thing, but the property-tax piece was popular. Representative Rachel Roarx, one of the Democrats most opposed to the bill overall, made a point of saying on the floor that she appreciated the property-taxation changes, which she thought could benefit Louisville Metro. Despite Democratic opposition, it passed the Senate and the House, got vetoed by the governor over the other provisions, and was almost immediately overridden in both chambers. As of April, Louisville has legal permission to implement a split-rate property tax in its Urban Services District.

That’s more or less the story. We’re now working out exactly how to implement it, because there are real technical and procedural challenges once you actually have the authority. But things look promising, and I expect more news on this front in the next couple of years.

Honestly, getting it done in six months was a momentous achievement, and we were also extremely lucky — we were in the right position politically at both the city and state level. We also have a housing shortage: the mayor wants to build 15,000 units, and we’ve built 7,000 toward that goal, so we have to work hard to beat the shortage. But once that energy fades, we’ll still have a tax system that lets us keep at it over time.

To finish, here are some lessons from this six-month process.

First, if you’re working alone or in a small group rather than a big grassroots movement, find the most reform-minded elected official you can and stick with them as your voice. A local legislature is ideal, because those offices don’t have large staffs, so you can be a resource they can’t otherwise get if you volunteer your time and expertise.

Second, be polite but persistent. These are busy people who will say no a lot or ghost you, but if you don’t take it personally and you keep at it, you’ll eventually find an opening.

Third, connect LVT to the elected official’s own priorities. That’s how you get them to genuinely champion it rather than offer a milquetoast “sounds cool.” Even better, help with their other interests too, so you’re not a single-issue, LVT-obsessed advocate — you care about reform broadly, and they’ll be more likely to care about the reforms you care about.

Finally, be flexible on implementation. We just need wins on the board, and any win counts, however small. The area now legalized for LVT is a tiny share of the state, but it’s one of the most impactful, because it’s where most of the land value is. Give where you have to, but keep the core of the policy alive. Thank you, everybody — and thank you, Greg, Lars, and Steve Roseman.

GREG: Thank you, Jackson, for leading a successful effort. When he says he got lucky, he found the right political opening — but he didn’t just get lucky; he partnered with the right people and stayed flexible. That’s the takeaway in politics: be normal, be approachable, and be helpful, and you can find the opportunity. The opportunity doesn’t always come, and many people on this call have been working on this for decades, so there’s real work to do — but it’s not just luck.

Jackson also mentioned that implementation matters. Lyle knows this well, working for the city government in Charlottesville and helping lead Virginia’s enabling legislation, which passed about a month ago. I’ll hand it to Lyle to talk about the experience in Virginia.

Virginia: from years of losing to a signed law

LYLE: Great. My name is Lyle Solla-Yates. I’m a Planning Commissioner in Charlottesville, Virginia, and I teach zoning at the University of Virginia. I spend a lot of time looking at maps and worrying about what they mean and how they could be better. It’s hard to get the rules right and it takes years, but I’ve been at it a long time, which helps. We completely overhauled our zoning with a new comprehensive plan and housing plan, and we spend $10 million a year on affordable housing — more than any locality I know of except Washington, D.C. That’s a big deal.

Charlottesville looks like this on a nice day: the University up front, the West Main area, downtown, the hospital — that big building on the right — and beautiful mountains behind. You’ll notice there aren’t many big buildings, and a lot of green, which is lovely. But I wouldn’t call us rich.

The University of Virginia, my main employer, pulls in about $6 billion a year, so expectations here are high — we compare ourselves to Paris, London, and Tokyo. But the city doesn’t have that kind of money. We have millions, which is good and not nothing, but it’s not enough for the level of services people expect. There’s a big gap between our dreams and our abilities.

So we make do. What I’m best known for is the Charlottesville Plans Tomorrow program — the new comprehensive plan, affordable-housing plan, and new zoning to allow the kinds of affordable housing we’d previously banned. As part of that, we adopted $2 million a year in tax relief — not tax abatement, tax relief — plus $10 million a year in affordable-housing spending. That’s $12 million a year, and the question is where the money comes from.

So far we’ve spent $59 million, which is more than we expected. It means we’re putting off other things we want to do, especially school spending and transit. And we’re raising taxes to pay for it, which people absolutely hate.

The reason our hands are tied is that Virginia is a Dillon Rule state: localities can only do what the legislature explicitly allows. That’s because of the gentleman on the right — I don’t think he meant to hurt Charlottesville specifically, but he did. So if you want to do anything, like a land value tax, you have to go to Richmond and ask. That’s what our friends in Roanoke and Fairfax did.

I got interested in this from Roanoke City Councilor Bill Carter, pictured here, who recently passed away. He was the guiding light behind the restoration of downtown Roanoke, and what he did with his career was incredible. He was a Republican, but he was really a Georgist, and he got the legislation through and got me interested.

This is Mayor Nikuyah Walker of Charlottesville, who ran on equity and fighting displacement. Working with her is how we got the $2 million a year in tax relief done — a big lift that meant cutting popular things. But it’s in place and ready to go.

Our friends in the nonprofit community built an analysis of how a tax shift to land value would actually work in Charlottesville, parcel by parcel. The data is old now, but at the time it was vital: if someone worried about a specific parcel, I could tell them precisely what would happen to it.

One day, Delegate Sally Hudson walked up to me at a giant parking lot and said, “Lyle, you’ve done so much for the city. Is there anything I can do to make things better?” I said, “Land value tax, obviously” — that’s what you say whenever an elected asks. She said, “Sure, I’m an economics professor, I know a bit about that.” Joe McNamara, pictured on the right, is a CPA. An economics professor and an accountant walk into the state legislature — and they get absolutely wrecked. For years, every single time, we lost on a party-line vote. The party in power kept changing, but whoever was in power was against it. It was maddening.

But then an election brings new faces and a new governor, and things change. This is Katrina Callsen, the new delegate — not an economist, but a lawyer; don’t hold that against her. She gave me five minutes. “Lyle, what can I do?” I said I had one idea. She took it forward. It didn’t go well at first, but we regrouped, worked with other localities, and combined four separate bills into one to give everyone a chance. Governor Spanberger signed it. She vetoed a lot of other things, so this was no guarantee, but it went through. We now have the power starting in July. Very exciting.

This raises a lot of questions and opportunities. I met with staff today about how to start. There are plenty of question marks, but I’m hopeful we’ll begin soon.

GREG: Thank you so much, Lyle. He’s been key to translating these ideas into things cities care about, while staying attentive to administrative priorities and implementation. You heard from both Jackson and Lyle that the homework matters — the data analysis, the storytelling, the tax-shift explorer — because that’s the work that does the legislator’s job for them. Most of our electeds don’t have significant staff. As Jackson said, that’s exactly why a city elected is a good target: they don’t have a big staff, they have a hundred priorities, and their number one job every year is balancing a budget they can’t balance. That’s why our work matters.

Now we’ll pivot to something a bit different from passing legislation: capturing value for transit, which many on this call have thought about for decades. Cities invest enormously in themselves — how do we recover some of that value? I’ll pass it to Reed Schwartz, an Associate Fellow at the Institute for Progress, who recently published a report on exactly this.

New York: capturing land value to fund the Interborough Express

REED: Thanks, Greg. I work on infrastructure policy at the Institute for Progress, an innovation policy think tank, and I’m going to talk about a report I wrote for the Niskanen Center with Alex Armlovich, a non-resident senior fellow there. It’s about a newly reauthorized provision in New York State that could enable literally billions of dollars in land value taxes to fund transit.

To set the stage: New York State’s 2027 budget includes big plans for capital expansion. The highest-profile project is the Interborough Express, a line between Brooklyn and Queens — the city’s first end-to-end transit line since roughly the 1930s. But despite the current good feelings between the Mayor of New York and the President, federal transit funding has been precarious. Fortunately, the state budget just signed by Governor Hochul reauthorized Section 119-r of the General Municipal Law, which had expired in April and could provide a substantial new source of transit funding.

In short, 119-r lets cities in New York establish land value tax districts — as well as general property tax districts and tax increment financing with the MTA — to capture some of the value created when the MTA builds new transit. As you can see, it explicitly names land value taxation.

A bit of history. You probably recognize this figure: he fought for land taxation in New York, ran for mayor as an independent, and came in an unlikely second. I’m talking, of course, about Andrew Cuomo, who passed this provision in 2016.

This isn’t the first time value capture has funded projects in New York City. Under Mayor Bloomberg, the Hudson Yards development was financed through tax increment financing — essentially borrowing against the future property tax revenue the project would generate. But because of value exactions added since then, especially inclusionary zoning and prevailing-wage rules, the uplift from simply upzoning the Brooklyn-Queens corridor probably isn’t enough to fund significant new transit. The land value uplift from new transit access, though — connecting properties to firms, people, and other transit lines — could be much larger.

Value capture is, in general, a well-suited tool for transit funding. It places the cost of infrastructure directly on the greatest beneficiaries — the people who live near it and, more importantly, own land near it — rather than on poorly targeted sales taxes or fares. It can create a flywheel: revenue funds more transit, which generates more value, which funds more transit. It also encourages fiscal discipline, because it ties costs to benefits and pushes planners to ask which projects will actually generate a return. And it’s well tested: New York’s original streetcar lines were built partly on private value capture, with developers buying up undeveloped farmland, building lines out to it, and capturing the value they’d created by flipping the land. Hong Kong’s MTR funds itself partly this way too, so it’s well established internationally.

A 2022 study by Arpit Gupta at NYU looked at the Second Avenue Subway extension and found it raised nearby land values by $5.5 billion on a cost of $4.5 billion. That project was famously one of the most expensive in the world on a per-mile basis, and it still generated a huge social return. Some of that was captured through existing property taxes, but about 70% remained in private hands; the city ultimately captured only about 30%.

To estimate the uplift from the Interborough Express, we applied Gupta’s multipliers to New York’s existing property valuations and found a range of roughly $1.5 to $3.5 billion. There are reasons to think that’s an underestimate — Gupta’s multipliers run between about 5.5% and 8% depending on the corridor, there’s greater development potential in Brooklyn and Queens, and the line runs through transit deserts where new access is especially valuable. There are also reasons it could be an overestimate, given how productive Manhattan land already is. To be clear, it’s good that some value stays in private hands, for political-economy reasons — landlords supporting a project is helpful — but it probably doesn’t take a $3 billion transfer to landlords to win support for a transit line. Some of that should go toward paying for the line itself.

The budget that passed last week reauthorized the land value tax, but the City Council still has to authorize it and the mayor still has to sign it. We’re hearing good things from the state and the MTA, and there are strong signs the mayor himself is on board: back in 2022, when this was very low-salience, he gave an interview in Jacobin praising the provision and saying he wanted to expand it. He also introduced a bill to renew it and remove its sunset clause; as it stands, it expires next year if not renewed, although districts that are created won’t expire. You can read the report by searching “Niskanen IBX,” and I’ll drop the link in the chat. We’re optimistic, and Greg will keep you posted.

GREG: Thanks, Reed. Another case where doing the work and understanding implementation really matters, so keep an eye out for updates. I’m excited that we have a mayor who, three years ago, when no one was talking about land value capture, was pushing this obscure provision — as Reed said, one of the only times it had been discussed publicly was by Mayor Mamdani, which is pretty cool. Across this event we’ve run the gamut: a bill passed in a Democratic state, a Republican state senator, and now a democratic-socialist mayor, all moving on these issues. That’s a lot of momentum across the political spectrum.

A new tool: model an LVT shift with one command

GREG: I want to quickly show something the Center for Land Economics is releasing: a new way to model land value tax shifts. As we’ve said, the data and the work always matter — and we’re now in a new era of AI.

Land value tax modeling is usually a many-step process. You have to find the data, search the county portal, find the millages assessed across every tax levy, translate the data, model current property taxes, account for exemptions and abatements, and then model a split-rate tax. Once you have a per-parcel model, you still have to analyze and visualize the policy impact. That normally takes a lot of time.

But AI agents can now do a lot of that, so it’s become one command. If you use AI coding agents like Claude Code or Codex, you can go to the LVT Shift project on GitHub and type something like “/lvt-city Cincinnati,” and you’ll get a full set of polished reports and charts that do the LVT-shift modeling for you, which you can then refine.

There are a few different skills. You can analyze a city’s legal options — can it do a universal building exemption, a split rate, and so on? Then you can model the city. Because it’s important to check the AI’s work, you can have it explain the model to you, and once you’ve seen the outputs you can start adjusting and refining. This is just one of many things we’re working on at CLE. There’s more coming on the AI front, including Lars’s work on OpenAVMKit and valuation models for property and land.

There will be a Progress and Poverty post about this soon. If you’re interested in kickstarting your local LVT advocacy, or you already have something going, please reach out to Steve and me — we’re glad to help you do the homework for your city’s electeds. You can fill out the form at landeconomics.org/form, and watch for our next LVT Landscape LIVE. In the meantime, follow the Progress and Poverty Institute’s weekly newsletter and the Progress and Poverty Substack, where you’ll see the launch of this tool, the recording, and the transcript of this event. Steve, I’ll hand it back to you for questions from the chat.

Questions from the audience

STEVE: I’ll encourage everyone to put questions for our speakers into the chat. A couple of the main ones are probably best for Greg and me to take.

Workarounds for Prop 13 in California?

STEVE: Greg, I have some thoughts, but you might want to weigh in first.

GREG: The Center for Land Economics is also releasing a report on California soon, tied to the wealth-tax debate and the idea of land as wealth that’s easy to tax, because land can’t move. Honestly, I think you eventually just have to get rid of Prop 13. There have been efforts to repeal it for commercial property, which is interesting: commercial would be assessed at market value while residential stays at 1970s values, so commercial would pay something like four times more. But those proposals don’t include vacant land. So if another measure like that goes on the ballot — Tom Steyer was running on this, though his primary results aren’t looking great — we’d argue that if you’re adding commercial, at least add vacant land too, since vacant land also benefits enormously from Prop 13. There are also vacant-building and vacant-land fees you could use. Mostly, I’m hopeful the political pressure on Prop 13 keeps building.

What are the non-negotiables?

STEVE: I’ll pitch this one mainly to Lyle, though others can weigh in. Some second-best options aren’t as efficient as an LVT but achieve similar goals. Raising the stamp duty has economic effects fairly similar to an LVT in terms of capitalization and not discouraging productive activity. Likewise, capital gains mostly come from land value, so lowering the exclusion and raising the rate captures a lot of land value without the worst effects of other taxes. Jackson, Lyle — what carve-outs or exclusions would you accept, and where are your boundaries?

LYLE: I’ve talked with California friends about this a lot. They like the stamp duty; the equivalent here would be a real estate transfer tax. It’s a workaround — not perfect, not LVT, but it gets you in the neighborhood. In Charlottesville we focused on tax relief because it was legal, not because it was perfect. I also pushed hard for tax increment financing, which also isn’t legal in Virginia. Our friends in Arlington managed it with very careful, complicated paperwork and a lot of hopes and dreams. For me, that gets you as close as you can. But LVT is the goal.

JACKSON: For me, I focus on actual real estate taxes rather than auxiliary duties that mimic the effects. When I design a property tax to deliver the benefits of an LVT, I think about land value capture: is the tax actually capturing the value generated for surrounding properties when someone builds a new structure? More importantly, I think about location — is the tax where land value actually matters? There’s no point creating a land value tax in a part of the state where the constraint isn’t land speculation, because nobody’s bidding up the land there. That’s why I was comfortable with a very targeted land value tax in my home city, even though I’d have preferred a full county-wide version.

STEVE: We have time for one or two more.

Can progressive property taxes boost affordability?

STEVE: In Singapore, property owners pay a tax on the annual (essentially rental) value of their property rather than its capital value, and the rates rise with value — a progressive property tax that goes as high as 32% of rental value, even for owner-occupied homes.

So yes, this can clearly help. The American version is a paper Arpit Gupta and co-authors are about to release — I’ll post it — showing, unsurprisingly to this crowd, that places with higher property taxes tend to have more affordable housing, not less. That’s contrary to the usual local-politics claim that we must cut property taxes to help affordability. It’s the opposite: higher property taxes capitalize out of the value of land, lowering the purchase price. You’re trading a high upfront price and low ongoing cost for the reverse, which actually helps people into homeownership. It’s a really useful way to explain that land value tax is a housing-affordability tool — not just by encouraging construction, but by lowering the upfront cost of acquiring property.

Does abolishing property tax raise land prices?

GREG: When you abolish real estate taxes, you raise the selling price of land — the value attributable to the private owner goes up. You don’t necessarily change the raw value of the land; you just raise its upfront selling price. That’s why some young Republicans have come out against this. The Charlie Kirk Show, for instance, has been frustrated with DeSantis’s efforts to abolish property taxes, because they see it as a massive wealth transfer from millennials to boomers — accelerating wealth dynamics that are already playing out. So even within the Republican Party there are real splits on this, which Lars has written about on the Progress and Poverty Substack.

Should cities lease out their land?

GREG: Cities and states own a great deal of land, much of it underdeveloped, and they can acquire more vacant land through proper foreclosure processes. Rather than re-privatizing it, there’s a lot to be done with government land leasing — being better stewards of public land, ensuring it’s developed for the uses the public wants while retaining ownership through 30-, 50-, or 99-year leases. Singapore is a good model, but there are others, including here in the United States, including in Manhattan.

GREG: We’re now about five minutes over, so we’ll close out. Thank you all for coming — this will be recorded and posted — and thank you to our panelists. This was a strong panel of people doing incredible work with real results on the ground. These are exciting times, and we hope the next LVT Landscape LIVE carries this kind of momentum. You’re the ones who can make that happen, so we appreciate you all.

At the rate that raises the same revenue — 0.77% of land value, which we derive below — the switch leaves most households better off. In fact, the average household in every income decile from the poorest up to the eighth comes out ahead; only the top two deciles pay more. Poverty edges down. Yet measured income inequality barely moves, because the tax falls on land wealth, which doesn’t track income neatly. The sharper story is on the wealth axis: wealth is far more unequally held than income (a Gini of 0.70 against 0.37), and the burden rises with wealth, falling mainly on the wealthiest households. Sorting out why broad household gains sit alongside a near-flat income Gini is much of what this post is about.

Below we explain how council tax works today, how we estimated every household’s land, and why these headline numbers need careful interpretation.

How council tax works today

Council tax was introduced under time pressure. It replaced Margaret Thatcher’s poll tax, which had collapsed amid riots and mass non-payment: the Local Government Finance Act 1992 brought it into force on 1 April 1993, leaving valuers about two years to place every home in Great Britain — more than 20 million properties — into a band.

To meet that deadline, the Inland Revenue’s Valuation Office and the Scottish Assessors brought in estate agents to band properties quickly, in some cases assessing them from a moving car — a practice later nicknamed “second-gear valuations.” Each home was placed in one of eight bands, with the top band in England, Band H, covering every property worth £320,000 or more at 1991 values.

Those 1991 valuations remain in force today. England and Scotland have never been revalued — the government shelved a planned 2007 revaluation that was never carried out — while Wales rebanded in 2005 and Northern Ireland uses a separate domestic rates system. The freeze has an important consequence: because the top band has no ceiling above £320,000, a £400,000 home and a £4 million home can sit in the same band and pay almost the same, so council tax represents a smaller share of a property’s value the more it is worth. This regressivity has prompted reform proposals — from the Mirrlees Review and the Institute for Fiscal Studies to John Muellbauer and the Fairer Share campaign — to tie property taxes more closely to current values.

A few figures set the scene. The Office of Budget Responsibility forecasts Council Tax to raise £53.7 billion across Great Britain in 2026-27. Low-income households can claim Council Tax Reduction (CTR), a means-tested rebate that lowers their bill; local authorities in England design their own schemes, while the Scottish and Welsh governments set national ones. Northern Ireland again sits outside this system, with its own domestic rates, which this analysis leaves unchanged.

This post simulates replacing council tax with a flat land value tax (LVT) that raises the same revenue. Importantly, the land tax isn’t calculated from the frozen 1991 council-tax bands — it’s based on estimates of what land is worth today, built from each household’s current property value (drawn from the Office of National Statistics’ Wealth and Assets Survey) and calibrated to the ONS’s official national land-value total. We then report the household-level impact at the budget-neutral rate.

What we find

• The UK could replace council tax with a budget-neutral 0.77% LVT on its £7.5 trillion of land value (ONS National Balance Sheet).

• 68% of households would have a higher net income. The bottom income decile (the poorest tenth) gains £481 a year on average; the ninth decile — the second-richest tenth — pays £991 more (the largest average cash loss), and the top decile pays £966 more.

• Absolute poverty before housing costs falls by 0.65 percentage points.

• The income Gini coefficient — the standard 0-to-1 measure of income inequality, where 0 means everyone has the same income and 1 means one household has it all — rises by just 0.11%. Measured income inequality barely changes even though most households gain, because the LVT redistributes along the wealth axis rather than the income axis. On that axis the gap is far starker: the Gini on household wealth is 0.70, against 0.37 for income.

Replacing council tax with a land value tax leaves most households better off and slightly lowers poverty, yet barely moves measured income inequality — because it taxes land wealth, which doesn’t line up neatly with income — which is exactly why the answer depends on which measure you use to judge a policy. If some of these results look contradictory or surprising, they did to us too; the rest of this post walks through how each measure is built and why they can point in different directions.

The model

We run this analysis with PolicyEngine UK, an open-source microsimulation, on Enhanced Family Resources Survey 2023-24 (FRS) microdata, which enables simulating policy impacts at the household level.^[1]

First, we needed to recreate the council tax at the household level. FRS households report their council tax band (A–H, plus I in Wales). The survey asks for the gross annual tax bill; about a quarter of households give an amount. For the rest, we impute the mean of those reported amounts for the household’s region × band × single-person-status cell, which captures the band rate and the standard single-person discount. Council Tax Reduction (CTR) itself comes from FRS benefit responses — recipients tell the survey how much CTR they receive — and stays separate from the bill imputation. Because surveys like the FRS tend to undercount the very rich, the Enhanced FRS adds a set of synthetic high-income households. Each one is a copy of a real survey household whose incomes are replaced with values drawn from HMRC tax records (the Survey of Personal Incomes) by a quantile random forest — a machine-learning model — using age, sex, and region. These households enter with zero weight, and the calibration step then assigns them weights so the combined dataset reproduces official income totals, including at the very top.^[3]

Following these steps, FRS-aggregated bills nevertheless fall short of published council tax totals. To resolve this, we calibrate household weights against the Valuation Office Agency stock-of-properties counts of dwellings by band and region (Scotland from the Scottish Government chargeable-dwellings dataset) and against Office for Budget Responsibility (OBR) council tax receipts. Northern Ireland doesn’t have council tax at all — it uses a separate “domestic rates” system, which we model on its own and leave untouched by this reform. (Northern Irish households still own land, so they would pay the new LVT on top of their unchanged rates bill.) The 2026-27 baseline this post replaces — gross billing minus CTR — is £57.6 billion, modestly above the OBR’s £53.7 billion accruals-basis forecast because PolicyEngine’s billing-side calibration matches dwelling stock counts and modelled CTR uptake rather than realised receipts.

On the land side, we need a land value for every household, and we build it up to match official national figures. The ONS National Balance Sheet^[2] values all UK land at £7.10 trillion in 2024. In the model, each household’s property and land values grow with the OBR’s projected per-capita nominal GDP, and we calibrate household weights so the totals match the ONS series — giving a modelled UK land value of £7.46 trillion in 2026-27.

The model then splits this total across households in two parts. The larger part — £5.40 trillion — is land households own directly: for each household we take its current property value (imputed from the ONS Wealth and Assets Survey) and multiply by a region-specific “land share” — the fraction of a property’s value that is the land underneath rather than the bricks and mortar. That share is highest in expensive regions (around 85% in London) and lowest in cheaper ones (around 42% in the North East). The remaining £2.06 trillion is land owned through companies; because people ultimately own those companies, we hand this corporate land to households in proportion to their corporate wealth — the stocks, funds, private pensions, and corporate bonds each household holds. Finally, we calibrate the household survey weights so these land values reproduce the ONS’s national and regional totals.

Ultimately, this produced a household-level estimate of tax bills under the current council tax and a land value tax which enables our model to calculate distributional impacts of a shift to land value tax. The model reports revenue, distributional, poverty, and inequality outcomes at any LVT rate, for every income decile and family type. All figures cover the 2026-27 fiscal year (April 2026 to March 2027).

Where land value sits

Land value sits unevenly across UK households—rising from £127,000 in the bottom income decile to £443,000 in the top. The three figures below, by income decile, by region, and by household type, set up every distributional result that follows.

Households in London hold £370,000 of land on average, while those in the North East and Scotland hold around £154,000–£160,000. A flat UK-wide LVT redistributes land-tax burden geographically by construction, since current land prices vary so much across the four nations and the English regions.

By household type, pensioner couples hold the most land on average (£431,000); lone parents the least (£8,000). The pensioner-couple result reflects long-tenure homeownership: many of these households bought decades ago and own outright. Averages here include corporate land that the model attributes to households through corporate wealth.

The reform

The reform abolishes council tax across Great Britain and replaces it with a flat LVT on all UK land value at the rate that holds aggregate council tax revenue constant. Northern Ireland’s domestic rates remain in place; Northern Ireland households therefore face the land value tax on top of their unchanged rates bill. The LVT applies to all land, including the £2.06 trillion held through the corporate sector, so commercial land contributes alongside residential, while business rates on commercial property also stay in place. For working out who gains and who loses, we assume the new tax is paid by whoever owns the land today. A household pays directly on the land it owns, and on its share of company-owned land it pays indirectly — the cost comes out of the value of the shares and pensions it holds. (This is the immediate, “first-round” effect: we don’t try to model how things adjust later on, such as land or rent prices shifting — more on that near the end.) Nothing else in the tax-and-benefit system changes.

Abolishing council tax retires the Council Tax Reduction rebate alongside it — there is no council tax for CTR to rebate. Households that currently receive CTR therefore lose the rebate when they lose the bill, and their out-of-pocket position changes by net council tax minus LVT.

Revenue and rate sensitivity

PolicyEngine UK estimates £57.6 billion per year from current council tax (net of Council Tax Reduction). Dividing that by £7.46 trillion of UK land value gives the budget-neutral rate of 0.77%. Table 1 reports outcomes at three illustrative rates: 0.5%, 0.77%, and 1.0%.

Below the budget-neutral rate, revenue falls, and the share of households with higher net income rises. At 0.5%, the model raises £20 billion less than the current council tax, and 79% of households gain. Above the budget-neutral rate, revenue rises, and the share of gainers falls. At 1.0%, the reform raises £17bn more and 61% gain. We hold the rate range to 0.5%–1.0% because the static model assigns the first-round burden to current landowners and does not capture land-price capitalisation, rent pass-through, or behavioural responses, all of which matter more at higher annual rates.

For context, PolicyEngine projects a baseline 2026-27 Gini coefficient on income of 0.37, while the Gini on household total wealth is 0.70. Wealth in the UK is far more concentrated than income; the static model leaves wealth stocks unchanged under the reform.

Impact by income decile

Table 2 reports the average household impact at the budget-neutral 0.77% rate: average council tax today, the LVT replacement bill, the change in household net income, and the same change as a share of household net income (post-tax-and-benefit, not equivalised). The change in net income exceeds the simple LVT−council-tax difference because abolishing council tax also clears the means-tested benefit interactions that current bills create — the columns therefore won’t subtract exactly.

Every income decile from 1 through 8 gains on average; only deciles 9 and 10 lose. The bottom decile gains £481 a year (2.3% of net income); decile 9 takes the largest cash loss at £991 (1.3% of net income), with the top decile paying £966 more (0.7% of net income). The pattern across the lower deciles is uneven because income and land holdings are imperfectly correlated: even where the average gains, a high-land minority within the decile pays more under the LVT than under the current council tax (the surveys we draw from may also carry reporting and/or measurement error). Figure 1, at the top of the post, plots this impact in pounds per year.

Across all households, 68% have higher net income at the budget-neutral rate. Absolute poverty before housing costs falls by 0.65 percentage points. The income Gini coefficient edges up by just 0.11% — essentially flat, though still in the opposite direction of the headline gain pattern. The mechanism: LVT redistributes along the wealth axis, not the income axis, so within every income decile, land-rich households (often older homeowners with paid-off properties) pay much more while land-poor households (renters, recent buyers) pay less. That within-decile crisscrossing barely shifts the overall income spread, even as decile averages move progressively.

Same reform, by wealth decile

Wealth deciles cut the same simulation along a different axis. Figure 5 plots the average net income change at the 0.77% LVT by household wealth decile rather than income decile.

The wealth-decile picture is cleaner than the income-decile one. Wealth deciles 2–8 all gain (between £484 and £1,464 a year on average); only deciles 9 and 10 lose, with the top wealth decile paying £1,042 more on average, comparable to the £966 average loss for the top income decile. (The leftmost bar, set apart from the deciles, is the roughly 17% of households that own no land at all. A pure wealth-decile cut can’t place them cleanly — many share an identical zero wealth — so we show them as their own category. Because they pay no LVT and keep their council-tax saving, they gain about £832 a year on average, and around 82% are better off.) The reform is, by construction, a tax on land wealth. It lands progressively along the wealth distribution even when the income-decile pattern is noisier. And as a tax on a form of wealth, some may be more interested in the wealth axis. Wealth in the UK is far more concentrated than income — a wealth Gini of 0.70 against 0.37 for income — so a tax tied to land wealth falls where that concentration is greatest. On this axis the burden rises consistently with wealth, where the income-decile pattern did not: the wealthiest tenth pays £1,042 more a year on average (a 43% increase), while the middle of the wealth distribution gains.

The Mirrlees Review and the Fairer Share proposal both discuss deferral mechanisms (letting households accrue the LVT charge against the property until sale or inheritance) as one design response for the income-poor, land-rich households that the income-decile averages obscure. While PolicyEngine UK can score some of these designs such as age-based reliefs or income-tested reductions, we exclude them for this analysis.

Who gains and loses, within deciles

Decile averages hide variation within deciles. Figure 6 reports the share of households with higher, lower, or unchanged net income at the 0.77% rate, by income decile.

In the top decile, 49% of households still have higher net income, despite the average loss of £966; in the bottom decile, 21% have lower net income, despite the average gain of £481. The share of losing households is around 21–27% in deciles 1–4 and climbs to roughly half by deciles 9 and 10, with non-monotonic dips in between. The same high-land-value, lower-income households visible in the loss share across deciles 1–8 are the group most LVT designs target with deferrals or transitional protection.

What this model doesn’t capture

The static model assigns the first-round LVT burden to current landowners (directly for household-held land, indirectly via corporate equity for corporate land), and holds everything else constant. It does not model land-price capitalisation — the standard result that a recurring land tax is gradually capitalised into lower land prices (Mirrlees Review). Because land is concentrated near the top of the wealth distribution, this would push measured wealth inequality down over time, but its size and timing are outside the static model's scope. Nor does it capture rent pass-through to tenants; behavioural responses in land use and development decisions; or the redesign of devolved local-government funding that any reform would require. The model also abstracts from implementation: who values the land, how often, and how to resolve disputes. And because LVT depends on land value rather than income, replacing council tax with an LVT removes the income-tested phase-out that CTR imposes on low-income households, reducing their effective marginal tax rates — an incentive effect the static model does not score.

Each is a model extension, not an alternative analysis, and we at PolicyEngine are investigating several: fuller local-authority calibration; capitalisation modelling that tracks burden over time; transitional designs (deferrals, phased introduction, age- or income-based protection); and rent-pass-through under alternative supply-elasticity assumptions.

Using the model

PolicyEngine UK is open source. The model scores specific designs (phased introduction, pensioner deferrals, multi-rate by region, alternative bases) in the same format as this analysis. The code and underlying data are public, and anyone can reproduce these results.

Notes

1. PolicyEngine UK version 2.88.20; PolicyEngine Python client v4.4.2; Enhanced Family Resources Survey 2023-24, calibrated as of May 2026.

2. ONS National Balance Sheet series AN.211 (non-financial assets — land).

3. The quantile random forest is trained on HMRC’s Survey of Personal Incomes (SPI) and predicts six income components (employment, self-employment, private pension, property, savings interest, and dividend income) from age, sex, and region. The synthetic households keep their source household’s other survey responses — including reported benefits such as council_tax_benefit_reported — unchanged. See the imputation code in policyengine-uk-data.

Code and reproducible results: github.com/PolicyEngine/uk-land-value-tax. Vahid Ahmadi is a Research Associate at PolicyEngine; Max Ghenis is the founder and CEO. PolicyEngine is an open-source non-profit that builds tax and benefit policy models. Contact: vahid@policyengine.org, max@policyengine.org.

This post originally appeared on Sightline Institute’s blog. The Center for Land Economics is grateful for Sightline’s support in assembling the mentioned report, and continuing support for land value tax work in Washington state.

Takeaways:

• Washington’s property tax system quietly rewards landowners who sit on vacant lots in our cities, while penalizing investment in the new homes, shops, and jobs that create real community value. The fix for this counterproductive dynamic is a land value tax that lowers the tax on buildings and raises it on land.

• A new report from the Center for Land Economics proposes a policy that would exempt building value from property tax to create a revenue-neutral tax shift from buildings to land, replicating a land value tax while adhering to Washington state’s tax rules.

• The report models this approach in the city of Spokane, finding that it would encourage the in-city homebuilding that cities need to curb prices, and discourage vacant lots and land speculation; it would flip the incentive structure without touching the city’s bottom line.

• Most homeowners wouldn’t see much change in their tax bill at all, while the shift would be progressive in lower-income and more racially diverse neighborhoods, where homeowners would see larger tax reductions.

• By granting this authority through the Vibrant Cities Act, the Washington legislature would empower cities to use their own tax code to cool land speculation, spur homebuilding, and return community-created land value back to the public.

In communities across the state, Washingtonians are reeling from high home prices and rents caused by the state’s severe shortage of homes. In cities and towns, big and small, from Bellingham to Walla Walla, people need more affordable home choices. At the same time, thousands of acres of vacant and underused lots pervade many of our urban neighborhoods, even in otherwise dynamic downtowns.

One big reason for this disconnect? The tax structure. Under North America’s standard property tax system, the owner of a vacant lot is taxed only a fraction of what’s paid by their neighbor who owns a productive building on a similar lot. The tax system rewards speculation on underutilized land, while discouraging investment in the new homes, shops, and offices that generate community vitality.

A fix for this dysfunctional state of affairs is known as a land value tax. Translation: tax the land more and the buildings less.

The problem is that, while a land value tax may be conceptually simple, it’s also fraught, both politically and legally. Politically, because, well, it’s taxes. And legally, Washington state has a particularly formidable barrier: the state constitution prohibits taxing buildings and land at different rates.

Undeterred, local electeds in Spokane who recognized the benefits a land value tax could bring to their city have for the past year been cooking up an alternative that has the same effect but wouldn’t run afoul of Washington’s constitution. Instead of reducing the tax rate on buildings, it would exempt assessed building value from taxation. And it would raise the overall tax rate to compensate so that the total tax collected wouldn’t change. The result: a revenue-neutral shift of property taxes off of buildings and onto land.

Could it work in the real world? A new report from the Center for Land Economics focused on the City of Spokane says yes, absolutely. Check it out for all the weedy details. Here’s the short version.

A building exemption in Spokane would do the trick

The report does the math on Spokane’s tax database of every parcel in the city. To start, one thing it finds is that if the full value of all buildings were exempted, to keep things revenue-neutral, the property tax rate would have to be raised higher than Washington’s legal limits. The solution is a partial exemption, through either a flat amount, a percentage, or a combination of both. To maximize the tax shift while staying legal, the modeling exempts $100,000 plus 75 percent of the building’s remaining value for all of Spokane’s levies except one, which had to be dialed back to $40,000 plus 20 percent.

This formula yields the key outcome you’d expect from a land value tax: for parcels that are vacant or have dilapidated buildings on them, the property tax bill goes up a lot, perhaps doubling. Instead of passively gaining from rising value thanks to investments made by the community in the surrounding area, owners holding that land get a new signal: speculating now comes with a higher cost. And that makes them more inclined to invest in building something productive on their lot or sell it to someone else who will. Tah-dah! Empty lots become homes or businesses.

Other findings:

• For most owners of single-detached houses, it’s a wash: the tax increase on their land is offset, more or less, by the tax reduction on their house—the median house in Spokane even sees a 4 percent decrease.

• The scheme is progressive in two ways: it yields greater tax reductions to homeowners in census tracts that either have lower incomes, or higher racial diversity. The flat part of the exemption bolsters these benefits because it gives a proportionally larger exemption to lower-value homes.

• Commercial and industrial properties tend to pay slightly more tax, with median increases of 0.7 percent and 2.4 percent, respectively.

• Properties with higher-value structures, such as apartment buildings, get larger tax cuts: 14 percent for Spokane’s median multifamily building with five or more homes. Importantly, this effect also sparks new homebuilding. Property tax is an operating expense for buildings, and the lower that expense, the easier it becomes for proposed housing to pencil. That means more homes get built, helping to keep rents and prices under control for everyone.

State legislation could give every Washington city a new option for boosting homes and local economic development

Last year, Spokane’s local electeds teamed up with policy wonks at the Center for Land Economics and Sightline Institute, and began working with Representative Natasha Hill (D-Spokane) to develop legislation called the Vibrant Cities Act. It would grant Washington cities authority to implement the building exemption tax shift model. Unfortunately, the bill was not sufficiently developed to run in the 2026 session. Work will continue on fine-tuning the policy and building a coalition in anticipation of a 2027 bill.

A land value tax is good policy in any economic climate. But it’s especially opportune today, when high interest rates and bloated costs for materials and labor have stymied homebuilding almost everywhere. Shifting taxes from buildings to land is something Washington cities could do, at virtually zero cost, to counteract the slump. In fact, the catalyzed new construction, new local business opportunities, and ongoing economic activity it would create could generate a lasting net gain in total city tax revenue.

On top of all that, there’s one more benefit that may be the best reason of all to love land value taxes. The value of a piece of land is largely determined by what’s around it. In cities, that value lives in the nearby buildings and businesses and public facilities that the community as a whole creates. It’s the owner of your favorite new neighborhood pizza shop, the builder eager to meet the local need for starter homes, or a new city-funded pocket park. As these investments help cities prosper, the price of land goes up even for landowners who keep their lots vacant and contribute nothing to that prosperity.

In short, taxing land pays dividends on community-created value—and reinvests it right back into that very community to fund shared public benefits. That’s about as fair as any tax can be!

Dan Bertolet is Senior Director of Sightline Institute’s Housing and Cities program.

I haven’t formed any opinions yet about Mr. Burnham or the finer details about his specific policy designs, but I do have an opinion about something else that regularly makes the rounds on social media whenever LVT makes headlines in the UK: Sam Watling’s article in Works in Progress magazine from last March, “The failure of the land value tax,” frequently invoked on social media as a slam-dunk refutation of any proposed LVT reform in the UK, and indeed, anywhere else.

Watling’s article recounts the rise and fall of the 1909/1910 “People’s Budget”, which included an aggressive push for Land Value Tax under the British Liberal party that ultimately failed. From this one historical case study, Watling draws the broad conclusion that LVT was not just an ineffective policy, but an actively dangerous one.

I will happily grant Watling’s first premise, that Lloyd George’s Liberal party failed to enact an effective and lasting Land Value Tax in the UK in the 1910’s, but my agreement with Watling ends there.

Watling’s argument is that the LVT implementation was botched, not because it was implemented poorly, but because “pure land value tax is chimerical” and therefore can’t be implemented. He goes on to assert falsely that “a pure tax on the unimproved value of land has never been successfully implemented anywhere.”

There are three major issues with Watling’s argument: first, he over-generalizes from one century-old anecdote to make provably false claims about all LVT implementations everywhere. Second, he glosses over the intense historical and political turmoil that afflicted Britain in the 1910’s and makes little effort to untangle these confounding forces with the LVT he seeks to pin all the Liberals’ failures on. Third, he zeroes in on the “utopian” maximalist goals of historical LVT advocates as a convenient target, and then expects the audience to simply assume this has much to say about modern LVT reforms, which are centered around much more modest and pragmatic, incrementalist reforms like split-rate property taxation.

As fellow substacker Darren Iversen has already written a corrective to Watling’s historical claims, we will focus our efforts on the economic ones.

Watling’s Two Pillars

To the extent Watling makes general claims about LVT, rather than historically contingent complaints about the Liberal’s specific 1910 implementation, the argument seems premised on two basic pillars:

1. Land value is practically impossible to define and assess

2. Pure LVT has never been successfully implemented anywhere

Even if we granted him everything he has to say about the People’s Budget, these pillars would still collapse under their own weight. The failure of one specific LVT implementation in one specific place at one specific time is simply not enough evidence to draw strong universal conclusions from. This is especially clear when we look at the many successful historical examples of land valuation and land value taxation, many of which occurred at the same time as the UK LVT. Watling mentions none of them.

Pillar 1: Land valuation can’t be done

Watling doesn’t assert that land valuation is fundamentally impossible, but he draws from the People’s Budget to strongly imply it:

The definition of land value was impossible to ascertain properly and became bogged down in court cases. When it could be collected, it proved so difficult to implement that administration costs were four times greater than the actual tax income. Instead of increasing the efficiency of land use, it became a punitive tax on housebuilders, cratering housing production.

It’s undeniable that the UK Liberals’ bungled this operation (with plenty of help from their enemies, the landed gentry), but Watling goes too far to generalize from this one failure, especially because we have so many other successful examples to learn from. Notably, there are no less than four different ways to credibly value land, all of which have been tested and subjected to actual real world administrative scrutiny. Two of these methods were even employed in successful Land Value Tax regimes during the exact time period as the Liberals’ LVT. Watling mentions neither of them.

Method 1: land value zones, or the “Least You Can Do” method

The first method was used during a period that overlapped the UK People’s Budget, and was in fact used to support a “pure” Land Value Tax (no tax on buildings). This was in the German colony in Kiautschou Bay/Qingdao, China, which relied on a pure LVT for sixteen years, from its founding in 1898 until its conquest in 1914 by Imperial Japan. Qingdao fell short of a maximalist “Single Tax” (in which LVT would be the one and only tax), but there was genuinely no tax on buildings, incomes, or corporations. Additionally, the LVT itself was set at a whopping 6%.

The colony enjoyed rapid growth and was widely hailed as a success, with credit given directly to its innovative Land Value Tax system. If there was ever a relevant historical example to directly compare against 1910’s Britain, it would be this one. Watling does not mention it.

The actual land valuation method employed in this successful historical experiment turns out to have been surprisingly simple; administrators carved up the territory into distinct regions with a fixed land value rate per unit of area that broadly tracked market behavior, with regular reassessments every few years. You can see an example of a historical land value map here:

The key insight behind this method is that the most important thing is achieving the incentive effects of Land Value Tax. Within this frame, achieving broad accuracy and local uniformity is what matters most, not an arbitrary degree of precision. We have written up an adaptation of this method for modern practitioners which we call the “simplest viable” or “least you can do” method for valuing land, which you can read about here:

One could argue that such a simple method cannot work in theory, but such an argument must answer for why it worked in practice, and why it produced the effects that LVT theory predicts. One could also argue that the comparison is simply irrelevant; the colony was tiny and young, the colonial overlords could ram through whatever policy they wanted, and even if one were to grant that this land valuation method happened to have worked in this one case, it could never scale or stand up to widespread valuation protests.

All of those objections are answered by the next historical valuation method, which was deployed in large cities and was in use for more than fifty years. Watling does not mention it.

Method 2: The Somers System

The Somers system was a fascinating historical land valuation method that was used for valuing land for both land value tax and conventional property tax purposes alike in dozens of American cities, during a time period that cleanly overlapped the People’s Budget. Like all other land valuation methods, the Somers system generated land values entirely separately from building values, but was also uniquely designed to generate widespread communal and political buy-in from the very start. This is relevant to Watling’s additional argument that land valuation is too politically controversial to withstand public scrutiny:

What was the Somers system’s secret? They just asked people what the land values were. However, instead of mailing out forms and having people self-assess their own land values, the process was done communally. Somers system facilitators gathered locals into a series of town hall meetings and had them work out their local land values together. Attendees would argue back and forth until consensus was reached, with the facilitator recording the community’s decisions on a large map. This process reversed the order of how valuations are done today, with community input and protest occurring before valuation, not after. Because values were decided upon by local communities rather than imposed from on high, there was much greater trust and support in these values.

This system was used in various cities throughout the US from 1896 until at least 1947, a period spanning over 50 years, and was used in many large cities in one form or another, including Houston, Chicago, New York City, Philadelphia, Baltimore, Cleveland, etc., in support of both land value taxes, as well as conventional property taxes.

Those are just two particularly noteworthy historical methods, whose tenure directly overlapped the time period Watling describes. We also have modern ones which are perfectly adequate.

Method 3: How appraisers value land right now

Many local government property appraisers in the USA and other countries are more than capable of valuing land separately from buildings, credibly and reliably, on a regular schedule, all while subject to administrative oversight and taxpayer protest. This is not because modern land value tax regimes are common, but because land valuations are a fundamental component of the most common mass appraisal method used for conventional property tax valuation, the Sales-Adjusted Cost (SAC) approach. Watling does not mention it.

In the SAC approach, one must reconcile depreciated building replacement costs for any given property with comparable market sale prices for the same. To do this properly, an assessor must produce market-calibrated land tables and locational premium adjustments, which is to say, land values.

Not every assessor is perfect and experience, training, and data quality vary widely across jurisdictions, but the best assessors employing the SAC approach produce credible land value estimates entirely separately from building values, even if their local government doesn’t necessarily care about land value for tax purposes. As we have already seen, the results don’t have to be perfect, just good enough, baking in broad accuracy and local uniformity for similarly located land of similar class, size, amenity, zoning, and local influence.

If you’d like to learn more about the SAC approach, we describe it in detail in an interview with a North Carolina appraiser with decades of experience who has worked on all sides of the property appraisal industry, both public and private:

Method 4: Copy South Korea’s Homework

South Korea does not have an LVT, but what they do have is arguably the most advanced land valuation system in the entire world. South Korea values all the land in the entire country down to the individual parcel, annually, and gets this entire operation done in five months flat. Importantly, it is specifically land value, not building value or total value, that is produced by this method. Watling does not mention it.

Our article on the subject goes into great detail about how the Ministry of Land, Infrastructure, and Transport (MOLIT) orchestrates this annual event efficiently and effectively, in concert with local and regional governments:

The short version is that the national government is responsible for setting the land values for some ~500,000 “standard parcels” which are carefully selected in advance for special attention. In all but exceptional circumstances each of these standard parcels is given no less than two independent hands-on appraisals1, which are later reconciled into a single official land rate for that parcel. Local and regional governments go on to value all the other parcels in their local area by using the “standard parcels” as reference anchors. This simultaneous top-down and bottom-up whole-government collaboration ensures that centralized enforcement of standards, consistency, and equalization is properly balanced with local knowledge and expertise.

Additionally, all the land values are fully public and accessible through API. All of those land values on a free, publicly accessible website, landforall.kr, that maps the entire country down to the individual parcel:

The site’s maintainer is also working on a 3D version, which is particularly evocative:

Land valuation is not some mysterious or impossible task, and there are plenty of robust historical and modern precedents. Watling does not mention them.

Having knocked down the first pillar, we now move on to the second.

Claim 2: Pure LVT has never been successfully implemented anywhere

Watling claims:

Pure land value tax is chimerical. Those countries that raise substantial amounts of tax from land, such as Japan and the USA, do so through taxes on property, as Britain did before David Lloyd George. A pure tax on the unimproved value of land has never been successfully implemented anywhere.

“Never” and “anywhere” are bold claims, easily disproved by evidence.

Let us take care that we align with Watling’s definitions. He says a “pure” tax on land, which he defines simply as a tax on “the unimproved value of land” (and therefore not on the buildings). It seems clear he is not using this term to mean the fabled maximalist “Single Tax,” which is a higher standard still—an annual collection of 100% of the rental value of unimproved land, combined with the absence of all other forms of taxation. Indeed, all we are talking about here is the much more modest and practical standard of a “pure” land value tax, that is, any property tax which collects a substantial amount of tax from land value, but which exempts all building value.

Watling briefly acknowledges several modern land value taxes, but immediately dismisses them all. Australia and New Zealand’s “have been repealed,” Denmark’s has too low a rate, and Taiwan’s LVT broadly exempts housing and agricultural land altogether. Watling gets at least one detail wrong here, because the Australian Capital Territory actually still has an LVT today, but perhaps he will find some reason to disqualify it.

Additionally, by making “pure” land value tax his target, Watling dismisses e.g. split-rate property taxes, which tax land at a higher rate than buildings, as well as policies which simply exempt a portion of building value from taxation. If he has a fundamental objection to those, it’s not in his article.

Nevertheless, just as with his prior four claims, even if we granted Watling his entire list of summary dismissals, this would still leave out the largest and most significant contrary examples, which Watling does not mention.

Historical LVT Examples

Watling rests his entire case on a 116-year old example, which opens the door to direct comparisons from the same era. There are no less than four notable Land Value Tax experiments which directly overlapped the time period Watling invokes, the 1900-1920’s. Watling does not mention them.

Kiautschou Bay Colony / Qingdao

This example has already been mentioned, which is sufficient by itself to refute Watling’s overly general claim.

Vancouver, British Columbia

In 1890 local Vancouver activists pushed to gradually lower taxes on buildings and raise them on land. By 1910 it already met Watling’s definition of a “pure” land value tax (no tax on buildings), and was even directly claimed by contemporaries as an example of a “Single Tax.” Contrary to Watling’s dire warnings about LVT immediately crashing homebuilding rates, this land value tax was credited even by its opponents as leading to an undeniable building boom (in fact, it was on those very grounds that they opposed it). The LVT did eventually come to an end, but it existed in various forms for over seventy years, finally being repealed in 1984.

This is a very different picture from the one painted by Watling, and one his theories do not account for. By contrast, Historian Christopher England offers a balanced and nuanced account of the policy’s rise and gradual fall from which many useful lessons can actually be drawn.

Houston, Texas

Houston had a split-rate LVT in 1912, the same exact time as the People’s Budget. Tax commissioner J. J. Pastoriza, who would go on to become Houston’s first (and last) Hispanic mayor, enacted a brief but successful Land Value Tax experiment in the Lone Star State; our three sources are Pastoriza’s testimony, Arthur Nichols Young’s book The Single Tax Movement in the United States, and the Illustrated Houston City Book of 1914. It wasn’t a “pure” land value tax, but it was close—buildings were taxed at 25% of their base value, and land was taxed at 75% of its base value.

Although Houston’s LVT experiment lasted about as long as the British LVT, it was ended not by its own failure to live up to expectations, but by the pen of a hostile Texas Supreme Court judge, backed by land speculators upset precisely because it did live up to expectations. While the LVT lasted it was demonstrably popular and had the exact opposite effects that Watling implies must always follow LVT: rents fell 20%, building rose 66% in the first 6 months and 51% in the first year, vacant lots filled in, mortgage interest rates stayed flat, and bank deposits surged. Pastoriza, in his capacity as tax commissioner, reported that his Somers system-based land valuations were a success; “out of 12,000 taxpayers only fifty refused to accept our prices as placed upon their real estate.”

Even if one doubts Pastoriza’s testimony, we have corroborating accounts from Arthur Nichols. We also have the undeniable fact of Pastoriza’s repeated electoral success, going on to win re-election as Tax commissioner on an LVT platform, and ultimately the mayor’s seat, even after the courts struck his program down. Houston accomplished in two short years, efficiently and effectively, what “the failure of the land value tax” asserts without evidence to be fundamentally impossible. Watling does not mention this.

Watling may fairly retort that we can learn nothing from a hundred-year old two-year example which abruptly ended, but in the meantime pulled in the direction LVT advocates happen to support. One could simply respond by asking why Watling then hangs his entire hat on his own hundred-year old two-year example which abruptly ended, but in the meantime pulled in the direction LVT opponents happen to support.

New York City

The Big Apple built more housing during the 1920’s than any time before or since, during a period in which new construction was exempted from property taxation. Watling does not mention this.

A retrospective report published in 1960 entitled “How Tax Exemption Broke the Housing Deadlock in New York City” provides some explanations as to why. It’s worth appreciating just how great the magnitude of housing produced in the 20’s was. The boom was so big that it amounts to a distinct archeological layer in the New York City timeline (source):

The state of the city at the start of the 1920’s was dire:

The chronology of the Twenties casts long shadows of the very plaints besetting New York today.

This was the picture four decades ago: A critical housing shortage. Rent-gouging landlords. Miserable slums dehumanizing the people in them. Inflated prices for land, labor, materials. Ineffectual controls. A welter of recommendations.

The solution?

The tax exemption law thawed the building freeze almost overnight. It attracted mortgage capital. It brought acres and acres of unused and underdeveloped land into use. It raised land values. It boosted municipal revenue. It paved the way for several pilot developments of low-rent housing units. It ended the acute shortage of dwellings in three years. It injected new vitality into the City.

No awesome powers, no vast public expenditures were involved in writing this chapter of New York City history, reconstructed in the following pages from accounts in The New York Times, and from official records. The formula excused property owners from real estate taxes on the value of new homes and apartments. This exemption specifically did not apply to sites, only to buildings on them. As the construction boom gained momentum, assessments on steadily increasing land values brought more tax money into the City’s treasury.

This reform, a time-limited “Universal Building Exemption” on new construction, had the same incentive effects as a targeted land value tax, and the empirical results speak for themselves. Even if one were to contest how much credit the building exemption incentive deserves, the one thing we certainly do not see any evidence for is the suppression of building that Watling confidently associates with the People’s Budget and generalizes to LVT itself by implication.

Lawson Purdy, president of the New York City Board of Taxes and Assessments from 1907 to 1918, was a key proponent of New York’s building exemption initiative. Purdy does not seem to have been an ardent Georgist, as he argued against extending the tenure of the building exemption once the initial period had passed, whereas a true believer would have insisted on leaving buildings untaxed perpetually. Nevertheless, it seems hard to deny that the building exemption boosted housing supply, with a clear and compelling causal mechanism: “tax buildings less, get more buildings.”

For more on this argument, see our recent article on the subject:

Modern LVT Examples

There are also modern LVT examples that continue to this day and are being newly established. Watling does not mention them.

• Pennsylvania split-rate property taxes

• Baden-Württemberg, Germany (just implemented in January 2025)

• Estonia

• Australian Capital Territory (directly contradicting Watling’s claims that all of Australia’s LVT policies have “been repealed”)

LVT momentum is growing again

The real argument that Watling seems to be circling around is something like: “Sure, LVT sounds great, but it failed this one time, and also I haven’t heard of any times it succeeded, so it’s bad.”

Reasoning from your own perception is always fraught, because an individual human mind contains an incomplete accounting of all space and time. Aside from the historical examples we’ve already discussed, LVT is also experiencing a genuine revival. No less than ten state legislatures in the US have introduced active legislation, in red and blue states alike:

Even better, two states in particular—Virginia and Kentucky—didn’t just introduce bills, they passed them into law, both in the last month:

Additionally, there is rising interest in South Korea, a state which has all the necessary valuation tools to hit the ground running, unmatched socio-political urgency, and a sympathetic ruling party:

Please Make An Actual Argument

My fundamental complaint with Watling is that he draws his conclusions far too strongly from too little evidence, trains all his fire on one narrow, maximalist version of the policy, then uses this general vibe to widely dismiss all other incarnations of the policy without actually doing the necessary work to do so. In case this was in doubt from his article alone, he makes his attitude quite clear on social media. Here’s the banner he chose for his Twitter bio:

And here’s a representative post:

I am begging people to stop posting henry george. He was an economically illiterate crank who wanted to abolish cities and whose toxic ideology is now primarily used by NIMBYs to claim land "speculation" is the cause of the housing crisis.

These claims mystify me, because we’re all YIMBYs here (prominent members of organizations like YIMBY Action and others are on our board!), but it does clarify that Watling has some sort of personal animus towards Georgism specifically, and works backwards from this to dismiss not just maximalist historical Georgism, but all related policies.

The thing is, I don’t really care about defending the personal honor of either Henry George the man or the maximalist Single Tax. I’m just interested in good housing policies that work, and I’d much rather have that argument than whatever this is. What I’d actually like to see from Watling is a genuine first principles argument, in which he presents what he actually specifically objects to, why, what makes him so sure, and what evidence could possibly convince him otherwise.

Or as I like to say:
“please state the nature of your objection in the form of a falsifiable hypothesis.”

What do you actually object to, and why?

I make this plea not just to Sam, but to everyone opposed to LVT.

Let’s go down our policy stack from top to bottom; I invite you to select which specific points you disagree with, and why. Is it only the maximalist, “utopian” policies you find objectionable, or are the more moderate policies untenable too? If so, why?

My goal is not to engender some pointless online dunking war, but to discover the actual crux of our disagreement in good faith so that we can understand each other better and learn something from this exchange.

Single Tax?

Let’s start with the “Single Tax”—a policy in which a “pure” land value tax is the one and only form of taxation for an entire state. If you think this is out of reach in modern times, congratulations, you come to the same essential conclusion that I do in my original article series and book. I freely state that for the “Single Tax” to be achievable in countries like the USA in modern times, either spending must fall drastically (which seems unlikely), or else the strong interpretation of the ATCOR theory (“All Taxes Come Out of Rent”) must be true, a thesis on which I remain agnostic.

That still leaves all manner of pragmatic, common-sense reforms—the kind that folks like me actually advocate for—on the table, such as split-rate property taxes, building exemption, and even “pure” land value taxes.

“Pure” land value tax?

These are simply conventional property taxes in which all of the building value is exempt from taxation, and the tax falls fully on land. We have already cleanly refuted Watling’s confident claim that such a tax has “never” been successfully implemented “anywhere.” Given that “pure” land value taxes have been tried, I would like to know what makes them objectionable.

Split-rate property tax?

Watling, along with some LVT critics, seems to be a fan of conventional property tax, to the extent that he blames the British Liberals’ failed LVT for “dooming” the conventional property tax in Britain.2 If you like conventional property tax, are you okay with levying a slightly lower rate on buildings and a higher rate on land? Say, a 4:1, 3:1, or 2:1 split? Why or why not?

Building exemption?

If you object to the split-rate property tax, are you okay with a simple building exemption, either for all buildings, or in a more limited way, such as only new construction, as was done in New York? Builders could provide the local taxation authorities with their building receipts and insurance policies, and have this amount deducted from their property’s taxable value. Do you object to this? Why or why not? Is it better, worse, or the same as existing property tax exemptions?

Any form of land valuation in general?

Do you simply reject all of our land valuation methods? Do you reject all the empirical evidence we have presented that the LVT regimes that depended on them were successful and achieved the predicted effects of the theory? Why or why not? Can you make a predictable hypothesis about what bad things will happen if we use them to support a Land Value Tax, split-rate property tax, or building exemption? Will you change your mind if we do that and the bad things you predicted don’t happen?

This chart?

Perhaps the argument is that taxing land and not buildings has some bad distortive effect, or cannot produce the beneficial effects it claims. Even should you dismiss all the evidence I have mustered thus far, I conclude by asking you to look at the following chart.

Here are two three-unit homes in Spokane, Washington. The sit across the street from a vacant lot. All three parcels are in the same location, in the same neighborhood, on the same street, with the same land use restrictions, and the same zoning code. The two houses are on much smaller lots, but because they have buildings on them, they pay a much higher property tax bill on a per square foot of land basis than the vacant lot does. Does this produce a tax incentive that punishes building and rewards holding land vacant on the margin? Why or why not?

I do not expect that I will be able to convince Mr. Watling and similar LVT critics today. However, I sincerely hope that I will come away from this exchange with a better understanding of their position, the foundational assumptions and testable claims upon which it rests, and I hope they come away with the same for me.

Genuinely and Sincerely,
Lars Doucet

LVT Landscape Live

In the last six months, Kentucky and Virginia passed LVT enabling legislation. And local governments are actively looking into implementation.

Join us June 3rd at 7PM ET for a webinar with the folks introducing, researching, and passing LVT legislation:

Ohio State Senator Louis Blessing, Louisville Abundance Fellow Jackson Arnold, Charlottesville Planning Commissioner Lyle Solla-Yates, and Institute for Progress Fellow Reed Schwartz

RSVP Now

Kevin Erdmann, a housing economist and fellow substacker, recently wrote a piece suggesting that property taxes are land value taxes. The basic argument is that (at least in the cases he outlines) conventional property tax falls entirely on land value anyways, so all we need to do to achieve Georgist goals is to increase property taxes.

We like Erdmann, and although we respectfully disagree with this particular take, a) Substack beefs are good for both sides’ engagement, and b) we’ve actually been meaning to talk about this exact subject for a while, so we will happily take the bait and repay our fellow housing blogger with some considered opinions about what he’s missing.

First, Erdmann’s right that the property tax contains a land value tax, and he’s certainly not wrong in endorsing property tax as a pretty good tax (something we’ve done ourselves), especially over alternatives such as sales tax, income tax, etc.

However, to suggest that property taxes are equivalent to land value taxes, or that we can achieve all our goals with property taxes alone, is wrong.

Contra Erdmann, we argue that the building tax component of a property tax is a much bigger deal than he’s giving it credit for, that it creates real distortions and disincentives to build (and therefore incentives to hoard land speculatively), and that this all becomes much clearer when you take into account the fact that the building tax applies repeatedly year over year upon the same asset.

Erdmann’s Argument

Erdmann’s article is quite short, so we recommend reading it in full, but we will summarize it here; it’s all about the mathematical incidence of taxes. “Incidence” here being a fancy tax word for “where does the burden of the tax mostly (or entirely) fall – on the building value or on the land value?”

The argument starts with a few opening premises:

• A property is a bundle of land and building that are sold or rented together as one piece.

• The rent a landlord gets from the property is fixed by local supply and demand for such land/building bundles

• Building price is fixed at its replacement cost (what you would have to pay to rebuild it from scratch today, minus depreciation).

• Land price clears based on whatever residual rent is left after the building earns its required yield

Let’s now play Erdmann’s argument out. Imagine a $600,000 home. Half of its value ($300,000) is building, the other half is land. In Erdmann’s model the building’s yield is 8% annually. Now let’s apply a 2% property tax to the whole property. What happens? Here’s what Erdmann says:

1. The rent doesn’t change, it’s a function of supply and demand and the tax hasn’t changed that. In this model, it is $2,750 both before and after the tax.

2. However, the building requires a $2,000/month return (8% of $300,000)

3. The building will keep making that return before and after the tax, the rent will stay the same, and the difference therefore comes out of the “land rent”, which also drops the land price in response:
   
   

Before:

After:

(Those are Erdmann’s charts, by the way)

The market re-equilibrates, with the same $300,000 structure now sitting on a $60,000 lot instead of a $300,000 lot. Erdmann’s conclusion: on any parcel with locational scarcity rent, “any marginal increase in property tax is a 100% land value tax.”

One Graphic Disproves Erdmann

If property taxes were truly economic equivalents to land value taxes, then the incentive systems they create would be the same. But, they are not.

Three parcels next door to each other with the same zoning all have wildly different tax bills per square foot. Under a land value tax, the per-square-foot bill would be roughly equal across the three — because the location is roughly equal across the three. Under our actual property tax, the vacant lot pays one-eighth the rate of its neighbors per square foot, because nobody has built anything on it. The system rewards keeping land unproductive.

What does Erdmann get wrong?

He makes one main mistake: he reasons only about an individual parcel in isolation, with a structure that has already been built. He never asks the question that comes before that: would this structure have been built in the first place, at this size, at this quality, on this lot, under this tax regime?

In Erdmann’s setup, the property tax shows up after the $300,000 home already exists, and the only question is how the existing rent splits between structure cost, tax, and residual land. His “100% land value tax” claim is a statement about the incidence of the tax on an already-built parcel, but not on the production margin, and the production margin is not binary.

It is not simply a question of “build or don’t build.” It is a spectrum of how much structure gets built and at what quality: A four-story building or a six-story building? A three-unit house or a single-family detached? Brick or vinyl? An ADU expansion or solar rooftop?

Every one of those margins gets compressed when the building portion of the tax rises. Erdmann shows the property tax falling on the residual at one specific parcel. What he doesn’t show is the city full of parcels where the structure that would have been built under a land value tax is smaller, lower-quality, or absent under a property tax. The parcel graphics above are precisely that city-level evidence: when you tax structures, you get less structure. The vacant lot pays one-eighth the per-square-foot rate of its developed neighbor because the system bills you on what you build, not on what the land is worth, and the developer knows this at the time they decide to build, or not.

Erdmann does attempt to treat structures as non-fixed at one point, but even there he stays at the isolated parcel level and gets it wrong at that scope too:

“If a $100,000 addition was built on the $300,000 structure above, the total rental value, whether taxed or untaxed, would increase to $3,417. However, the additional property tax would lower the residual land value by $40,000, so the net property value would only increase by $60,000.”

Erdmann presents this as fine; land value gets compressed, and the addition still gets built.

But looking closer, the owner just spent $100,000 on the addition and was rewarded with $60,000 of net property value. That is a $40,000 hole on the construction margin. Under a 1% tax instead of 2%, the hole would be roughly half the size. Under a pure land value tax with zero building tax, there would be no hole at all.

And the hole isn’t only about whether the addition gets built. It’s about how much gets built. Assume I own a parcel and I am sizing up an investment: under a 1% regime, the numbers say “build the addition.” Under a 2% regime, the same investment might still pencil but only at three quarters of the size.

Multiply across every owner in the city making decisions like that, and you get a city that builds less and builds smaller.

The Building Tax is A Big Deal

The average property tax in the United States is ~1%. That does not sound like much, when we are used to marginal income tax rates of 20% and sales taxes of 8%. However, building taxes are actually some of the most significant taxes we have, because they are an annual tax applied over and over again to the same asset.

Think of it this way. If I had to pay a huge up front one-time fee every time I wanted to build something, I would obviously build a less valuable building than I would if I didn’t have to pay that fee. Any annual recurring tax can be converted and compared to such a fee through the magic of discount rates. Let’s do this for the building component of a property tax.

Over 30 years, a 1% annual building tax has a “net present value” cost of roughly 12% to 20% of the entire investment, depending on my discount rate. A 2% tax is more like 25% to 40%. At a 5% discount rate, a 2% building tax is about a 31% tax on the original investment in net present-value terms.

This is the wedge sitting between every “build it” decision and every “build it smaller” or “don’t build at all” decision. Erdmann’s model treats it as innocuous because it gets capitalized into a lower lot price in his economic model. However, a developer can clearly see in their pro-forma, that if they build a bigger building, they will pay a higher building tax, because the building will directly add to the total property value.

This big tax has big implications. At a time with a national housing shortage, our local governments’ number one source of revenue, property taxes, are actively disincentivizing development through the packed-in building tax. If we are going to solve the housing shortage, we must decrease the building tax and offset that with an increased land tax. This may be the single, highest-leverage policy a local government can implement.

But, land taxes are annual, too?

It’s important to remind folks why land value taxes are different. Building taxes are bad because building taxes keep buildings from being built on the margin. Land taxes don’t cause land from being built on the margin, because land isn’t built, it’s already there.

You can tax the rent off a vacant lot in Manhattan at 100% and the lot is still in Manhattan tomorrow. The supply of land at any one location is fixed forever, by definition, since location is what makes land land. A tax on the rent of land cannot reduce the quantity of land, so it cannot suppress the construction we actually care about.

Instead, as the land tax is increased, the holding cost also increases, and the selling price decreases in response, but the land itself doesn’t run away.

Buildings, by contrast, do “run away” in response to building taxes. Tax the structure annually and you get less structure: smaller buildings, fewer units, deferred maintenance, abandoned renovations, or even entirely vacant lots, forever waiting for the market to “ripen.” The 12% to 40% present-value burden the table quantifies is, at the same time, the wedge sitting between many development decisions and the threshold at which they get made.

So when a property tax bill arrives, two things are happening on the same envelope. A non-distortive tax on the land portion and a distortive tax on the structure portion which is capitalized into the carrying cost of every new building.

Property taxes are not land value taxes. They contain a land value tax, and that’s good, but they also contain a building tax, and that’s bad.

Split the Rate

Erdmann’s not wrong to be a fan of property taxes in general. By all means, localities should be encouraged to drop their sales and income taxes and trade them for increased property taxes instead. However, there’s an even better policy after you’ve done that: split the property tax into two taxes, and tax the land more, and buildings less.

Lars Doucet and Greg Miller are Co-Founders of the Center for Land Economics.

• Tomorrow (Thursday May 7th), Jeff Fong, YIMBY Action Board Member and Urban Proxima writer, will be live on Substack with Ron Davis at 7PM. Ron is based in Washington State and has played a large role in passing state legislation promoting housing abundance. He was also one of the first folks I spoke with in Washington State when kicking off work on land value taxes there. Alongside Spokane city officials, namely Councilwoman Klitzke, he helped turn the idea into true political momentum. He is now running for Washington State House.

• Will you be at StrongTowns National Gathering in two weeks? If so, there will both be an LVT hangout and meetup right before the reception kickoff (register here), and there will also be a panel on LVT at the conference itself sponsored by Josh Vincent and the Center for the Study of Economics.

Loudoun County, Virginia is collecting record tax revenue while charging homeowners less every single year. The county’s residential property tax rate has dropped 30% over the past decade, even as the county budget has grown. The reason: data centers now generate most of Loudoun’s tax revenue, funding everything from body cameras for police to expanded parkland.

The data center industry in Loudoun County is so strong that one plot of land recently sold for $6 million per acre. This is not Manhattan. It’s exurban Virginia.

Over the past few weeks, I’ve been at four conferences, and at each one, someone has asked me the same question: what do you think about data centers? It’s a fair question for this Substack to take on. Data centers are the most expensive land use in America right now, and they’re reshaping the politics of every community where they touch down.

My answer has three parts:

• Data centers should be developed.

• Communities should welcome them.

• Local governments should negotiate much harder to make sure residents benefit.

Data centers are coming, the revenue they generate is real, and the question worth asking isn’t whether to allow them but on what terms.

Build Them

I don’t want to dwell on this point too much. AI is a real, usable tool that has already fundamentally changed humanity. We can stop all model progress today, and we are still at the very beginnings of the way that AI has reshaped our economy.

Compute is a major bottleneck, and future systems will rely on the data centers that provide it. Of course, we will build more efficiencies into existing systems (as DeepSeek did in 2025), but compute and data storage will still be needed. If we stop that progress in the United States, we risk falling behind China at a critical moment for technology and safety.

If you hold that AI is a bubble or actively harmful, you may have reasons to disagree with the premise of this article. But I’m starting from the standpoint that AI is important, U.S. dominance in AI is important, and the data centers that enable both will get built somewhere. The question is on what terms, and localities shouldn’t be afraid to negotiate.

A few facts worth establishing up front. Concerns about data center resource use are largely overblown. Data centers don’t threaten national or regional water supply, and they’re far less damaging to the environment and local water tables than, say, growing corn for ethanol fuel. (Though local impacts can be real, which is exactly why negotiation matters.) But data centers also don’t deliver the upside people often assume. Unlike factories or office campuses, they aren’t large jobmakers. They also do not supply amenity value, such as restaurants, hotels, or even entertainment. Instead they are large, nondescript buildings that generate significant revenue per employee.

Put together: data centers are neither as bad for a local economy as resource critics may claim, nor as good as job and amenity boosters may claim. That changes what good policy looks like.

Welcome Them

In December of last year, residents in Chandler, Arizona cheered as the city council rejected a $2.5b data center development. I am from Chandler, and this made me disappointed.

The data center proposed by Active Infrastructure would have contributed significant property tax revenue to the city: $10.2m annually. Indeed, to help incentivize the deal, the developers were ready to sign commitments for every concern of the local government:

• Not enough jobs? A commitment of 750 jobs paying at least $75,000 annually

• Too much water consumption? A commitment to a closed-loop water system

• Too much electricity consumption? A commitment to their own power supply

• Too much noise? A commitment to monitor decibels to ensure noise levels were unchanged

With all these concessions, the council rejected the data center unanimously due to public pushback on environmental and anti-AI concerns. In doing so, they rejected tax revenue that could’ve helped expand fiscal capacity. Having grown up there, I watched the city become what it is today through Intel, Microchip, and the broader Price Corridor tech build-out. Investments like these data centers are the ones that transformed Chandler into a dynamic and growing economy.

Chandler’s rejection of Active Infrastructure’s development sent a signal to the market: don’t build data centers here.

The flipside is Loudoun County, where data centers dominate. For the FY2027 budget, City Journal reports data centers will generate roughly $1.3 billion, about 45% of the total county tax revenue funding everything from body cameras for police to expanded parkland, all without raising taxes on homeowners. Because of data center revenue, Loudoun has lowered its real property tax rate every year for a decade, from $1.145 per $100 in 2016 to $0.805 in 2025

Stop Subsidizing Them

In some places, local governments have actively subsidized data center development. This is a multi-trillion dollar industry exploding in value — they do not need our help.

In Columbus, Google built a $300 million data center through a shell company called Magellan Enterprises LLC. The Columbus City Council approved a 100%, 15-year property tax abatement worth roughly $54 million in exchange for only 20 permanent jobs. Months later, the city learned Magellan was actually Google. The city, of course, was on the hook for the water and electricity infrastructure that made the project viable.

State-level subsidies are even more aggressive. At least 37 states now offer some form of sales and use tax exemption or related incentive to attract data centers. These exemptions waive state sales tax on the computer equipment, servers, software, and (in some states) electricity that data centers buy typically in exchange for hitting a minimum capital investment threshold and creating a small number of jobs.

States have created a race to the bottom where without these incentives, data centers are less likely to develop in the state. In states like Virginia with a burgeoning data center industry, the financial interests are now too entrenched to overturn such a policy.

The numbers have spiraled. When Virginia created its exemption in 2008, the Department of Taxation projected an annual cost of $1.54 million. In FY2025, the actual cost was $1.6 billion. In FY2024 alone, the exemption cost Virginia $1.02 billion, and over the decade from 2015 to 2024, the state forgave $2.7 billion more than half of all economic incentive spending in the commonwealth. Texas is on a similar trajectory, revising its FY2025 cost projection from $130 million to $1 billion in the span of 23 months.

Negotiate With Them

All of which is to say: states have already given the store away. The leverage that’s left lives at the local level which is why how local governments negotiate matters more than ever.

Imagine if local governments partnered with data centers and negotiated with them. These negotiations should start with the obvious: data centers should not negatively harm residents.

Therefore, local governments should ensure that data centers supply the grid with electricity and utilize closed-loop water systems, or ensure through some other means that water usage does not impact residents.

But, local governments can and should go a step further. These data centers are large moneymakers, and the data centers are willing to negotiate to be allowed to develop. Local governments can actively ensure that local residents are positively impacted by their development. This could look like partnering with data centers to create a fund through a Payment in Lieu of Taxes (PILOTs) where the payment is near or beyond the typical property tax the center would pay. PILOTs are often done by local governments as subsidies, but they do not need to be.

The fund could be split-use between paying down residents’ electricity bills and funding capital projects. It appears that Cedar Rapids has already done something similar through a Community Benefit Agreement, though likely the math breaks out to still be a significant subsidy.

If cities proactively built these systems of negotiation, data centers which already spend significant time on land acquisition would actively compete to locate where the city had already handled permits and approvals through a pre-set framework. Done right, this could be a win-win: data centers face less community pushback because their investment directly lowers costs for residents, and cities get reliable operating funds.

We can have data center progress without electricity poverty. We just have to bargain for it.

Greg Miller is Co-Founder and Executive Director of the Center for Land Economics.

This is the latest article in the “Mass appraisal for the masses” series, based on an interview with Thomas Holding, an assessor from North Carolina I met at the 2025 IAAO Annual Conference in Orlando, Florida.

Among other topics, this series previously covered the early 20th century communal system for valuing land, the simplest viable method for valuing land, and how South Korea values land.

Today’s interview turns its focus back to the US, describing the most common and established methods for valuing land that are actually in practice in property tax valuation offices throughout the United States.

NOTE: Neither the Center for Land Economics nor Progress & Poverty Substack has any business relationship with Thomas Holding and his employer, Piner Appraisal.

Thomas’ Background

LARS: Tell us about yourself, Thomas.

THOMAS: I’m a certified general appraiser in the state of North Carolina. I have a background not just in fee appraisal1, but for the last decade or so, I have also worked in tax offices2 as an appraiser in both the commercial and residential sides. Before that I worked with clients—typically law firms—that would hire our appraisal firm when contesting their client’s assessed valuations. Typically, these were commercial or industrial type properties.

LARS: Is it safe to say you’ve been on all sides of the aisle? “Defense” and “prosecution,” fee appraisal and mass appraisal, public and private sector?

THOMAS: Very safe to say. Correct.

LARS: And you’re with a company now, Piner?

THOMAS: Yes, Piner Appraisal, which has three separate entities, each offering different services related to mass appraisal. We have an imagery division, solutions division, and then we have a software division. At Piner Appraisal, we concentrate on doing mass appraisal for different counties, principally in North Carolina.

LARS: How many years of experience?

THOMAS: Total, around 30 years, in fee and mass appraisal. I’ve been an employee in three different county tax offices, all in North Carolina. They ranged from a relatively small county all the way to one of the largest counties in the state, which was Wake County.

LARS: How many parcels are in Wake County?

THOMAS: I believe there are around 430,000 now. When I was there, they were in the 350,000 range, but it is growing exponentially.

LARS: And what’s the smallest you’ve done?

THOMAS: 65,000.

LARS: So you’ve done all scales, you’ve done private, you’ve done public, you’ve done government, you’ve done not-in-government, you’ve done fee appraisal, you’ve done mass appraisal. What about sectors? Have you done residential, commercial, etc.? What sides of it have you done?

THOMAS: All of it. When I started out, I was working under the tutelage of a fee appraiser, and his specialty was in property tax assessments, challenging the valuations. Principally, that was for large commercial clients and it lasted for nine years. After that I began my governmental career working at two smaller county tax offices before moving back to Raleigh and working for Wake County. No matter the tax office, they all start you out measuring decks, working permits, and picking up new construction. In Wake County, they eventually let me work on commercial appeals.

LARS: So would it be safe to say you’ve pretty much seen it all?

THOMAS: I’ve seen a lot.

The Sales-Adjusted Cost Approach

LARS: What is the basic valuation procedure used in tax offices?

THOMAS: Ultimately, when you break down what we do in a tax office, everything is separated out between the improvements and the land. The way it is, in North Carolina at least, everything is on a cost basis.

LARS: Let’s have a quick term definition. You just said “cost basis.” By “cost,” you mean the replacement cost of the building?

THOMAS: Yes. Ultimately, you’re looking at the cost of construction; cost to construct, minus all forms of depreciation—physical, functional, and economic.

LARS: There’s three lines in your final appraisal, right? There’s your total market value, there’s your land value, and there’s your improvement value, right?

THOMAS: Correct. Because the cost is worked out in advance of valuing the land, ultimately, once you set your cost schedules, really all we’re valuing is the land.

Cost Schedules

LARS: Interesting. So you say the “cost schedules” are frozen ahead of time. Is that a North Carolina thing?

THOMAS: It might be. I know for each county in North Carolina, when you set your cost schedules for the different building types and different things, that has to be voted on and approved by the county commissioners. And there’s a public hearing too. So in theory, anybody from the public can go in there and can contest those costs.

LARS: So those cost schedules, those are all public. Can anyone get to see those?

THOMAS: Yes.

EDITOR: Here’s the Wake County, NC 2024 schedule of values.

LARS: That’s very interesting. So you’re saying in North Carolina, they’ve decided as a matter of law, that they go get the best evidence they can, gather all this construction information, then freeze it so they’re limiting the assessor’s degrees of freedom?

THOMAS: It can be limiting, however it’s not meant to straitjacket assessors. In order to comply with state tax laws, and provide ample time for local government and public input, there has to be a cut off point so that the rest of the revaluation process can proceed.

LARS: So if you’ve got this kind of a building, these are the cost books you have to use.

THOMAS: Correct.

LARS: And then you said something interesting. You said, “really all we’re valuing is the land.”

THOMAS: In a way, yes.

LARS: You’ve got these cost books you have to use, and those are frozen ahead of time. So elaborate how you get from there to the final value.

THOMAS: So in theory, if the depreciated cost of the components has been determined by your modeling in the CAMA3 system, the only unknown variable is the land value.

LARS: So when we say “replacement costs,” we mean “what would it cost if I had to replace my house today?” But then you have to subtract from that cost the other word you used, “depreciation.” Let’s tackle that first.

Depreciation

THOMAS: Correct. If you were to build it as of today, you’ve got a brand new house.

LARS: But the depreciation is—my house has had three children and one cat in 15 years. So wear and tear?

THOMAS: Well, there are various forms of depreciation. There’s functional depreciation, then there is the physical age of it.

LARS: But say, crayons on the walls? Holes in the roof? That’s physical, not functional?

THOMAS: That’s physical.

THOMAS: For functional depreciation, say you have a three bedroom brick ranch with one bathroom. In a modern marketplace, most families want a house with at least two bathrooms. You would have to sell for a reduced price, because it’s a disincentive to the market for you not having that extra bath.

LARS: So an extreme example could be that I built a ski lodge, but then all of a sudden, because the Earth’s axis shifts or something, the weather changes and now it’s at the beach. There’s not much demand for a ski lodge at the beach?

THOMAS: Now that’s what we call an external obsolescence, which is another kind of depreciation. It’s kind of like if you build a subdivision next to a garbage dump, and there’s a nasty odor throughout the neighborhood due to its proximity to the landfill. That is an external factor you cannot control. But that is a type of an externality that you have to adjust for that affects value.

LARS: Or if I have a lake house and then the lake dries up?

THOMAS: Right. It’s no longer a lake house. That’s external. Functional depreciation is to the house itself. If the typical expectation in the market is two and a half baths and your house only has one bath, but the market wants two baths at a minimum, you’re going to have to sell that house at a depreciated value relative to the rest of the houses in the market. Because that’s a market expectation. Now you have to determine the “cost to cure.” The cost to cure is to build another bathroom. Is the cost to cure or remedy that functional obsolescence greater than the cost that you’re going to receive in the market?

LARS: Okay, so let’s lay that out. The different kinds of depreciation you mentioned: physical, functional, and external.

LARS: Do all of them have a cost to cure?

THOMAS: No, you might have to judge. You can’t cost-to-cure an external one, unless you move that whole subdivision away from the garbage dump or maybe close the dump down. You can’t cure the fact that the lake dried up, but you can cure functional obsolescence by adding a new bath, if it makes economic sense.

LARS: Or replacing the roof.

THOMAS: Well, that’s more physical than functional. You’re lessening physical depreciation by putting on a new roof and extending its physical and possibly economic lifespan. As an appraiser, you’re not really looking at how long the building will physically last, you’re looking at how long the improvement will continue to add value to the parcel. This is typically determined by the market, and is referred to as a structure’s remaining economic life. When added together, if all of the forms of depreciation exceed the current depreciated cost of the improvement, then that structure will have no contributory value. If it can’t be cured by correcting the functional obsolescence and physical condition, then that improvement will have reached the end of it’s economic life. When the improvements no longer contribute to the overall value of the property, this could also be an indicator that the highest and best use might be changing to an alternate use.

LARS: So if the highest and best use here used to be, I don’t know, a fishing shack, but now it’s a big subdivision or whatever?

THOMAS: It might be, if the site is large enough, it might go from commercial to residential, or as is typical in many urban areas, a residential neighborhood might be changing to commercial.

LARS: So for example, this used to be just a little house on the prairie, but now it’s a happening business center, and highest and best use might be that we should put a three-story office building here?

THOMAS: Correct.

LARS: So first, you’ve frozen these cost tables. Then there’s the cost-to-replace-new, but then there’s also these three forms of depreciation and obsolescence to worry about. Now are those depreciation tables frozen as well, or are they specified in mechanical guidelines you must follow?

THOMAS: They are approved and set when the schedule of values is approved. Depreciation tables are meant to recreate typical economic life cycles of different property types and should represent local market norms as much as possible during a revaluation period. After testing, depreciation tables are submitted to the representative taxing board or county commissioners and are voted on as well. If approved, they are used in property analysis and do not change. As I stated before, because everything has to be presented to the county commissioners and public, there has to be a cut off point so that the rest of the revaluation process can proceed.

LARS: And so from a kind of devil’s advocate perspective, right or wrong, you don’t have a choice, but to follow those rules once they’re voted on.

THOMAS: Once they’re set, yes.

LARS: And so if there’s a problem with them, then the cure is to make better decisions before you vote on them.

THOMAS: You don’t typically have a problem with the cost or depreciation tables. Before you submit them they have been pretty thoroughly tested.

LARS: But generally speaking, are they pretty good?

THOMAS: You can get very close when modeling your cost and depreciation schedules. The IAAO has many great courses that teach how to do all these things.

Land Residual Theory

LARS: Let’s say a property sells for something that does not match the simple cost to replace it in the abstract. Is the difference typically just the land value? According to the naïve “land residual” theory at least? Or is there more to it?

THOMAS: No, not necessarily.

LARS: Let’s go into that.

THOMAS: In appraisal theory, like I said, you have three approaches to value. We have the sales comparison and cost approaches, where you analyze sales prices and the cost to build (including the land and site costs). If you have an income component, there’s also the income approach. In theory, all three methods should arrive at the same value, unless there is an imbalance in the Four Factors of Production4. Land residual theory is more of an appraisal/economic concept that says land value is what remains after the other factors of production have been paid. Under land residual theory, the income generated by the property is first allocated to non-land components like the building and the business. Whatever income is left over is attributed to the land and is then capitalized into an indication of land value.

LARS: You just listed the “cost approach” and “sales comparison” approaches as two separate things, but appraisers I talk to often say they use the “sales-adjusted cost approach.” Is that a hybrid of the sales comparison approach and cost approach together, or is it a separate term of art?

THOMAS: A sales-adjusted cost approach is best understood as a cost approach calibrated by market sales, not as a separate third approach and not exactly a full hybrid approach in the same sense as blending two independent indications of value. In assessment work, especially mass appraisal, we often build cost schedules for structures, and depreciation tables for age, condition, and quality. But those schedules cannot simply be theoretical construction-cost numbers. They have to be tested against actual market behavior.

LARS: So you’re doing a cost approach and then you’re also looking at the market sales and reconciling them?

THOMAS: Yes, in a way. That is where the “sales-adjusted” part comes in. After developing the cost model, the model is checked against qualified sales. If the model is consistently too high or too low for a neighborhood, property class, age group, market area, or building type, market-derived adjustments or calibration factors can be applied if necessary. Those adjustments are derived from sales, but the underlying valuation framework is still the cost approach. There are always things in real estate markets that are hard to gauge, and you know, the standard variations in sale price you’ll typically see out in the wild for residential housing is between 5 and 8%. These are just normal market variations. People have their preferences like, “Hey, I like that kitchen better…”

LARS: “There was a peach tree in the backyard that reminded me of my mom.”

THOMAS: Exactly. And I’m paying more.

LARS: And someone else is a hard bargain driver. And so you’ve got that central tendency that runs through it and then some people get a good deal, some people get a bad deal, some people get nostalgic.

THOMAS: But to them, it might not be a bad deal because they wanted whatever feature that was.

LARS: Do you just follow that central tendency of the market rather than any individual sale?

THOMAS: Yes, we’re reacting to where the market is going and then we’re trying to model that as best as you can within the constraints of our CAMA system.

LARS: And the market is more an overall tendency than anything reflected in any individual sale?

THOMAS: Yes.

LARS: So my next question is, now that we’ve done all the homework and explained to the lay audience, what all our jargon and our terms mean and what we’re working with and how we’re limited by the cost tables, at least in North Carolina, how do you then make up the difference and create a combined value, a full, filled out, all three lines that matches the market tendency that you’re seeing and is also well supported and defendable? How do you do that?

Location, Location, Location

THOMAS: It’s not just as simple as the remainder is the land value, because there could be other elements. It could be an external factor like we talked about that is affecting that particular property or a group of properties. They could be next to a garbage dump. So that might require a local adjustment made just for that specific neighborhood. Those houses might be tract houses in this neighborhood that are exactly the same as tract houses across the county made by the same builder and everything. But just because of an external factor that affects this group of houses, we might have to apply some type of factor to make them reflect the market in that particular neighborhood. It’s locational in effect. It’s located next to a dump. It’s hyper-local. It’s an external factor that affects that. So that’s some assessor jargon.

LARS: So an “external factor” is something that might apply to a very specific localized area as opposed to a land table for a whole area?

THOMAS: Correct. The general model should match the greatest number of parcels county wide. Then you drill down into the ones that don’t fit on the line. The hardest part to appraise is not the properties that fit the model. We spend the most time generally in looking for the ones that don’t fit and try to determine “why didn’t it fit?” Is there some factor that I have overlooked that might be affecting its value that I need to compensate for in some way?

LARS: So you’re examining the market for those factors. So you do not just do a one-size-fits-all solution? You might start with a broad brush, but then you notice that you have to dial in these exceptions?

THOMAS: Correct.

LARS: And what are those exceptions?

THOMAS: All the typical ones that apply to real estate like location, size, age, condition, quality, extra features, and economic or market conditions. A locational factor could be how close a property is to a metro station. That might be a positive factor, but if the residential property is located directly adjacent to the rail line and is subject to loud noises 24/7, then to some people this might be a negative factor. If this is reflected in the sales data of properties that have these attributes, as opposed to properties that do not suffer from the same condition, then you can usually derive a suitable adjustment factor that can be applied to those specific properties.

Land Value and Size

LARS: It sounds like you start with these cost tables, and then you also have sale prices from the market. The prices tell you where the general market tendency for an area is for a certain kind of property. But each property is unique, and has unique characteristics. You punch those characteristics into the cost tables, and you get your cost value plus depreciation, and you work out your functional depreciation and all the rest of it. And then, you have land values that you can paint across a neighborhood. However, lots can be different sizes, they can be different shapes. How do you handle that? Does each lot get a standard base value with exceptions, is it handled per square foot, per acre, how do you do it?

THOMAS: Different tax offices do it in different ways. Particularly in tract neighborhoods, they might have assigned a base lot value, which is standard for every lot in that development regardless of size. Usually the unit of measure for the land depends on several factors like its size, shape, or maybe road frontage. For residential neighborhoods, typically the lot value is used.

LARS: So within a neighborhood, the same price per lot.

THOMAS: Correct.

LARS: And is that to reflect a market where people are like, “I don’t really care how big the lot is as long as it’s big enough for a house?”

THOMAS: It might. And you tend to find that in urban areas everything’s generally a rectangle or a square, there’s not even that much of a change in size anyway.

THOMAS: You might find more variation in rural areas, or you’ll see parcels around a cul-de-sac that are pie or more wedge shaped and are larger than a typical parcel in the same development. You might have two residential parcels and one is a standard size, and one might be twice that size. But they’re zoned the same, they have the same utility, the same use. When compared to the smaller average sized parcel, the larger parcel has “extra” land. That “extra” land has to be evaluated, so as an appraiser, you have to perform a series of tests to determine what value if any the extra land adds to the overall value. You can look at the zoning to see what you can legally do to that extra land. Can it be separated from the main tract and developed on its own? If it can pass a series of tests, the appraiser can determine if the “extra” land is excess land or surplus land. This applies to both residential and commercial properties. If a larger parcel can be subdivided, then you will have to determine the highest and best use of the hypothetical parcel.

LARS: So when you say “highest and best use,” you’re really saying “highest and best legal use?”

THOMAS: That’s part of it. It might be a physical use too. If the parcel’s half an acre, it might be zoned for that, but if you can’t physically put another structure there, it’s not physically possible to do it. Land has to pass all these tests: is it physically possible, legally permissible, is it financially feasible and will it generate the highest return to the owner?

Excess Land vs. Surplus Land

LARS: You just used some terms I’d like you to define for our audience: “excess land” and “surplus land.” What is the difference?

THOMAS: Surplus land is extra land that is not currently needed to support an existing improvement, and that land cannot be separated from that parcel and have another use. Say you have zoning that’s a minimum lot size of 10,000 square feet. If you have another lot next door that’s 14,000 square feet, you can’t chop off 10,000 for one house and 4,000 for another and legally build another house on it. The 4,000 square foot portion really doesn’t have the same functionality as the other. You can’t split it off, you can’t redevelop it and put another house on it. It’s just extra undevelopable land that typically has little contributory value relative to the base lot.

LARS: I believe the way you put it yesterday was: “surplus land is just more grass to mow, but excess land is extra land you have that you could, if you wanted to, turn into its own lot or its own use.”

THOMAS: If it passes all the tests I previously mentioned, there’s a potential that’s not being met and you can develop it for a separate use. This is why surplus land is more valuable.

LARS: And you’re making those designations in the CAMA?

THOMAS: It depends on the system. In different counties where I’ve worked, that might not be noted in the parcel information. If you can visualize the parcel characteristics like size, shape, topography and zoning when you’re looking at ArcGIS or aerial photography, you usually get an indication that a parcel needs to be looked at a little more. If it’s necessary, you can always determine the value of the excess land and apply that as some type of adjustment.

How Complicated is it?

LARS: There’s this phenomenon when anything you know how to do feels easy to you, but to someone who doesn’t, it feels impossible. When I talk to people about valuing land, they sometimes say, “it’s going to be so insanely complicated, we’re going to have to hire all these people to do it. Meanwhile, I see we’ve got, what, 11,000 property jurisdictions in North America, and the staff are already there and their salaries are already being paid? There’s someone local who’s already doing it. And in your jurisdiction, that person was you. Is this actually as complicated as it sounds?

THOMAS: Not really. I found in working with the public, a lot of times the hardest part is just explaining things to property owners. “Why is my value different from my next-door neighbors?” or why, especially in commercial, are there different grades or condition ratings? As far as valuation, once you understand it, appraisal theory is appraisal theory as long as you can recognize those factors that affect the value. I guess sometimes the hardest part is recognizing those factors but a lot of that just comes with experience.

LARS: I guess people just get intimidated by the fact that there’s so many parcels that no one could possibly ever do it in a year.

THOMAS: That is difficult. If you notice in most tax offices, when you’re looking at the records going back and you see adjustments in the system for size and shape, and topography. Those usually go back many years because a lot of those factors don’t really change unless the parcel geometry changes due to a sale or a split or something like that. In CAMA systems, that data has been accumulated over many revaluation periods and so that’s why we don’t just discount it and start with a clean slate each time because generally there’s not enough staff, resources or time to individually inspect every single parcel.

Land Appraisal 101

LARS: Okay, now, break it down for me for the sake of our audience. Let’s say I’m a junior appraiser, you’re the chief appraiser, and you tell me “Lars, we’re putting together an in-house land team, you’re the apprentice, here’s a neighborhood and you’re going to value all the land in it. Here’s all your ingredients.” Lay it out for me, how do I do it? Starting with the basics and then building up little by little?

THOMAS: If you’re starting out, you’re going to have them evaluate a tract subdivision where everything is cookie-cutter, as much as possible. That’s a great way to learn, because you can see very clearly the breakout of the costs. A lot of times you go into a subdivision by a tract builder like Lennar, or one of the other nationwide builders, and they will have a component list of prices. You want a covered porch on the back of your house, they can add it for a set price of $4,500.

LARS: And you’ll have that info?

THOMAS: I try to get it if at all possible. I search out every form of data I can get my hands on. We don’t just use national cost manuals, we also use local cost sources like building supply and lumber stores, and other local market data too. Any national cost data that you get, you have to localize it to your particular market, because lumber, transportation, permitting, and labor costs can vary so much.

LARS: And from year to year?

THOMAS: Yes. Costs can definitely change from year to year.

LARS: So I’ve got the cost tables, those are frozen, I don’t have any degrees of freedom there, I just have to follow the rules. I’m going through, I’m punching them into the CAMA. What else am I doing as a junior appraiser to the point where you can feel comfortable letting me do it by myself?

THOMAS: You want to identify if there are differences in home prices in a development. If there are differences, why do they affect certain houses? Is it a difference in the lot size, quality of construction, foundation type? Some developers charge a “lot premium” for different things like a better view a golf course or proximity to the neighborhood pool or some other amenity.

LARS: And so what is the action I’m taking to make the pieces fit?

THOMAS: First, you determine what caused a difference in price, then you check and see if there are similar properties in that neighborhood that might be affected by that same condition. If there are, compare those properties with others that do not have the same condition. This is what we call “matched pairs analysis”. In theory, any difference in value can be attributed to the physical differences between any two properties. Because house types and lots are typically very similar in tract neighborhoods, it is relatively easy to isolate the different components to derive your adjustments.

LARS: Okay, so what that sounds like to me is I’m creating some tables, right? I’m creating maybe like a base value, and then I’m creating some adjustment values for certain cases and defining those?

THOMAS: Possibly, yes. If you can do that in your CAMA system or whatever that you are analyzing. We always have to remember, at least in North Carolina, everything that’s in there has to be made public. We have to be transparent and we have to be equitable.

LARS: So not just those three line items on the public card, but all my scribbles, everything.

THOMAS: Every table is made public. Every county has to publish what’s called a schedule of values, which outlines how your property is valued.

LARS: So if I have “Lars’s dirty hack to make the numbers work,” in there?

THOMAS: You probably wouldn’t want to do something like that. There has to be a way for the public to be able to see how the county calculated your value. When I was in private practice, one of the ways we would successfully challenge an assessed value is if the county utilized unpublished adjustment tables. If a county used adjustment tables or ranges that were not at least referenced in the schedule of values, it was easy to make the case that the undisclosed adjustment was likely arbitrary and a violation of state tax law.

Level 1

LARS: Let’s treat this a little bit like a video game where you start on level one and everything’s real simple and then you add one more thing at a time.

So let’s say I have my neighborhood of tract homes. I’ve got all the cost figured out, all the depreciation. I’ve tagged everything that has a view, I’ve figured out which lots are weird shapes, which ones have excess land or surplus land. I’ve got the zoning ordinance and all that context figured out. I haven’t punched in land values yet, but as far as I can tell I’ve controlled for everything but that. At this point is the difference the land value? I need to make it rise so that when I add it to my cost plus all the other stuff, that I get within acceptable tolerance of the sale prices?

THOMAS: In theory, yes, it is.

LARS: Now, do I just need to make it rise so that when I add it to my cost plus all that other stuff, that I get with an acceptable tolerance to the sale prices?

THOMAS: According to the theory, the sales price minus the depreciated value of the improvements, the remainder is going to be the land value.

LARS: So in a totally homogeneous neighborhood, with all the land the same size and shape and zoning, and all the homes built within, say, five years of each other, and they’re all more or less identical, does pinning down a base lot value get you to the end of “level one?”

THOMAS: Every appraiser wishes that the majority of the subdivisions they analyze are this homogeneous and straightforward. In theory, like I said, it should be very easy to figure out the land value in this type of development.

Level 2

LARS: What’s a complication you add that makes it a little harder?

THOMAS: I’ve run into instances where the county or the state had announced they were going to construct a four-lane road highway adjacent to an existing subdivision. Up until the date that the construction project was announced to the public, the prices of homes and undeveloped lots were consistent throughout the subdivision. After that date, the prices of homes and vacant lots on one side of the street went down $10,000 to $15,000. The proposed road had not been added to the county GIS yet so there was nothing that stood out as to why the sudden difference in sale prices. I was flummoxed so I did what everybody else does, I went to Google and entered the name of the subdivision, the street name in the subdivision, and the main public road at the entrance to the subdivision. Google returned a bunch of news articles announcing the new highway and the 20-foot sound deflecting wall that would run along all the houses bordering the new road. Other times I’ve seen sewage assessments that affect a small subset of houses within a larger development. These things do happen and you do your best to find out what’s going on. It’s like solving a mystery. There are a million different things that pop up like that, sometimes the only way you can figure it out is experience.

Level 3

LARS: What’s another?

THOMAS: You’ve got cases like in Silicon Valley, where you have a 1973, 2,800 square foot brick ranch—that same house might go for $250,000 somewhere in North Carolina. In California it’s $3 million. That’s location specific. It doesn’t have any correlation to the actual cost to build that house.

LARS: So is the difference between the North Carolina home and the California home, I mean, is that just land value premium because of the location?

THOMAS: It very well could be a location premium. It’s definitely a function of supply and demand, and this is not uncommon in other local markets either. There’s always a hot area where somebody wants to live or build.

LARS: The bigger that locational premium is, I figure the easier it is to notice it? As opposed to when the location premium is low, it’s kind of hard to separate.

THOMAS: Generally, it is. Where it can be difficult is when you’ve got adjacent areas that are closer to that high demand area. Redevelopment hasn’t quite crept out there yet, but asking prices already have.

LARS: So this was something I saw just in my own research the other day. I was working on a report for Maryland. And I noticed something—I was looking at the Bethesda neighborhood, which is kind of an upscale place. And I noticed this weirdness while I was validating vacant land sales, I noticed there were vacant land sales there, and they were going for a value that was lower than the improved sales, which is normal. But then I noticed some improved sales that were going for the same price as the vacant land sales. And I noticed they were all homes from the 1930s that were a third as large as all the new buildings.

THOMAS: And that’s the functional obsolescence that we talked about. If the existing house is below current market expectations, Is it curable? Can you add a third bedroom and a second bathroom to the structure to make it more palatable to potential buyers. If not, or if the cost to do so is too high, then the improvements might not have any contributory value.

LARS: What was interesting is that the market seemed to be pricing these things as the building basically being worth zero.

THOMAS: Yep. And that is a clue in itself. When the improvements are trending below the land value or approaching zero, that means the highest and best use is changing or the existing houses may be under improvements for that particular market. And that’s suitable for redevelopment then. That’s, that’s the big clue.

LARS: So, when you see a neighborhood, which has two kinds of building typologies and the older and smaller building typology is not selling for any more than bare sites, then that indicates that the market sees these as tear-downs?

THOMAS: I had a case recently, where a residential property owner purchased an older home that was adjacent to several commercial properties. The property was zoned as commercial, but the residential use was also permitted. The homeowners completely renovated the property and moved into it. When the property was reassessed last year, the residence itself was fully taxed as if it were a residential structure, in like new condition with a very low effective age. The county tax office also valued the land as if it were commercial use, compatible with its zoning. The renovated house might have been considered an under improvement for that lot, but the value of the land indicated a change in the highest and best use. This is not an uncommon occurrence, but it violates the Theory of Consistent use, meaning that the land and the improvements must be valued based on the same highest and best use.

You cannot value the land as though it will be used for one purpose, while also valuing the existing building as though it will remain in another use.

LARS: I see.

THOMAS: If you’re saying the highest and best use of the land is commercial, then the residential improvements have zero value.

LARS: So if you’re going to say that it’s commercial land, which is plausible because it’s zoned commercial and the market might buy that—but if you’re making that argument, the incompatible residential use is contributing nothing to that commercial value.

THOMAS: Exactly. So the county can’t have it both ways and cherry pick the highest value of each, because then you’re overtaxing the citizen in that case.

LARS: What it can’t do is basically create a layer cake of half one and half the other.

THOMAS: Exactly.

LARS: What it can do is say: here’s residential land valuation and residential building valuation, that would be this residential total value. And then, here’s commercial land valuation and commercial building valuation, and in this case the “commercial” building valuation is zero because it’s a residential home.

THOMAS: That’s right. Unless the house could legally be renovated into leasable office space, and if there’s a market for a renovated house as office space, then it could conceivably be converted to commercial use, but it has to be worth it to do so.

LARS: That’s what they would have to defend.

THOMAS: Yes, but fortunately for the homeowner, the county couldn’t defend their valuation, and the land value was reduced.

Final Boss

LARS: So going back to our little video game metaphor, what’s the final boss?

THOMAS: It’s data quality. Always. That’s the bane of every tax office, of every appraiser.

LARS: Is it lack of sales or lack of characteristics?

THOMAS: Generally, it’s lack of sales. You have to compare it with something. And in appraisal theory, if you don’t have sufficient sales in an area, you can either go back in time or you can extend your search area outward to try to find a comparable neighborhood or comparable property. Sometimes that’s easier said than done when you’re doing mass appraisal, because in a lot of tax offices, they like to stay within the jurisdiction of the county. They don’t want to go back in time prior to the previous revaluation. So you might be dealing with three or four years of sales in the county, and especially for commercial properties, you might not have had a sale of a unique property type within that time frame within the county. So you might have to search several counties over or throughout the state to try to find meaningful data.

LARS: Let’s keep it residential for now. Let’s say you’ve got a residential neighborhood and you just don’t have any sales in it, and you go back in time and there’s none recently. But you have another neighborhood that has the same kind of typology. It’s got similar land shapes and sizes and similar building sizes, types, and ages. And you notice you don’t have any land sales in neighborhood A. But in neighborhood B, you do have land sales. And you notice that these neighborhoods have similar selling prices for houses overall. Is it fair to assume they have comparable land values on the neighborhood level?

THOMAS: Yes. If that neighborhood has characteristics similar to one you are evaluating.

Open Data

LARS: So in theory, maybe I have to write some data record requests, but I should be able to go to any North Carolina county and say, can I see your tables and see if I can reproduce all your results?

THOMAS: Yes. Counties should be able to supply you with copies of any tables that were used to value any property. As I stated before, they are typically published in the Schedule of Values, and most counties have copies of those online. If cost ranges were used in the schedule of values instead of a complete table, then you can again request a copy of the complete table that is referenced in the schedule. Sometimes the online representation of what you see as your value is not the complete picture. I always recommend that taxpayers request the actual tax card to be printed out, not just what’s on the web page. The actual tax card will show data from the CAMA system and detail every adjustment that’s made.

LARS: Can you request that in bulk?

THOMAS: I don’t see why not. You might have to pay for printing costs, which would be substantial or typically you can request the information in digital format as an Excel or .CSV file. Most larger counties in North Carolina have most of this information available as a data file on either the tax website or the county GIS website for free.

LARS: Right.

Land as an Afterthought

LARS: Now, I’ve worked with a bunch of different jurisdictions, a bunch of different places, and some places struggle more with land than others, and my goal is just to help everybody learn from the best. And I’ve seen some places where land is sometimes—to kind of be polite—it’s kind of an afterthought. Because we’re taxing on the total value, and there’s no law that really cares about the land value, and so what will sometimes happen is they’ll just do the land as an afterthought, they’ll write something, anything down.

And one thing I’ve seen sometimes is that they will just do an allocation, but the way they’ll do the allocation is per parcel. They’ll have their total market value, and they’ll just be like, okay, the land is, say, 20% of whatever the total market value is.

THOMAS: You have to be careful when you’re doing something like that. If they are trying to just match the sale price, but the land is essentially identical, then this might be masking a feature or condition that has not been picked up by the appraiser. This is especially true for residential properties. Commercial properties might be different if they are income producing and the total value is based on the Income Approach. In my opinion, when residential land is valued this way, it would be much harder if not impossible to defend during an appeal by the taxpayer. It doesn’t make sense that identical lots in the same subdivision or neighborhood would have different values, and if I were a taxpayer, that is the first bit of evidence I would bring up in an appeal.

LARS: What should you do instead in that scenario? What’s the least you can do?

THOMAS: First thing is that I would review the tax cards for all the sales to try and find if the differences in sales prices are anything more than normal variances. There is so much information available on the web including Zillow, Redfin, the local MLS if available, to make sure that what is recorded on the parcel card is correct. Once I did that I would look at my available data to determine which types of analysis I can perform to try and accurately determine the land value. If you have enough improved sales you can utilize the Extraction method where you start with an improved sale and subtract the depreciated value of the improvements to isolate the land value. Like you mentioned, the Allocation method can be used but one of its greatest weaknesses is that it depends heavily on a reliable land-to-building relationship. It’s usually better suited for broad reasonableness checks than for highly precise valuation. If you can find rental information, including current income and expense data, you could possibly use the land residual method. This is an income-based method which estimates the income left over to the land after the improvements receive their required return. With so many residential properties being purchased as AirBnB rentals, data is readily available and can be supplemented with occupancy tax data if it is levied in that city or jurisdiction. Basically, you use whatever appropriate appraisal methodology you have the data for. If possible, perform multiple types of analysis and compare the results to test for reasonableness, then you decide what is the best fit.

LARS: Is it appropriate to say that all else equal, if two side-by-side lots, all the land characteristics, location, and all the characteristics, like size and shape and grading of the land is the same, regardless of the improvements, should they have the same land value?

THOMAS: Yes.

LARS: Because it would require a different characteristic, legal use, et cetera, to justify a different land value, right?

THOMAS: Correct.

LARS: So what is a way to recognize and test when land values are good?

THOMAS: If you see an assessed value that is greatly above or below an acceptable threshold for that land, or if you see what builders are paying for land and the tax value doesn’t reflect the market, then you know somewhere you’re off. As I stated previously, depending on the available data, you can perform other types of analysis besides Allocation. It’s really just a test of reasonableness. When I was taking my first appraisal courses 30 years ago, my instructor always said, “Before you sign off on any value, stop and ask yourself, what would you yourself actually pay for this property?” This goes for both vacant and improved properties. Then ask, “What would a typical person or typical investor pay for the same property?” If there is a difference between the two, you should take another look at your value.

LARS: And you’ve already talked about uniformity is another test.

THOMAS: Correct.

LARS: Thank you very much, Thomas. I really appreciate it. Where can people learn more about your work?

THOMAS: They can come to our website, pinerappraisal.co. We have our contact information on there. You can see the services that we offer.

If you are a Universal Basic Income (UBI) or Land Value Tax (LVT) advocate, you need to be paying more attention to South Korea because that country may just be the biggest opportunity in the whole world for your movement.

For UBI or LVT to succeed anywhere, they must first succeed somewhere.

Politicians are skittish, but they are also sheep—they never want to be the first to try something, but the second something new and trendy seems to already be succeeding, they all get jealous and want to copy it. Therefore, if you want UBI or LVT to succeed, you should scour the world for a place where these two policies are the most:

• Economically feasible

• Technically feasible

• Politically possible

• Socially and politically urgent

That place is South Korea.

South Korea is a Big Deal

South Korea has several features that make it uniquely suited to an aggressive and large-scale UBI pilot funded by LVT, and the political timing has never been better—or more urgent. This blog post is the result of ongoing interviews with various Korean activists—chief among them Vitnarae Kang and Jinsu Lee—working to bring those policies to life in their country; my mission is to spread their message to potential supporters internationally. Jinsu in particular works for the Land & Liberty Institute1. Quotes are by Jinsu unless otherwise indicated, for which Vitnarae provided the English translations. Jinsu’s interview did not originally include links, I added some citations for the convenience of readers, but otherwise did not alter the text except to arrange sections for editorial flow.

Let’s go down the list of why South Korea matters so much right now.

Economically feasible:
Incredibly high Land to GDP ratio

Two of the most common objections to UBI are “how will you ever pay for it?” and “won’t the UBI just lead to inflation when landlords jack up the rents?” Both objections are solved in one stroke with a simple retort: pay for the UBI with a Land Value Tax (LVT).

For this to work, however, there must be sufficiently high land values available that aren’t already being tapped. This is indeed the case in South Korea. South Korea’s land value to GDP ratio is in excess of 500%.

That is an astoundingly high figure, the highest in the OECD. To put that number in perspective, my own research puts the United States’ total land value to GDP ratio in the ballpark of a mere 200%. If you were at all excited by the figures I produced in my article series and book, then you should be more than twice as excited about South Korea’s.

Of course, the immediate reaction to hearing about Korea’s anomalously high ratio is that it sounds too crazy to be true. This must be some kind of temporary bubble, purely artificially elevated land value driven by insane mania or speculative froth that can never actually be captured. However, it turns out that long-run (last 50+ years) land value-to-GDP ratios are ~400%, and that the current ratios aren’t even at peak levels—the all time record tops out around 600%. Plain and simple, desirable land is just that valuable in South Korea—and that scarce.

The upshot? Taxing South Korean land values could generate an enormous amount of revenue, and a modest LVT could easily raise enough for a meaningful UBI with no risk of evaporating the tax base. This would directly drive affordability in two ways: provide direct financial support to struggling Korean citizens, while taxing the speculative extraction that makes housing unaffordable in the first place.

Technically feasible:
The land is already valued

The next objection to a UBI+LVT proposal is griping about how hard it is to value land. As we covered this in our last article, How to Value Land: Korean Style!, Korea has long since solved this problem.

All the land in the country is regularly valued by a central agency, down to the parcel, and this public data is sufficiently easy to obtain that Jinsu Lee has put together an interactive map that shows all the national values down to the individual parcel (https://landforall.kr):

Additionally, all the legal infrastructure for a land-based property tax is already in place, because there is already a nominal property tax. Of course, the current effective tax rate for holding property is quite low (the current political status quo favors high transaction taxes instead), but the existence of a non-zero nominal holding tax still provides the necessary scaffolding for instituting an LVT.

Politically possible:
President Lee Jae Myung

New president Lee Jae Myung has historically been a strong supporter of both UBI and LVT, although he has moderated his stance in public in order to get elected. Sources tell me that he remains a firm true believer and is simply waiting to marshal sufficient political capital, which may already be underway as he is achieving high approval ratings. Meanwhile, the former leader of the opposition, Yoon Suk Yeol, just got jailed for life for attempting insurrection.

This is not to say that there are not political headwinds and stiff opposition to overcome in Korea. However, having a national leader who has even heard of one’s favored policies, let alone personally advocated for both of them in the past, is a far cry from what UBI and LVT advocates are used to here in the West.

Socially and politically urgent:
Housing + Affordability + Fertility crisis

South Korea is widely recognized to be facing an existential crisis, exemplified by their rock-bottom fertility rate far below 1.0, the lowest in the OECD. Youtube explainer channel Kurzgesagt famously declared “South Korea is Over“ in a particularly doomy video with no side order of nuance or irony:

All the Koreans I speak to agree the situation is bad, and that if everyone just follows the status quo, the country is basically done in 50 years. The appetite for reform is high. My Korean friends disagree with the western received wisdom in one regard: they believe their country can still be saved. Here’s Jinsu:

Citizens have self-pride and hope in the fact that they drove out a bizarre government non-violently and established a new government. For this reason, the citizens of the Republic of Korea were nominated for the Nobel Peace Prize early this year. Also, I have hope in the fact that President Lee Jae-myung is a very capable administrator while being public-oriented, although he is not a perfect person. While Korean citizens have been steeped in rent-seeking for a long time, on the other hand, they are diligent and have a strong heart for the community. I think we can become a country that is an example of democracy and other countries, not just in terms of productivity but in terms of guaranteeing fundamental rights and distribution, and I want to work toward that. I hope we become a righteous country rather than just a wealthy country.

One of the chief causes of local hardships is incredibly high cost of living burdens on young working families, which LVT + UBI directly addresses. LVT attacks land speculation and boosts housing supply to address the housing shortage, while UBI directly addresses financial hardship. Formulating the UBI as a per person bonus rather than per adult (so that there is an explicit bonus for families with children) tilts the scale even further in the desired direction.

In short, there’s a ton of potential, the institutional ground has already been paved, the current president seems close to ideal and at the apex of his power, and everyone seems to agree that if South Korea does nothing, disaster is certain.

So where do we go from here?

South Korea’s Challenges

First, let’s take an honest look at the challenges South Korea is really up against, not only to properly grasp the urgency, but also so that nobody goes in halfcocked thinking this will be a cakewalk.

Upside-down property tax system

The effective holding tax on real estate South Korea is quite low—around 0.15%—which is lower than just about any city in the United States:

On the other hand, the real estate transfer tax (called “stamp duty” in some countries) is quite high, ranging between 1 and 4%. This is almost completely backwards and the opposite of what economists recommend. Whereas holding taxes on real estate are generally beneficial—and land value tax is the best—transfer taxes are about the worst kind of real estate tax, because they create perverse lock-in effects.

Life for the Average Korean

I asked my Korean researcher friends about daily life, material conditions, and working hours in South Korea right now. Here’s what Jinsu had to say:

40 hours a week (8*5) is the standard, but depending on the occupation, there are cases where people work a lot of overtime. Before the 90s, the ratio of dual-income couples was about 20%, but it has gradually increased to over 50%, and for the younger generation, it is over 60%. On average, they save about 8% of household income.

The wage gap is very large. With median income, life is tight [for a single-earner family]. Because the wage gap is so large, young people compete fiercely to go to good universities and get jobs at large corporations somehow, rather than developing their own aptitudes. Considerable rent-seeking and resulting social waste occur in jobs as well.

Many workplaces are concentrated near the capital, Seoul. To get good jobs, the population flocks to Seoul, where land prices are high. This creates a negative interaction that raises real estate prices again, and the concentration of jobs in the metropolitan area tends to become more severe. This is a problem, and currently, the Lee Jae-myung government is implementing strong local decentralization policies in response (e.g., Rural Basic Income, differentiating subsidies the further a region is from Seoul, etc.). All citizens and the government recognize that concentration in the metropolitan area is a problem.

He’s really not kidding about land prices in Seoul. See that giant red tower on the upper left? That’s Seoul. Notice how part of it goes off the top of the image.

If we go to another map Jinsu produced, landforall.kr, we can look at per parcel values:

(I don’t read Korean, but Google does, so forgive me for any mistakes I’m about to make here)

Gangnam Value

The text on the legend to the left says “Officially assessed land value (10,000 won/pyeong)”. Won is the Korean currency, and a pyeong is a unit of measure that Wikipedia tells me is equivalent to 3.3058 square meters. The parcels that line the streets of the Gangnam District are in the 100-200 million Won/pyeong range; that works out to $1,894-$3,789 USD/sqft, and that’s not even the top of the range. And that’s just land value.

If any of you are old enough to remember this massively popular music video and were wondering what the “Gangnam” in “Gangnam style” meant, just replace “Gangnam” in your mind with “Beverly Hills”:

For context, let’s compare that to this $8.35 million dollar empty lot in San Francisco I found on Redfin, which is listed for a measly $782 USD/sqft:

If you go further out in Seoul to the orange/yellow areas, the land prices are more like $95-$189/sqft, which sounds more reasonable at first (a 2,000 sqft empty lot would go for $190K-379K at those ranges), until you consider two things:

1. South Korea’s average salary is only 61% that of the USA

2. Official land prices lag; currently they are ~69% of market value

To properly guide your intuition, those two figures taken together mean that any figures I put in dollar terms should be further multiplied in your head by about 2.37X to get a rough sense of how expensive things actually are to the average Korean. How does the average Korean experience these sky-high prices?

House prices in Seoul are too expensive (they have risen steeply with some fluctuations over the last 10 years; while prices rose 20-30% over the past 10 years, Seoul house prices more than doubled). For a median-income household in Seoul to buy a median-priced house, they must save for 14 years without spending anything (as of 2024). Therefore, the perception that investing in real estate is the most reliable has spread among all ages. Newlywed couples often buy houses by taking out the maximum possible loans even if it is a stretch, instead of looking for monthly or ‘Jeonse’ (deposit-only) rental houses.

What’s Jeonse? Time to learn some fun Korean vocabulary words!

Jeonse and Yeong-kkeul

Jeonse is a system where instead of paying traditional lease rent as in most countries, you pay a large up front lump sum which can be as much as 80% of the total purchase price of the entire house, as a sort of deposit. Then, when you move out, you receive that entire value back. For those who can actually afford such an up-front payment this creates the illusion that the rental is sort of “free” in the long run—whereas what’s actually happening is that you are losing the time value of that money and surrendering it to your landlord, who invests the deposit and makes money off of the interest for the entire duration of your stay. When you leave and receive your deposit back, not only have you lost money due to inflation, you have also gone without all the interest that large amount of money could have earned you, which went to your landlord instead. As for those who can’t afford jeonse, they would be entirely locked out of those properties, unless they go to extreme lengths to borrow the necessary capital. Vitnarae Kang tells me that due to widespread scams related to Jeonse, more people are favoring conventional monthly contract rent, or simply attempting to buy their own house outright, if they can afford it. Here’s Jinsu again:

Consumption is also significantly shrinking due to repaying the principal and interest of loans. Most people agree that high house prices in the Seoul metropolitan area are a major factor in Korea’s extremely low birth rate. In the case of men, there is a large difference in marriage rates according to income levels. (The marriage rate of low-income men is significantly low).

The next term is Yeong-kkeul, literally, “to scrape together even one’s soul”, is a phenomenon in which you mobilize every single last resource you possibly have: emptying your savings account, taking out every loan you can, borrowing from your family, levering yourself to the complete hilt—in order to make a big purchase (typically real estate).

Vitnarae:

In particular, homeowners and those who own multiple properties utilize online real estate communities, such as Naver Cafes, to influence market analysis and public sentiment. Their aim is to promote excessive leveraging and the practice of “yeong-kkeul” (stretching one’s financial resources to the absolute limit to purchase real estate).

Jinsu:

The new word ‘Yeong-kkeul’—meaning pulling together even one’s soul—was created to mean gathering all available loans from family and banks to buy a house.

To the Moon

Another thing I noticed immediately from the map was just how concentrated land values were in the capital city relative to literally everywhere else. Jinsu explains:

The difference in house prices between Seoul and the provinces is large. The price-to-income ratio is over 10 for Seoul and under 5 for areas outside Seoul. In Korea, housing prices were at a low around 2012. After that, they rose very slowly, then rose very sharply from 2017, and rose particularly much during the COVID period. There was a significant adjustment at the end of 2022 as COVID was ending, but prices continued to rise centered on the metropolitan area due to the real estate stimulus policies of the conservative government in 2023.

(That’s the same government whose last president just got jailed for life for insurrection)

The expression “crazy” would be appropriate for real estate prices in the metropolitan area. Compared to 2012, real estate prices in the metropolitan area have tripled, while income has only increased 1.5 times. While most people think current real estate prices are not normal, they also have a psychology of FOMO and a psychology that real estate is the investment asset with the highest value and safety. The behavior of the past few years was that even the younger generation bought houses in Seoul by taking out massive debt (even taking the risk of reducing spending to pay back principal and interest) out of a psychology that they could never buy if they didn’t buy now.

Banks lend a lot of money through real estate mortgage loans. Although they regulate LTV and DTI, they are not very strong and change a lot according to the tastes of the administration. Since the inauguration of the Lee Jae-myung government in June 2025, there has been some strengthening of real estate policy regulations, but prices have continued to rise moderately. Recently, as the President has been speaking out strongly about strengthening real estate regulations for the past month, real estate prices in the most expensive areas of Seoul have begun to turn downward for the first time in a while. However, prices have not dropped much yet. Personally, I think it is a normal price if Seoul’s house prices drop by more than 30% from the current level.

President Lee — Georgist or not?

So the current president has made a lot of noise in the past about both UBI and LVT. Where did this guy come from, what does he stand for, and what is he saying now?

Jinsu (clearly a fan) says this:

Basically, Lee Jae-myung has and pursues values that resist privilege and consider the weak. While serving as the Mayor of Seongnam, he came out with a really strong Land Basic Income policy when he ran for the presidential primary in 2017. At this time, our Institute and related people had a lot of influence on the drafting of this policy, and Georgist activists, including myself, were quite excited. In the process of the Democratic Party primary, competing with candidate Moon Jae-in who was more popular, he proposed a policy to establish a National Land Holding Tax and distribute it as Basic Income (initially about 300,000 KRW per person per year) and once stated that everyone has an equal right to land. Unfortunately, he lost to Moon Jae-in in the primary. After that, he served as the Governor of Gyeonggi Province, the metropolitan local government surrounding Seoul. After President Moon, Lee Jae-myung went out as the candidate for the Democratic Party but narrowly lost to the conservative party candidate, Yoon Suk-yeol. Since President Yoon Suk-yeol resigned after serving only 3 years of his 5-year term due to impeachment for declaring illegal emergency martial law, Lee has been the President since June 2025.

Here’s where we’re at now:

Regarding real estate, President Lee is speaking in a less radical voice than during his days as a candidate 10 years ago. Recently, regarding real estate policy, he did make a statement that holding tax is the last resort, but he is making it clear that high real estate prices are a problem and earning money through real estate is not desirable. Recently, he showed his strong will to stabilize house prices by selling the house he had owned and lived in for 30 years. Also, he recently gave an instruction to exclude public officials who own multiple houses from drafting real estate-related policies.

President Lee Jae-myung gradually weakened his stance after proposing the strongest LVT policy (combined with Basic Income) in the 2017 presidential primary. However, Lee Jae-myung appears to be a very practical and strategic person rather than an idealist, and in some ways a “populist” (in a neutral sense). He is certainly a politician who pursues idealistic values. He clearly maintains the position that income generated as unearned income from real estate is not desirable and it is necessary to minimize it. However, his idea that holding taxes should be strengthened universally seems weak. As a politician, he seems to have a strong motivation to minimize the groups that lose out due to policy. On the other hand, regardless of political interests, he has stated several times that he will stabilize real estate prices (in the metropolitan area).

So how popular is this guy?

President Lee Jae-myung began to gain popularity with the public by being the first politician to raise his voice saying the President should be impeached during the large-scale mass protests against President Park Geun-hye’s corruption case in 2016. However, he was not popular enough to become the presidential candidate for the Democratic Party at that time. It has now been about 9 months since he started his presidential term, and his approval rating is rising as his term progresses. It is currently over 60%, and the reason people like him is that he is practical and capable.

I double-checked that figure, and as of today his approval rating is actually at 69%, a record high. Let’s see if he can keep it up.

He enjoys substantial debate and broadcasts most cabinet meetings live (for the first time in the history of the Republic of Korea). Although he did not do it intentionally, his mobile phone number is public, so he reads all the text messages people send and tries to continue communicating with people through X (Twitter). On the other hand, Korean media has a strong conservative tendency, so he actively uses his own social media as his own media. He is very skilled in diplomacy and his appearance of taking good care of his country’s interests is gaining significant support from the existing moderate and conservative classes. I think the factor of his popularity is that he conducts practical policies without being biased toward ideology. He shows a very strong side in persuading and debating opposing forces when he tries to implement policies for improvement. (In the past, he had an image like a fighter, but recently he has become a bit more of a soft image.)

So where do we go now?

The impeachment of President Yoon has given the current ruling Democratic Party very strong support and momentum. I think this is a good opportunity for the current President. Meanwhile, it is an important task to restore the order and the people (public office) planted by President Yoon Suk-yeol, and it seems to be going well. Many people want President Lee Jae-myung to serve as President for more than 5 years even by amending the Constitution, while on the other hand, there seems to be internal conflict for leadership within the ruling Democratic Party because the approval rating is high. Since there is a local election in June this year, I thought he wouldn’t bring up the holding tax before that, but it was a bit surprising that President Lee Jae-myung recently said that holding taxes can also be used. May 9 was the deadline for the end of the suspension of heavy taxation on capital gains tax. The suspension had been extended several times until now, but the President has been sending a strong message since the beginning of the year that he will absolutely not suspend it this time and will start the heavy taxation on capital gains for multi-home owners as planned. Therefore, Seoul house prices have stopped their long-term upward trend and begun to turn into a downward trend.

Ultimately we can only put so much faith in politicians, but I’m willing to be cautiously optimistic here. I think this is one of the best opportunities we’re going to see for a while, so anyone who cares about UBI and LVT and can help this initiative along in any possible way should seriously consider reaching out to allies in Korea.

What’s the Plan?

When we wrote our previous article on President Lee, it included this:

In [2022], one analysis found that an effective LVT of 1.1% would generate revenues of 80 trillion won (USD$58.5 billion), enough to fund an annual UBI of 3.6 million won ($2,600) per household (5% of current incomes). They found it would lower house prices, raise the net income of 85% of all households, and reduce every measure of income inequality².

Jinsu proposes that same UBI, but per person, not per household:

I expect that a Basic Income of about 300,000 KRW per person per month can be paid in Korea. (This is an amount of about 30 hours at Korea's hourly minimum wage). Tax improvements that are tax-neutral, such as lowering taxes on buildings and raising taxes on land (or reducing acquisition tax and raising holding tax), will also be necessary.

How likely is this to go through? Obviously a lot depends on how bold the president’s feeling, but from the looks of it he’s more than happy to keep pursuing UBI publicly, and that makes me optimistic for LVT, because there’s realistically few other ways to actually fund it.

But maybe we can help give him a nudge. I asked Jinsu what he hoped to achieve in the next year:

I want to create visualizations to show exactly who is reaping the most unearned income from land, where they are located, and how much people in specific areas are actually paying in property holding taxes (effective tax rates). Through this, I want to visually convey the unfair reality that a small minority is monopolizing land value.

Just put it on a map! That’s the spirit.

In 2024, we created a 2D bitmap land value map of South Korea for specific years (utilizing vectors at high zoom levels). [LARS: I believe this is landforall.kr] This year, I want to develop a 3D vector land value map that incorporates the past 30 years of officially assessed individual parcel prices provided by the government, enabling time-lapse animations. [LARS: the 3D maps of Korea in this blog post were produced by Jinsu]

Seizing the opportunities presented by a progressive presidency, I aim to propose a land tax combined with a universal basic income. This would ensure that everyone can practically share at least a portion of the land’s value, while also securing the stability of real estate prices.

At the institute level, I want to expand our communication channels and actively scale up the collection and curation of domestic and international trends in related research and activities, leveraging automation technologies.

Furthermore, as an institute, I want to continue building a repository of research reports on the real estate tax systems of various countries. I also want to contribute to academic journals.

I asked Jinsu what resources and help he needs to achieve his goals:

The operating finances of the Institute are not abundant, so becoming a supporting member of the Institute, even with a small amount, would be a great help to our stable activities. (This is the overseas sponsorship channel: https://ko-fi.com/landlibertykorea).

I wish there was a global newsletter that delivers research on land value and shared wealth from each country and news of activities (it might already exist and I just don’t know).

I’m not sure if this exists already either, but hopefully Progress & Poverty substack is quickly becoming just such a resource.

Here are some other things you can do to support this initiative:

• Share this article with any of your friends obsessed with UBI

• If you attend UBI events, tell everyone involved about South Korea’s UBI push

• If you attend mass appraisal events, tell everyone involved about South Korea’s land valuation system

• Download the South Korean land value datasets and build your own models. I think these are the sites:

  • https://www.data.go.kr

  • https://rt.molit.go.kr

• Reach out to folks like Jinsu and Vitnarae and ask them how you can help. I can connect you directly if you like, just email me at lars@landeconomics.org

And last but not least:

I ask for your prayers that Korea may become an exemplary country of distributive justice.

You’ve got it, brother 🙏. Godspeed!

We also have a proposed Land Value Return policy in Andalusia, Spain, a win in Cook County, Illinois (that’s where Chicago is), the winners of our fellowship, and more, all in today’s Landscape.

Expanding LVT Enabling Legislation in Virginia

On April 6th, Virginia Governor Abigail Spanberger signed HB 282 into law. The bill passed both chambers with overwhelming majorities, authorizing the cities of Charlottesville, Falls Church, Fredericksburg, and Newport News to voluntarily adopt a split-rate land value tax.

As we covered last month, Virginia has been on a slow march toward LVT for decades, adding cities to the authorized list one bill at a time. HB 282 adds four more, and the unanimous vote signals this is no longer a fringe idea in Richmond.

Now the question is implementation. In Charlottesville, there are local advocates and council members interested in acting on this new authority. In Falls Church, Councilmember Justine Underhill was making the case publicly before the ink was dry, arguing that soaring Northern Virginia land values need to translate into affordable housing, not just windfalls for landowners. Fredericksburg and Newport News each face their own version of the same challenge.

Kentucky: From interest to law in half a year

Kentucky’s HB 607 passed the state legislature in late March. The bill, which covers a much broader set of provisions related to local government of Republican priorities, contains a provision enabling metro governments to implement split-rate taxes in their urban service districts. Beshear vetoed the bill on April 13th, but the GOP supermajority overrode that veto on the 14th, and the measure has now become law.

When the bill first passed the House on its way to the Senate, Rolberto Roldan, a reporter at Louisville Public Media, caught hold of the idea. In his article, he spoke to local and national advocates (including myself), and one quote from a local Democrat councilwoman stuck out:

“We’ve gotten to a little bit of a breaking point where the people that live in the suburban areas of the city are saying, ‘We don’t want any more development. We’d like to see more development go downtown,’” Owen said. “So, I think this is one way to do that.”

We’ve previously highlighted folks who have spent decades building coalitions to successfully get land value taxes implemented, such as Josh Vincent in Pennsylvania and Dr. Dirk Löhr in Germany. Now, the next generation of LVT advocates is coming into its own.

Today we offer the story of Jackson Arnold, a local resident of Louisville, who deserves much of the credit for this recent local legislative win.

Jackson discovered LVT around 3 years ago, but was disheartened to learn that local implementation was blocked in most places. He later became, in his own words, “abundance-pilled” and joined an Abundance-focused national network which connected him to other members, including Louisville councilman Ben Reno-Weber.

He also found us, joined our OpenAVMKit Discord and started poking around avenues to implement and model land value taxes in Louisville. He faced two chief challenges:

• Non public property assessment data
  He gained access to the data through conversations with the city council who helped facilitate access.

• Local LVT not permitted
  He found a legal mechanism to enable it for Louisville and found interest among state representatives.

Later, Jackson spoke to state Republicans (Kentucky is a red state) and found a larger bill related to reforming the powers of local metro governments that could serve as a vehicle for LVT enablement.

The LVT provision became part of the bill which had pre-existing momentum to make it all the way through both houses of the state legislature with a large enough majority to overturn the governor’s veto. Now, LVT is enabled for Louisville’s Urban Service District.

Andalusia, Spain

In Andalusia, Spain, the Andalucistas coalition (led by Andalucía Por Sí) is running on a platform that includes what is effectively a land value tax, though they’ve branded it “FRUSA” to work within the constraints of Spanish national tax law, which reserves property tax authority to the national parliament. A Sectoral Coordinator for Discourse and Strategy for the party, Pablo Soria-Rojas, has been developing a housing policy funded by the FRUSA alongside a proposed tourist tax, positioning the package as a practical response to Andalusia’s housing crisis.

The connection runs deep historically: Blas Infante, the father of Andalusian nationalism who was killed during the Spanish Civil War, was heavily influenced by Henry George, and Progress and Poverty held pride of place among his personal library. With Andalusian regional elections now officially called for May 17 (moved up due to a corruption scandal), the Andalucistas are in active campaign mode, and Pablo recently published an opinion piece in a local Almería newspaper advocating for land-value-based housing policy.

We are excited to see these developments in Andalusia and hope to see more from other European countries in the future!

A Win in Cook County

Drake Warren, who appeared on our LVT Landscape Live event late last year, successfully won his seat for Cook County Commissioner of the tenth district. Illinois has been flirting with land value tax for the Chicago region, and this win helps build momentum to turn the interest into reality. (As an aside, the Cook County assessor’s office has been a leader in open source initiatives, and their repository was the direct inspiration for our own OpenAVMKit).

This year, there are other candidates across the country running for elected office with a platform that includes support for land value taxes. We plan to highlight those folks as campaign season progresses. Know any, or are you running for office yourself? Shoot me an email: greg@landeconomics.org.

Updates from the Center for Land Economics

Join Us at StrongTowns National Gathering

Lars and I will be at StrongTowns National Gathering, and we will be hosting a get together on Monday, May 18th at 5PM—right after registration and before the 7PM StrongTowns reception.

There will also be a LVT panel at StrongTowns sponsored by the Center for the Study of Economics featuring Lars Doucet, Josh Vincent, and Joe Minicozzi.

We will be joined by our friends at the Progress and Poverty Institute. If you are around and curious about land value taxation and getting it implemented, or just looking for a good conversation to start the weekend, join us!

RSVP HERE —> https://luma.com/piu2mmj9

Announcing the Land Economics Fellows

When we opened applications for the inaugural CLE Land Economics Fellowship, we were testing the hypothesis that there is a lot of untapped potential for high-impact research on land value return policies. After reviewing the applications, we were surprised by both the number and quality of applicants. Selecting just a handful was no easy task–a validation that our hunch was right.

We are thrilled to introduce our four fellows for this year. Each will produce original research investigating the role of land in our economy from a differing perspective.

Elle Griffin is the writer and publisher behind The Elysian and the author of the pamphlet Let Cities Build Utopia. Her fellowship work will examine best practices and cautionary lessons from new cities, community land trusts, and city-owned land initiatives, exploring how communities can successfully consolidate land ownership for the public good.

Dr. Brendan Long is a researcher at the University of Notre Dame Australia. His fellowship will focus on the Australian Capital Territory’s landmark implementation of land value taxation, one of the most significant real-world experiments in LVT policy, which has yet to be properly studied.

Dr. Yilin Hou is a professor at Syracuse University whose research has included building a comprehensive land valuation database for China. His fellowship will draw on that work to analyze land value data across China, offering what promises to be a rare empirical window into land economics at a national scale.

Henry Walther is a master’s candidate at MIT in City Planning and Real Estate Development, and a Housing Fellow at the Center for Public Enterprise. He previously served as Director of Policy and Data in the New Orleans Mayor’s Office. His fellowship research will examine the implicit “improvement penalty” that property taxes create, discouraging owners from protecting and upgrading buildings against disaster, as well as investigating what a shift to land value taxation could mean for New Orleans.

We are excited to see what this group produces this year, and we plan to run the fellowship again in 2027. If you’re interested in applying in the future, stay tuned.

More LVT Coverage

• Josie Faass, Executive Director of the Progress and Poverty Institute, has a fantastic Shelterforce piece arguing that property taxes aren’t the cause of our housing crisis but a solution to it. The piece includes quotes from many folks involved with LVT advocacy across the country, including me.

• Reed Schwartz, a former Niskanen Center intern and current Institute for Progress researcher, as well as a previous contributor to the Substack, did a deep dive published by Niskanen Center into Kauai’s experience with a split-rate tax system, and covering the modern need for land value tax.

• Speaking of think tanks and established support for LVT, Joe Gyourko, a renowned housing economist, makes the case that we should be taxing land much more than buildings in his Brookings Institution 35-page primer on addressing the housing shortage.

• Over in the UK, The UK Collaborative Centre for Housing Evidence published a large 139-page report titled “Who Should Own the Value of the Land?“ which seems quite holistic in its exploration of land value capture. My only regret is that I have not yet had the time to sit down and fully read it.

• Whitney McKnight, founder and publisher of The Edge in Berea, Kentucky, is interested in expanding LVT to other areas of Kentucky beyond just the metro councils. She published a piece which features an interview with me on the potential for land value tax shifts in Kentucky.

• TAPinto Princeton investigates land value tax in Princeton, NJ citing Progress and Poverty Institute’s study of a LVTShift in the city.

• Twin Cities covers land value tax as a method for St Paul, MN to encourage development. Minnesota currently has legislation being considered which would enable land value tax–which we have covered in past LVT Landscape articles on this Substack.

• A commentary piece in Cambodia made the case for using a land value tax to fund a guaranteed income in Cambodia.

• Rod Lockwood, a veteran Michigan real estate developer and Chairman of Lockwood Companies, makes the case for Belle Isle in Detroit to become a Special Opportunity Zone with a full land value tax implemented in order to spur economic growth in the region in a podcast conversation with the Mackinac Center. This proposal is as interesting as it is ambitious.

• Russell Richie, who recently became Director of Strategy and Impact at the Progress and Poverty Institute, wrote a commentary piece in Broad & Liberty pushing for land value tax in Philadelphia.

Greg Miller is the Co-Founder and Executive Director of the Center for Land Economics.

A particularly striking existence proof against this claim is South Korea, a country which not only regularly values all its land (and land values specifically, not just total property values), but which does so annually, and not based on broad regional bands, but down to the individual parcel, accounting for all sorts of hyper-local effects such as road frontage and locational premiums. Furthermore, the Koreans run a tight ship and get the whole operation done in five months flat, at least if official reports are to be believed.

These public land valuations are made freely available for all to inspect and download via public API. Because the land values are free for anyone to use, it’s easy to put them on an interactive web map. One such example is LandForAll.kr, a site produced by Korean researcher Jinsu Lee, which lets you explore per-parcel land valuations for the entire country:

The South Korean land valuation regime is of particular note in recent times because Land Value Tax is gaining momentum both in the US and abroad, and one of the most reliable pieces of pushback is concerns about technical and logistical hurdles.

A particularly salient example is the country of Wales, which under Cabinet Secretary for Finance and Welsh Language Mark Drakeford, recently published the results of an extensive research project on Land Value Tax's feasibility in that country, complete with a deep dive into Land Valuation methodologies. The work itself was farmed out to not one but six separate research groups, whose final reports can be found on this page. Their conclusions are mixed and mostly echo existing conventional wisdom, which can be fairly summarized thus:

• Market-based statistical valuation is the gold standard for total property values (land + improvement), but this method struggles with land valuation because vacant lot sales evidence is thin.

• Machine-learning algorithms have high predictive ability, but struggle when it comes to explainability, and are often seen by the public as mysterious “black boxes.”

• Formulaic area-based methods are a reliable method for tracking overall market values and are much simpler to administrate, but lack precision on a per-parcel basis and are sensitive to administrative assumptions.

These studies were neither blinkered nor provincial—they cited case studies from numerous countries throughout the world and thoroughly engaged with the available academic literature. Nevertheless, none seemed aware of the most relevant example of all, the South Korean system. The closest we got was one single mention in a report by Alma Economics, which buries the lede as follows:

In Korea, for instance, about 1,300 appraisers (2011 data) value sampled plots, with prices extrapolated to adjacent plots

One can hardly blame the Welsh researchers for overlooking the Korean system when I myself only learned of it a few months ago, and only because Korean researchers reached out to me directly. The chief reason I suspect both the Welsh researchers and I missed it is because despite having such an advanced land valuation system, South Korea’s effective tax rate on land is extremely low, and therefore it doesn’t turn up in searches for “countries with land value tax.”

However, now that we’ve found this fascinating example, it’s time to learn from it. My chief sources for this article are:

• 2025 Guidelines for the Survey and Assessment of Official Standard Land Prices and Appendix (in Korean)

• Act on the Public Announcement of Real Estate Prices [Act No. 17459, Enforced Dec. 10, 2020] (in Korean)

• Various Korean researchers I’m in touch with, especially Vitnarae Kang and Jinsu Lee

Mark Drakeford, if you’re reading this, consider this an unsolicited “mini” seventh technical report submitted to your initiative, courtesy of the Center for Land Economics.

How the Koreans Value Land

One big caveat before we proceed—I do not speak Korean, and am heavily relying on machine translation and Korean speaking friends. Any errors or omissions in this article are therefore mine alone.

Three things stand out about the Korean system:

• One special technique I’ve not seen anywhere else

• Otherwise, a reliance on completely standard mass appraisal practice

• A high degree of organizational competence and attention to detail

Korea’s “one special technique” is a particular focus on standard land parcels. Every year, MOLIT, the Korean Ministry of Land, Infrastructure, and Transport, identifies on the order of 500,000 “standard parcels” which serve as valuation anchors for all other parcels in the nation. For context, that’s about 1.6% of Korea’s 31 million total parcels. Each standard parcel is carefully selected to be the most representative parcel for a given area and land type. Nearby parcels of the same category are linked to the local standard parcel they have the most in common with, and valued in direct reference to it. This is called the “Standard Land Price System.”

There are two fundamental outputs of this system: a standard land table, which values each individual “standard parcel” at a specific KRW/square meter rate, as well as a set of adjustment tables which provide factors for every way local parcels can deviate from their referenced “standard parcel.”

Once these two products have been produced, valuing any given parcel’s land is fairly straightforward: apply adjustments for every difference in characteristic the subject parcel has from the standard parcel, then multiply the final rate by your subject parcel’s land size. It’s essentially a Land AVM, simplified to a set of consistent and predictable mechanical rules, calibrated from market evidence, updated on an annual basis.

Centralized or Decentralized? Why not both?

Although the system looks top-down at first glance, and it certainly benefits from strong centralization, it’s actually being simultaneously worked from top, bottom and the middle. Throughout the entire valuation process, MOLIT is in constant bidirectional communication with regional, municipal, and local government officials. While valuing each “standard” parcel is MOLIT’s job, valuing all the other parcels is the responsibility of local governments. This is a clever way to organize responsibilities in a reasonable and scalable way, with the national organizations doing what they do best—ensuring standardization, training, and structure—while local governments do what they do best—sharing and applying irreducible local knowledge of their hometowns.

There’s more to it than just that, though—MOLIT doesn’t do all the standard parcel valuation work itself. In fact, it’s more accurate to say that MOLIT organizes the national effort. The “standard parcel” appraisals themselves are actually performed by private licensed appraisal corporations, and crucially, the rules state that in all but exceptional cases each standard parcel must be valued by at least two different appraisal firms.

Furthermore, a special organization known as the Korea Real Estate Board (KRB) sits in the middle of the process, providing the basic infrastructure for the whole operation. First, the KRB, alongside MOLIT, is the co-author of the guidelines linked above. Second, the KRB provides the mandatory annual training that licensed appraisers must complete to be eligible to participate in the standard price system. Third, the KRB is responsible for all the IT, software, and databases used throughout. Fourth, the KRB is the central hub where a large multi-round national price balancing process occurs. This is where individual appraisers submit their results which are in turn reviewed during a national consultation meeting where failing valuations are flagged for review prior to finalization. Parallel to this, MOLIT separately conducts its own oversight, audit, and review. Finally, the KRB produces and distributes the Land Price Comparison Table, which local governments use alongside the Standard Parcel valuations to complete their local valuations.

Evaluation

How do we know if the South Korean land values are any good? Several mechanisms are in place to test the values against market data, and can best be understood in a western context as a mixture of “mass appraisal” and “fee appraisal” practices and standards. Valuations are checked against prices of recently sold properties, with the building component typically stripped out through conventional cost approach/depreciation estimates. A similar approach is done for properties valued on capitalized income, which are compared to comparable rental income and expense data. Additional statistical checks are made to check the overall uniformity of valuations for similarly located, similarly classified land, with the goal of ensuring that however any individual parcel is valued, it is valued in the same manner as those directly comparable to it. Beyond the basic statistical checks, there are provisions and checklists to ensure that each appraiser submits sufficient evidence and arrives at their valuations through proper approved procedures, with documentation every step of the way, and several rounds of audits.

This is just a high-level gloss, to get into more specifics would require more time (and more translation), but I’m eager to dig into the details (and run my own statistical tests) in a future article.

The Secret Sauce: Diligence & Data

Other than the standard parcel system and Korea’s enviable state capacity, there really isn’t anything in the described methods that you can’t find in any conventional appraisal textbook. They use the three approaches to value just like anybody else—the cost approach, the income approach, and the sales comparison approach. (If you don’t know what those are, I covered them in the first article I ever wrote about appraisal). They also employ hedonic regression, land residual extraction, paired sales analysis, and all the other conventional techniques.

One key advantage the Koreans have is far better datasets than the average anglosphere jurisdiction is used to. The only possible explanation for how the Koreans have achieved this is their mystical oriental powers, most especially a particular magic spell known as “passing a law.” Here’s how it works: a Korean wizard known as a “lawmaker” writes an incantation upon a sacred scroll known as a “bill,” speaks its True Name, such as “The Act on Real Estate Transaction Reporting”, and inscribes upon it a plea that all real estate transactions and their details be swiftly reported to the government. Then, poof! Whenever there’s a real estate transaction, the details are swiftly reported to the government! They don’t stop there, either—similar provisions provide for broad mandatory collection of rental lease information, and there’s also an official government survey which collects income and expenses from a sample of commercial properties, with penalties for refusal or false response.

Joking aside, the contrast with my own country is striking. Here in the US, there are twelve “real estate non-disclosure” states (including my own) where assessors do not have guaranteed access to sales transactions, yet these very same states insist assessors value property “at fair market value,” which is defined in reference to—you guessed it!—sales. And even in the other thirty-eight states, assessors tell me they sometimes struggle with data sparsity issues when it comes to valuing rental and commercial properties. Ironically, tying assessor’s hands doesn’t actually protect anyone’s privacy—that personal data is bought and sold freely on commercial sites like MLS, Costar, and RealPage anyways, often for the benefit of landlords.

Because Korea has access to sufficiently good data, it’s much easier to conduct any kind of property valuation, including land.

Limitations

The Korean system is not perfect, and one can quickly find domestic complaints and critiques of the system. One persistent critique is that historically, official land prices lagged the market to a significant degree. This paper from 2010 found the assessment ratio of land to be about 56%, that is, land was consistently undervalued by about half of prevailing market rates. Over the years that followed, there was an attempt to increase the assessment ratio closer to market value, however in 2023 the Yoon Seok-yeol administration moved to freeze rates and keep them at a lower assessment ratio (Yoon Seok-yeol would later be sentenced to life in prison for insurrection). The new president, Lee Jae-myung, has signaled intentions to raise valuations closer to market rates, targeting 90%, but has not yet done so, keeping the 69% realization rate for now while a five-year plan is being worked out.

Another important detail is that these land valuations play an important role in the real estate market, they have not yet been fully stress-tested as a tax base, because South Korea has no Land Value Tax, and as for the conventional Property Tax it does have, the effective rate is very low. For this reason, whatever level of accuracy and precision has been achieved so far probably sets a floor rather than a ceiling, as the imposition of higher fiscal stakes will demand even further scrutiny.

There are various other debates, critiques, and concerns that turned up in searches, but frankly, I’m not sufficiently well versed in Korean language or politics to give them a full and proper treatment in a short blog post like this, and will save such deep dives for future treatments, which I’ll perform in direct cooperation with Korean experts.

Limitations aside, I’m genuinely impressed. No other country I’ve seen has a system this thorough.

“Sure, but it won’t work here”

Okay, so what does this mean for countries like the US, or Wales?

Let’s briefly assume for the sake of argument that the Korean land valuation system is close to the ideal, and that a Land Value Tax levied upon such a tax base would actually have all the predicted beneficial effects. Even if that were the case, critics could still point out that their country just can’t muster the same state capacity as Korea. In fact, just such an argument was made by the Welsh researchers.

Aside from complaints about the technical and administrative difficulty of land valuations, other objections included the lack of a national cadastre, significant skill gaps in local government, complications created by Wales’ discretionary planning system, insufficient data gathering capabilities, and fundamental legal restrictions.

These objections were not one-offs and were echoed across the research groups, so I don’t want to minimize them. Nevertheless, a path can be paved to a future implementation if we’re willing to think outside the box a little and also willing to start with small, incremental reforms. A good place to start would be a regional pilot project centered on an urban area like Cardiff, much like ongoing local Land Value Return efforts we’ve been nurturing in the United States.

Let’s go over each major objection in turn.

Objection 1: We don’t have a cadastre!

South Korea has a highly centralized national government with exceptional data collection and organization, underpinned by a central land registry which encodes who owns what property, what’s built where, and who sold what to whom at what time. Wales doesn’t have that.

Even worse, the three functions that a cadastre usually represents—land ownership, parcel boundaries, and valuation—are spread across three other separate UK agencies: the Land Registry (which tracks ownership), the Ordnance Survey (which does mapping), and the Valuation Office Agency.

However, we can look at the stories of a few other countries to contextualize how big a limitation this really is. For one, plenty of countries have just taken the plunge and built out state capacity that used to be lacking. Consider Estonia, for instance. Formerly dismissed as a “Second World” country, Estonia is now considered to have one of the most advanced and efficient tax systems in the world (a system which includes a small Land Value Tax). There’s also been some fresh developments in Serbia, which has recently made major strides to modernize and revamp their property tax system. The lesson from these two countries is that the best time to get your valuation infrastructure in order is twenty years ago, but the second best time is today.

We could also consider another country which has many regions and cities with sophisticated property tax systems despite the country itself having no national cadastre whatsoever. Who could possibly think of doing something so bold and reckless?

“We don’t need no stinkin’ cadastres!”

Believe it or not, there is no official land register or cadastre in the USA, nor is there any single document that is sufficient by itself to legally prove ownership over any piece of land.

It’s true that various local agencies like county recorders and property tax assessors will maintain local databases that encode who claims to own this or that parcel, and local governments levy property taxes against those claims, and the system hums merrily along. From a strict legal perspective, however, nobody actually knows for sure who truly owns a particular piece of land until an exhaustive chain-of-title search is conducted which traces every property transfer from buyer to seller all the way back to a “terminal deed,” which declares the original parcel to be the unambiguous legal property of e.g. the King of Spain by right of conquest.

I’m absolutely not kidding about this:

In the US, you don’t really “own” land so much as “strongly claim” to own land in a probabilistic sense, with the ground truth only to be revealed with finality if and when someone digs up all the paperwork. This is why title insurance exists, in case you were wondering (or as Patrick McKenzie calls it, “The $4,000 insurance policy designed to never pay out”).

On top of this, the property databases that do exist in the United States are massively devolved—typically to the county level, sometimes below even that, and there are no universal rules or formats for how deeds and parcel records are maintained and digitized. Nevertheless, many1 American localities are still able to administer property tax systems admirably well.

From a purely technical perspective, you don’t need to wait for the stars to align just to stand up a local database, value property, and mail notices to particular addresses, even if external sources are the final source of truth, not you. There may very well be durable legal barriers that prevent this approach from taking root in Wales, but they should be properly understood as such: legal barriers, not technical ones; for whom the problem is “we need change the law,” not “we don’t know how.”

Look, if a bunch of wild yankee cowboys can pull this off, so can you.

Objection 2: Discretionary Planning System

Wales, like the rest of the UK, has a particularly illegible land use system, in which it’s almost impossible to know ahead of time what will be legally permitted to be built on a particular piece of property. Korea, by contrast, has an extremely legible system where any parcel’s legal uses are highly predictable. Wales’ system of land use permissions is a significant complication for implementing a reliable land valuation system.

To get the full picture, let’s compare various regimes against one another.

On one extreme we have the famous Japanese system of zoning, the statutory use district, which is fundamentally rule-based, highly centralized and standardized, and operates in terms of what is explicitly forbidden, rather than what is permitted. If it’s not forbidden, it’s permitted. (The Korean zoning system is close enough in broad strokes that the two can be considered variants of the same fundamental approach). This article from which the charts below are taken is a good explanation of the Japanese system:

North American zoning, often known as “Euclidean zoning,” is also a rule-based system, but is much more regionally fragmented with no single national standard. The other key difference is that it concerns what is explicitly permitted, rather than what is forbidden. If it’s not permitted, it’s forbidden:

The one saving grace of the North American zoning system is that although local zoning codes can be convoluted and ambiguous, at the very least you can rest assured that what you are and aren’t allowed to build is in fact codified somewhere, in some actually existing local ordinance that you could, in theory, make sense of.

On the opposite extreme is the UK system, or discretionary permission. Under this system, there is no development as-of-right, nor any clear and consistent zone-based rules that make it predictable what may or may not be built where. Instead, permission must be explicitly sought and explicitly approved on a per parcel, per project basis. This makes valuation on a “highest and best use” standard difficult when “highest and best use” can unpredictably change at the whims of a planning board.

The inherent uncertainty of whether planning permission will be granted surely distorts the property market, but property still actually trades hands and gets leased out, and therefore actual selling prices and rental values can still be observed. Some kind of valuation can still be performed in this environment, even if overall precision might be less than what can be accomplished in South Korea.

This is also another case where reforming the law might be a good idea, for reasons entirely apart from facilitating better valuations. Clearer rules of the road for what can and can’t be built will not just make the market more efficient, they would also remove incentives to corruption where local planning officials trade planning permission—and the subsequent uplift in land value—for backroom kickbacks.

Objection 3: Data Gathering Capabilities

Finally, we come to the issue of data gathering limitations.

Suffice it to say, I’ve spent a lot of time researching mass appraisal, I give presentations at assessor’s conferences alongside assessors, and I maintain an open source Automated Valuation Model library that’s being actively adopted in assessor’s offices. I am deeply familiar with the kinds of data that need to be collected in order to pull off a reasonably accurate and defensible land valuation system.

Here’s how any scrappy upstart jurisdiction, anywhere in the world, can collect the data they need.

Financial transactions

The heart of every mass appraisal system is sales and rents. Most valuation jurisdictions have sales, but ideally they should be gathering rental data from leases as well, and also income and expense reports from commercial properties.

What to get:

• Sale price (actual price the real estate transacted for)

• Sale date

• Parcel ID

• Sales validity metadata

• Whether there was a building on the site at time of sale

• “Frozen” parcel characteristics at time of sale

• For leases: price, date, terms, duration, etc.

How to get it:
If you have sovereign authority, pass laws that mandate the regular collection of these. If you don’t, get this information however you can; the private market has likely collected and organized it already, so there’s often the option of just buying it. If it’s not available (or the private market refuses to sell it to you), running a voluntary survey is better than nothing.

How to enrich it:
Sales must be validated before they can be used as either test evidence or predictive fodder for a regression model. Some sales don’t actually reflect the operation of the market, but instead represent data errors or e.g. non-arms length transactions between a father and son for massively reduced prices. Not only does OpenAVMKit include a module for dealing with this, we’ve also written a thorough article that goes through all the most common sales anomalies, how you can detect them, and what the proper validation procedures should be.

Parcel characteristics

These are the physical features of your parcels — what’s actually there on the ground.

What to get:

• Parcel shapefile (the geometry itself)

• Situs address (physical address of the parcel itself)

• Owner’s address (where to send the tax bill)

• Classification information:

  • Building type

  • Zoning/land use/permission, if known

• “The big five” characteristics2:

  • Land size

  • Building size

  • Building year built

  • Building quality (of materials and construction)

  • Building condition (e.g. amount of physical depreciation)

• Other characteristics:

  • # of bedrooms

  • # of bathrooms

  • # of units (for a multifamily or commercial property)

  • # of floors

How to get it:
Hopefully somebody already has digital parcel geometry for you somewhere. Even if you’re not the source of truth on that, you can always download and copy it for your own use.3 As for the other characteristics, you should be able to tap into your country’s postal system to figure out how to reach the person currently claiming to occupy that parcel, as well as its current situs address. The rest can be measured through mandatory disclosure at time of sale, with regular inspections every few years. However, here’s where modern tech can yield serious savings.

How to enrich it:
In the USA, many appraisal jurisdictions are contracted with vendors like EagleView and NearMap, who provide overhead and oblique aerial imagery, or CycloMedia and NCTech, who provide street-view images. If you have access to imagery like this, you can run open source commodity computer vision models on them to extract valuable characteristics. This lets you encode whether a parcel has a building or not, whether there is visible damage, how many corners the roof has, the presence of certain materials, and many other useful facts. These facts can then be fed through an objective rubric that generates standardized building quality and condition codes.

Additionally, there are many free data sources, such as Overture, which pre-process bulk aerial imagery into building footprints for you, which we used to great effect in our research in Baltimore to overcome local data limitations. Hooks for this functionality are already available for free in OpenAVMKit.

Locational Characteristics

These are factors that have everything to do with where a parcel is, what sorts of amenities it has access to, and generally everything related to location, location, location. They are often significant drivers of value in statistical models.

What to get:

• Street frontage

• Water frontage

• Views

• Topography / slope

• Proximity to various things:

  • Central business district

  • Parks

  • Schools

  • Golf courses

  • Etc.

How to get it:
You can do this the easy way or the hard way, and I strongly recommend the easy way. The hard way is to “pound the pavement” and send people out to observe all this stuff by hand. We really don’t need to do that anymore.

How to enrich it:
This is the easy way, and the best way. Use GIS tools to automatically calculate this stuff. In OpenAVMKit, we have a dedicated street frontage calculator that leverages Open Street Map data to meticulously calculate street frontage against every parcel at an extremely fine level of detail. We also have the ability to calculate proximity to any arbitrary shape file you provide, not to mention stamp parcels with zoning codes or district names. As for topography, if you have a Digital Elevation Model (which should be available for most countries), you can automatically calculate each individual parcel’s overall bumpiness and average slope. There’s even been a lot of research on calculating viewsheds directly from GIS data. We hope to have all these features available out of the box in OpenAVMKit soon.

Start Small + Do the Least You Can Do

We don’t need to overcomplicate this. Just start small, do the least you can do, and get the ball rolling from there. While a “national” LVT on the scale of an entire country sounds big at first, it’s not so bad when you realize that Wales is smaller than Maricopa County, Arizona, not only in terms of square miles, but also total population and GDP. (Incidentally, Maricopa County has an excellent property assessor’s office and I would be happy to introduce you to their staff).

For Wales, the best place to start is the capital city of Cardiff. Set up your own databases, collect, copy, beg, borrow, and buy what you need to fill up your tables, and enrich the rest using modern GIS techniques. Then, build up some basic valuation models—and please feel free to reach out to me if necessary, I’d be happy to connect you with all the relevant experts. You can (and should) do this well in advance of actually passing an LVT, because it will tell you what the likely effects would be.

Further, please understand that you don’t need to pull off something as sophisticated as South Korea’s models. A first principles analysis of the incentives shows that a much simpler regional approach, which we have dubbed “Least You Can Do” (LYCD) land valuation, will largely have the same beneficial effects as a “platonic land valuation.”

Then, put it on a map and start telling your story.

In conclusion, please enjoy this music video I found of the song “Soda Pop” from the hit movie KPop Demon Hunters, in Welsh:

It deserves more attention.

Why this matters

Baden-Württemberg isn’t a small pilot program or a single city trying something unusual. It’s one of Germany’s largest and most economically important states — home to Stuttgart, major manufacturing hubs, and a mix of dense urban areas, suburbs, and rural regions. In other words, it’s a real economy with real land markets. That makes it an important and interesting contemporary example of a land-based property tax in practice.

The federal decision

Germany’s property tax, the Grundsteuer (literally: ground + tax), was based on ancient property valuations; in West Germany, assessments dated back to 1964 and in parts of East Germany, they went back even further, to 1935. (This is also the experience of some counties in the United States, particularly those for which regular reassessments are not mandated).

Over time, this created obvious distortions. Two similar properties in the same city could face very different tax bills simply because one had been assessed more recently or because local markets had evolved differently since the last valuation.

Eventually, the issue made its way to Germany’s Federal Constitutional Court. In 2018, the court ruled the entire system unconstitutional. Not because property taxes themselves were a problem, but because the way they were calculated violated a core constitutional principle: equal treatment under the law.

The court forced lawmakers to fix the system. If two properties are similar in reality, they should be taxed similarly. A system built on decades-old values couldn’t meet that standard anymore. The mismatch between assessed values and actual market conditions had simply become too large.

What followed was a compromise. The federal government designed a new framework for the property tax which crucially allowed individual states to opt out and create their own models. This became known in Germany as Grundsteuerreform (literally: ground + tax + reform – compounding words should be more common in the US).

That decision opened the door for local experimentation.

The man who saw it coming

Long before Baden-Württemberg adopted a land value tax, Dr. Dirk Löhr was helping lay the groundwork for one.

Löhr is a Professor of Taxation at the Trier University of Applied Sciences and, by his own description, a Land Value Tax proponent. He doesn’t present himself as a political operator or activist. In conversation, he comes across as methodical and understated, even a bit reluctant to take credit. But over the past decade, he has been one of the central figures behind Germany’s land value tax push.

Dirk Löhr participated in a Henry George School of Social Science panel.

He is not the kind of academic who is content to sit back and write papers. In 2012, years before the Federal Constitutional Court forced Germany’s hand, Löhr co-founded—alongside Ulrich Kriese of NABU, a German nature conservation organization—Grundsteuer: Zeitgemäß! (”Property Tax: Contemporary!”), an initiative built specifically around the coming property tax fight. The name was deliberate: the campaign positioned land value taxation not as a radical idea, but as a sensible modernization whose time had arrived.

“We knew,” Löhr told me, “it is a question of time that the constitutional court will say [property tax valuations were] unconstitutional.”

When the court finally ruled the property taxes were unconstitutional in 2018, Löhr and his colleagues were ready.

From there, the campaign assembled an unusually broad coalition: environmental groups, tenant advocates, researchers, urban planners, and local officials. The point was not to build a narrow ideological camp. It was to show that taxing land more intelligently could appeal to very different constituencies for very different reasons.

“Land value tax is not something left or right,” Löhr said. “There are some people on the left who like it and some people who are more right who also like it. And these people you can bring together at one table.”

After the federal court decision, they worked everywhere trying to get land value taxes into all states. The message landed best in the German state of Baden-Württemberg.

Baden-Württemberg

Most states chose to stick fairly close to the federal model, updating property values but keeping the same basic structure intact. Property taxes as normal.

Baden-Württemberg took a different path.

The state is governed by a coalition of the Green Party and the conservative CDU, and the Greens were the decisive factor. The land value tax fit naturally with their priorities—not because Löhr is a Green Party partisan, but because the policy logic aligned: “The Green Party found it very appealing because the land value tax is a tax which gives an incentive to be careful with the scarce resource of land.”

The tax aligned with green goals around compact development and land efficiency in ways that a standard property tax reform simply didn’t.

Löhr is candid that political alignment was the hinge. “It was the Green Party in power there. [LVT] had the most sympathizers in the Green Party,” he says. When he looked at other states where the campaign also had support, the Greens were not strong enough to push it through. In Baden-Württemberg, they were.

The result: Baden-Württemberg opted out of the federal framework entirely. On January 1, 2025, the Grundsteuer there began taxing land value alone.

Löhr draws a broader lesson from the experience: in Germany at least, reform doesn’t magically come from within the political establishment. “From the political machine, from the political business, there comes nothing,” he told me. “You have to give pressure from outside.” The coalition he built was precisely that kind of outside pressure.

How the tax actually works — and what it charges

Germany calculates property taxes in a few steps, but the logic is straightforward once you break it down.

Start with the assessed value of the property, or for BW, the land.

That value is then multiplied by a small state-level rate called the Steuermesszahl (tax + measure + number). Think of this as a base tax rate set by the state.

Finally, municipalities apply their own multiplier, called the Hebesatz (lift + rate), which scales the tax up or down depending on the city.

So in simple terms:

Land value × state rate × local multiplier = final tax bill

Baden-Württemberg chose to tax land alone but built in one notable political accommodation: a split-rate structure. Housing land is taxed at a lower effective rate than commercial land. Löhr views this as an imperfect but necessary compromise.

“It should be the same rate,” he told me plainly. “But we have two rates. This was the condition, otherwise it would have been impossible to push it politically.”

In Baden-Württemberg, the state-level rate is very small by U.S. standards: about 0.13% of land value, reduced to about 0.091% for residential land. That number is then multiplied by the local Hebesatz.

In Stuttgart, the Hebesatz is 160%, meaning the base rate is multiplied by 1.6. That brings the effective tax rate to roughly:

• ~0.15% on residential land

• ~0.21% on non-residential land

These are very small effective tax rates compared to the United States. In many U.S. cities, total property tax rates are often 1% to 2% of total property value (land + buildings).

Assessments for tax purposes will be updated every seven years (though the public real estate assessment boards do their own independent valuations every two years). Löhr finds this maddening. He has personally asked the assessment boards why they bother with biennial valuations if they won’t flow through to tax bills for seven years, and has not received a satisfying answer.

For all its compromises, Baden-Württemberg represents a rare move toward land-based taxation. Most states, however, went in a different direction.

What if you taxed buildings more?

Bavaria decided to go in almost the opposite direction.

Rather than basing the tax on values at all, Bavaria adopted a pure area-based model: the tax is calculated according to the physical size of the land parcel and the building footprint, with no reference to market value whatsoever. A prime commercial site in central Munich and a field on the rural fringe pay on the same per-square-meter basis.

Löhr doesn’t hide his skepticism. “They only measure the size of the building and the land,” he explained about Bavaria’s system. “According to the size — no matter how old it is, no matter how valuable it is — they put the [same] tax on it.” From a Georgist perspective, this abandons the core logic of taxing land rent entirely.

The simultaneous parallel and differing paths chosen by German states is why Löhr, in a 2020 paper, calls the German experience a “living lab”.

What comes next: legal threats and political limits

The reform is not without its threats. Opponents, primarily real estate interests and a taxpayers’ association, have filed suits challenging the land value tax at both the state tax court and the federal tax court simultaneously. The plaintiffs’ argue against any method that involves valuation—even the federal model which they are also seeking to undo in other states.

Löhr, who has been tracking the case closely, has been called on to defend the reform’s methodology against hired experts brought in by the plaintiffs. A hearing is expected in autumn 2026.

The opponents preferred alternative is Bavaria’s area-based system: a flat tax on physical size with no reference to value whatsoever. It taxes property mainly by lot area plus building area/use, so a larger low-value parcel in rural areas can face a higher tax base than a smaller but much more valuable downtown property if the latter has less taxable area.

In reality, these are organizations with vested interests. They try to muddy the waters on any government regulations and taxes in order to protect the business interests they represent.

Even if the law survives the courts, the path to higher rates is constrained. German States control few taxes, mostly property and business. Most taxes are levied at the federal level, and states have limited access to federal tax levers like the value-added tax. Therefore, Baden-Württemberg does not have flexibility to lower other tax levies in exchange for raising the land value tax.

For now, the Green Party’s re-election in Baden-Württemberg’s most recent state elections means the reform is almost certainly safe for another four years. But expansion remains a harder fight than preservation.

The bigger picture

One of the world’s great skepticisms about land value taxation has always been political feasibility. Baden-Württemberg is a direct challenge to that skepticism. It required years of unglamorous coalition-building, a favorable constitutional moment, and the right political alignment in a single state. But it happened.

We will be watching what comes next in the courts, in the data, and in any other state or city that takes note. But none of that changes what has already been demonstrated. “If it is possible here… in sleepy Germany” Löhr says, “it should be possible anywhere.”

We are always looking to connect with folks who want to see LVT in their local area. Do you have leads on land value tax potential or want help with local efforts? Reach out greg@landeconomics.org.

Greg Miller is the Co-Founder and Executive Director of the Center for Land Economics.

For a brief moment a couple of weeks ago, lawmakers who rarely agree on anything found common ground when the Senate passed the 21st Century ROAD to Housing Act by an 89-10 margin (easy explainer of its provisions). The bill itself is mostly good, but one provision targeting build-to-rent housing is still causing a significant fight. Under Title IX, any investor owning 350 or more single-family homes would be required to sell newly built rental homes within seven years.

The logic is politically intuitive: Wall Street has become a villain in the housing story, and the provision polls well across both parties.

The provision targets the corporate form of the developer, not the underlying dynamic that produces the problem. The concern of build-to-rent development exists because America has a land crisis as public institutions have systematically failed to capture the value their own investments create, leaving private actors to step into the gap and extract it instead. Restricting who can hold that land doesn’t change the dynamic. It just changes who benefits from it.

The families who would have rented those homes still need to live somewhere. The land value created by growing metros keeps flowing to whoever holds the title, whether that’s a pension-backed Real Estate Investment Trust or a local speculator sitting on an empty lot.

Meanwhile, The debate the provision ignited was real.

Over 100 housing groups — including Pew, the Mortgage Bankers Association, and the National Apartment Association — have signed letters in support of the bill but against the Build-to-Rent (BTR) provision. The establishment viewpoint is that BTR is necessary additional supply at a time when we are dealing with a severe housing shortage.

Here’s my take: strip the BTR provision, pass the rest, and ask the harder question: why do large private firms keep doing a better job of coordinating land development than the public institutions that are supposed to be doing it?

What build-to-rent actually is

Build-to-rent communities are purpose-built single-family rental neighborhoods designed from the outset to be rented rather than sold. They typically involve multiple actors: a master developer who assembles significant parcels of land on the suburban fringe, entitles it, and builds out community infrastructure; a BTR operator who acquires a designated parcel within that master plan; and a contracted homebuilder who constructs the actual homes. Some developments are more integrated than others. The BTR operator then retains ownership of the entire parcel, collecting rents from families who want the single-family experience without the commitment of a mortgage.

As Matt Stoller documented in his piece on the homebuilder industry, large homebuilders like D.R. Horton have increasingly become land financiers more than builders — acquiring cheap land on the urban fringe, holding it while it appreciates, then hiring subcontractors to build on it. BTR operators take this one step further: rather than selling finished homes, they retain ownership indefinitely, capturing not just the development margin but all subsequent appreciation.

Why hold rather than sell? Two structural advantages make the model uniquely attractive to institutional investors. The first is diversification: a BTR firm owning homes across the Sun Belt carries risk spread across dozens of markets in a way no individual homeowner can match. The second is capital access. Since 2008, institutional investors have retained uninterrupted access to cheap debt markets that have effectively closed to middle-income buyers.

BTR currently accounts for somewhere between 3 and 10 percent of new single-family housing starts and has been one of the fastest-growing segments of new residential construction. The Pew Charitable Trusts estimated it adds between 70,000 and 130,000 homes annually to the housing supply. Industry groups argued, credibly, that the Senate’s seven-year disposal requirement would make the financial model unworkable.

None of that means BTR is above criticism. These firms are accumulating substantial wealth through land ownership, extracting rent from families who might prefer to own, and in some cases engaging in the kinds of fee-gouging and lease manipulation the FTC found at Invitation Homes. The moral discomfort is real. However, before we reflexively reach for the bonesaw, let’s understand what this symptom is telling us about the real disease it stems from – America’s land crisis.

The housing crisis is a land crisis

The deeper story here starts with something we’ve written about before: The Housing Crisis as a Land Crisis.

In most American cities, land near jobs, transit, and amenities is scarce and increasingly expensive. Zoning constrains what can be built on it. Infrastructure expansion is slow and politically contentious. When land values rise faster than wages, people’s incomes are extracted by high rents. And when land near the urban core is expensive and underbuilt, development pressure moves outward in search of cheaper land at the suburban fringe. This outward pressure is what generates most new housing supply in America today.

One of the reasons cities fail to develop their interior land — the vacant lots, the surface parking, the underutilized parcels next to transit stations — is that there’s no pressure on the owners of that land to do anything with it. Land sitting idle near a growing urban center appreciates in value simply because the city around it is growing. The landowner doesn’t need to build, doesn’t need to improve, doesn’t need to take any risk. They just wait, and the surrounding community’s investment in itself — in schools, transit, parks, public safety — flows into private land values as an unearned windfall. Development pressure then sprawls outward, not inward.

Conor Dougherty made this point compellingly–and controversially–in the New York Times: infill is slow, expensive, and politically blocked in most cities, while greenfield development on the edge offers scale and speed.

BTR in practice: the Cadence at Gateway example

This is a plot of land on the eastern fringe of Mesa, Arizona in 2018. It’s empty. Desert scrub, virtually worthless. But notice what’s right next to it: the Loop 202 San Tan Freeway and State Route 24, a major highway interchange built with public dollars that connected this previously remote corner of the East Valley to Phoenix’s employment corridors. That freeway didn’t just move traffic. It created land value. Suddenly this empty desert was thirty minutes from major employers, the Phoenix-Mesa Gateway Airport, Apple, Boeing, Intel. The land is now worth something, not because of anything the landowner did, but because the public built a road.

Harvard Investments and GTIS Partners foresaw that. In 2015 they announced plans for Cadence at Gateway, a 444-acre master-planned community on what had been the GM Desert Proving Grounds. Harvard and GTIS bought the land, did the planning and entitlement work, and built a community from scratch: 13 parks, 12 miles of trails, an 8-acre amenity hub with resort-style pools, fitness center, tennis courts, a café, and an event lawn, plus a new elementary school and retail at the main entrance. By 2020, Cadence had sold all 2,200 of its for-sale residential lots to national homebuilders — Lennar, Pulte, Toll Brothers, David Weekley, Maracay — at prices that reflected the community infrastructure already in place.

And then there is the small area highlighted in blue: Tricon Gateway, a 197-home build-to-rent community that GTIS developed inside the same master plan it co-owned, financed through a joint venture with the Arizona State Retirement System. The homes were built by a contracted homebuilder. Tricon Residential manages and owns every one of them. Tricon’s residents pay rent, use Cadence’s parks and trails, and walk to the same retail strip that Lennar and Toll Brothers buyers use. The BTR community is roughly 9% of the community’s residential units — a designated parcel within a larger master plan, not a standalone project.

This structure matters for the current policy debate. When Senator Warren’s provision requires investors to sell BTR homes within seven years, it doesn’t necessarily eliminate the housing on those parcels. In a community like Cadence, the master developer may simply sell that parcel to a homebuilder instead, who builds and sells individual units to buyers. Some of the backlash from housing advocates worried about supply may be overstated in that sense. Though, based on some anecdotal poking around Google, more recent build-to-rent projects appear to be more fully integrated (where the land owner and developer is the same as the house developer and landlord).

But Cadence also illustrates the deeper dynamic that produces BTR in the first place: the BTR operator benefits freely from surrounding public infrastructure they didn’t pay for, then captures the land value created within its perimeter indefinitely.

Thesis 1: BTR is a symptom of untaxed land rents — and so is SFH sprawl

The reason people hate BTR is not complicated: when a corporation owns a home and you rent it, the land value appreciation flows to the corporation. When you own the home yourself, it flows to you. The populist case against BTR is essentially an argument for widening access to asset ownership and keeping the housing wealth ladder accessible to more Americans. Everyone loves the housing ladder… as long as they get to climb it first. We have previously covered the contradictions for everyone excluded from it here:

Progress and Poverty

The Housing Ladder's Broken Promise

Last week, President Trump gave a speech at the World Economic Forum in Davos, where he said housing affordability stands in direct opposition to preserving the property values of existing homeowners (emphasis mine…

Read more

6 months ago · 63 likes · 25 comments · Lars Doucet

It’s worth asking a harder question. We have built an economy in which the primary mechanism for middle-class wealth accumulation is owning land. That is a fragile and inequitable foundation. It produces winners and losers based largely on when and where people were born. The question should not only be how we get more people onto the housing wealth ladder. It should also be why so much wealth is stored in land in the first place.

When land rents are untaxed, two things happen.

First, landowners near urban centers have no incentive to develop. They can hold indefinitely while the surrounding city creates value for them. Surface parking lots sit blocks from transit stations. Vacant lots remain vacant for decades. This is the predictable result of a system in which holding vacant land in a growing city is a lucrative and low-risk investment. Sprawl is not just a planning failure. It is a tax policy failure.

Second, developers who build at the fringe create new land value where none existed, and BTR operators are uniquely positioned to capture it. The Loop 202 freeway made Cadence possible. Mesa’s schools make it desirable. BTR developers capture the value of the public investment as well as the private land value improvements indefinitely.

Thesis 2: Private sprawl developers capture created land value, and cities should learn from them

What BTR operators are doing within their property lines is a narrow but genuine version of land-value coordination: they hold ownership long enough to capture the value their investment creates. That is exactly what cities chronically fail to do.

Cities invest in transit, roads, schools, and parks. Each investment creates land value for nearby private landowners, value the landowners didn’t earn and that cities recapture only partially, through property taxes that lag market values, overtax buildings, and undertax land. The result is that cities chronically under-invest in themselves while the gains flow to whoever holds land nearby.

The actor closest to doing what cities should do is the master developer: assembling land, building infrastructure, capturing the resulting value. But they capture it once and exit. From digging through examples of recent build-to-rent communities, it seems integrated projects are becoming more common: the same folks creating the roads and plots are the ones developing and renting the homes. They understand they can capture the land value indefinitely.

What cities should be doing is the same thing. A city that captured a meaningful share of the value its investments create could reinvest it in more infrastructure, which would create more value, which would fund more investment. The mechanism is well understood: land value taxation or long-term ground leases. The political will to use them aggressively is what is almost always missing.

Where that leaves us

The housing groups that signed the letter opposing the BTR provision aren’t doing it because they think America should be a nation of renters. They’re doing it because they understand that in our current land system, BTR is one of the few mechanisms actually building new supply at scale in places where housing demand is real and growing. Killing it without a replacement mechanism doesn’t solve the land problem. It just removes one of the few private actors stepping into the gap that public institutions have left.

That doesn’t make BTR above criticism. The wealth accumulation happening through privatized land ownership is real. Tricon’s 2021 SEC filing recorded hundreds of millions of dollars in fair value gains on rental properties, not from building or improving homes, but simply from owning land in markets where the housing shortage kept getting worse.

What would actually change the dynamics is changing how we treat land value in the first place: not as an untaxed private windfall, but as something that reflects the collective investment of the community around it and should be substantially recaptured to fund more of that investment. Cities that invest in themselves create land value. If they captured much more of that value, they could invest more, which would create more value, which would fund more investment. We would be focused more on developing in our urban cores where the value of land is treated as a public good.

The ROAD to Housing Act is a good bill. Strip the BTR provision and pass the rest.

Greg Miller is Co-Founder of the Center for Land Economics.

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The answer is over 100 times1. Land value in Manhattan literally towers above everything else:

Note that this comparison takes the assessed values at face value—New York real estate is widely known to be under-assessed in general. Nevertheless, the assessed land value of Manhattan is greater than all of the rest of New York City combined.

Okay, but maybe this is just New York City. Surely this is a unique pattern and we’d see something different elsewhere in the state?

Syracuse

Rochester

The absolute values are much lower, but the same basic pattern persists—the closer you get to the city center, the heart of economic activity, the more land values go exponential.

And in case we’re tired of New York state, let’s fly to the other side of the continent to Spokane, Washington. Here we see a less extreme ratio, but there’s still an unmistakable “towering fortress of land value” in the center of the city, not to mention a long thin wall of value marching north along the commercial corridor.

Spokane

Next, let’s hop over to middle America. Here in Cincinnati we see two clusters, both concentrated towards the Ohio river, with value gradients that quickly decay as you leave the city center(s).

Cincinnati

In these cities, you can reproduce the same 10x, 20x, even 100x difference in observed land value rates between the central and outlying areas.

I have two points I’m trying to make here:

1. People have wildly incorrect intuitions about where land value is concentrated

2. Putting values on a map is the best way to fix those misconceptions

This has been an essential part of our advocacy efforts at the Center for Land Economics, and it’s why we built CivicMapper, the tool which produced the above images:

Speaking of CivicMapper, we’ve recently added some great upgrades to it, which are already live on the CivicMapper.org site. We’ve also greatly expanded its open source companion tool, PutItOnAmap.com (PIOAM). We use these tools all the time, and thought we’d do a deep dive on them so others can take our tools and use them in their own work.

Altogether we have FIVE free tools to talk to you about today:

1. New & Improved Civic Mapper

2. PIOAM visualizer

3. PIOAM GIS Data Fetcher

4. PIOAM GIS Format Converter

5. PIOAM GIS File Constructer

Before we get into all that, a quick request:

Please help us keep building this stuff

Ever since we started, people have been asking us to add their city to Civic Mapper, to expand OpenAVMKit, and to build more GIS tools. We’re doing our absolute best to keep up, but the requests keep coming in and it’s expensive and time consuming to keep producing technology like this and also to pay the hosting fees. If you want us to keep pumping out a steady stream of great free software, please consider donating to the Center for Land Economics:

Now let’s get to the goodies, starting with new CivicMapper features.

CivicMapper

We recently relaunched the website so that it has an actual proper landing page, complete with silly interactive 3D gimmick (the blocks wiggle when you mouse over them):

Next, we’re now up to nine cities, and adding more as fast as we can manage. Our latest additions include Cincinnati, St. Paul, and New York City:

The sheer scale of New York City forced us to stop procrastinating and build an actual vector tiles pipeline, but now that we’re cleanly over that hump, we feel more confident in adding other large cities. Each city page is fed by a data pipeline that transforms public open data sources into our internal format, and the next big project is automating that process so we can rapidly add new cities in hours, not days.

Vacant & Underdeveloped Analysis

We’ve significantly improved the vacant land analysis feature, which should be available for every city on the site. Upon first load, you will see the main view of the city’s land values. Here’s St. Paul, Minnesota:

Scroll down and you get a filtered view. The parcels shown in this view are either vacant lots with no structures, lots specifically identified by the assessor as parking lots, and lots with very small structures relative to their overall land area. This is a great way to show elected officials how much development potential in the most valuable areas might be going to waste:

Click on the green “Explore Surface Parking Analysis” button and you will get a special analysis view, which specifically identifies surface parking lots.

Our pipeline fetches data from publicly available satellite imagery (NAIP), then processes it with an open source computer vision model that specializes in parking lot detection. We found it on HuggingFace, based on the excellent paper “A Pipeline and NIR-Enhanced Dataset for Parking Lot Segmentation”, by Qiam, Devunuri, and Lehe, 2024. This solves two problems:

1. Assessor data doesn’t always cleanly or consistently identify parking lots

2. Many large parking surfaces are technically portions of a larger commercial parcel with a small improvement on them, so naively looking at parcel-level land vs. improvement square footage can miss large parking surfaces.

We join the polygons the computer vision model identified as surface lots to our underlying assessor parcels, which lets us price how much land value is tied up in parking. You can zoom in and inspect each lot individually:

Just below that is a table of the top 20 parking lots ranked by total land value:

If you’re thinking, “Hey, that looks a lot like those maps from the Parking Reform Network!” you’d be absolutely right:

We were directly inspired by PRN, whose co-founder Tony Jordan is on our board of advisors here at the Center for Land Economics. Our hope is that these tools can benefit not just those of us interested in Land Value Return, but everybody in the greater urbanist movement—such as PRN!

That brings us to our second suite of tools, Put It On a Map (PIOAM).

Put It On A Map

It’s not just a slogan, it’s a website! PIOAM started as the same 3D visualization engine that Civic Mapper was built from, but has quickly evolved beyond that into our own in-house “GIS Swiss Army Knife” that we keep adding small standalone tools to. The entire suite is available free and open source under the permissive MIT License.

These tools solve common day to day GIS problems and work around some of the clunkier aspects of QGIS2 by just doing the exact thing we want.

The philosophy behind PIOAM is to do as much work as possible entirely locally in your own browser, with absolutely nothing sent to any servers that we control3. Not only do we not grab or store your data, we don’t want your data, because of the liability it would incur. PIOAM is just a standard productivity app that happens to run in a web browser, where all the actual logic runs on your own machine. For maximum control, nothing stops you from downloading the source code and running it entirely on your own computer or office intranet. Ask your IT person to take a look if you don’t believe us.

So far, PIOAM consists of four tools:

3D Parcel Explorer
This is the same 3D visualizer engine you’ve seen in Civic Mapper. It’s local-only and requires you to bring your own data, but it has more analysis tools.

Data Fetcher
What’s the point of fancy GIS tools if you don’t have any GIS data? If you know where your local government stores its open data, this lets you quickly and easily fetch that data straight from the source, then save it out to the same format our tools use.

GIS Format Converter
Got GIS data, but it’s in the wrong format? Never fear, just plop it into this tool, select your output format, and save the result.

GIS File Constructor
If you have two files, and you want to join them together, this will let you do that without requiring you to learn SQL or python. Just drag, drop, click, and export.

Tool #1: 3D Parcel Explorer

This is our big power tool. The interface opens by asking you upload a parquet file:

Once you’ve selected a file, a pop up asks you to identify key fields, and the computer will try to make educated guesses for you to classify them. You don’t have to do this, and you can change your choices later, but doing so will unlock extra features. You can also pick which fields to load to cut down on file size.

WARNING: large files can kill your memory, so try to stay lean, or create a file that only contains a subset of your large jurisdiction. In practice, unless you have a tiny jurisdiction we’ve found that the current version of this app works best for analyzing a subset (such as a few neighborhoods or one big market area at a time, or just your sales rather than every parcel in town). We’re working on ways to make it scale better.

Visualizing Something

Let’s reproduce the Civic Mapper visuals. In the “Layers” menu, under “Field to visualize”, I pick “assr_land_value,” which represents assessed land value in my file (your file will almost certainly have something different in it).

Once I do that, the map gets some color, and both menus change. Let’s look at what’s going on:

There are three sections to the “Layers” menu — the layers themselves up top, then “Field to visualize” and “Paint” below (clicking on the ▼ symbol will collapse/hide any sub menu). Lets go through each section one by one, starting from the top:

I have only one layer, and it’s currently visualizing “assr_land_value.” Then there is a special layer beneath it for the base map. The base map layer has two buttons — one to show the open street map view, and the other to show a satellite view. Clicking the eye for any layer will hide that layer entirely. Then there’s some additional buttons on the main layer widget itself, but we’ll save those for later.

Now let’s look at “Field to visualize.” Notice there’s a dropdown that says “as-is”, we have two other choices in there, “…per land size square feet” and “…per building size square feet.”

These latter two options are only available because of the field classifications we made at the beginning of the app (and yes, it supports metric units). These classifications can be changed at any time in the settings menu. For now let’s pick “…per land size square feet.”

Now our map looks like this, the colors represent assessed land value per land square foot:

That’s cool, but it’s not impressive. Let’s open the paint options:

Here we can change the color scheme, and how it decides how to distribute the gradient across the value range. We can also control the opacity of the map layer, which is useful when you’re working with multiple layers. I’m going to keep the default options, and click that fancy “3D enabled” box:

Whoa! What’s going on? What’s with those towering columns of land value? Is this jurisdiction giving Manhattan a run for its money?

No, this is the humble city of Petersburg, Virginia, which is not breaking world records for land value; there’s something fishy going on with the data. On the left side of the screen are all of our tools. Let’s select the third one down, with the question mark, that’s the “inspect tool.”

With that selected, let’s click on one of these anomalous parcels:

Whelp, there’s our problem. The assessor’s official land size for this parcel is a mere 251 square feet, which given the $2 million dollar land value would put it at a whopping $8,170/sqft, putting prime Manhattan real estate to shame. Clearly, this is misinterpreted data (maybe 251 is supposed to mean “acres?”). I need to use a different field.

I click “settings”, which spawns a new menu:

I go over here to “Data Sources” and click “classify…”

Then I change the land area field to “land_area_gis_sqft” instead:

I do that, close the menu, then go back to the “Layers” menu, and re-select “as-is” then “…per land size” to reset the visualization. Boom, now things look less insane:

This is a much more intelligible map of land values, with the typical pattern I’ve seen in all the other cities. With a little bit of cleanup, I could produce a nice presentation-worthy screenshot of Petersburg City, Virginia (or any other city for that matter).

NOTE: You can’t yet save, host, or send shareable online links to the maps you make with PIOAM’s visualizer yet— but you can at least make screenshots. We’ll build out more features soon.

Going back to our visualization, I notice a few super-tall “pencil” anomalies with extremely skinny bases that I don’t think reflect true reality. This is actually another thing the app is useful for—on a flat map, these outlier parcels are much harder to notice. They can also easily hide in a spreadsheet or database, but on a 3D map, they become super obvious. So much data cleaning work comes down to just narrowing down which parcels are likely to have issues, so this is another tool for quickly locating those.

If you get tired of the 3D view and want to go back to a regular top-down map, do this:

• In “Layers” / “Paint”, uncheck the “Enable 3D” checkbox

• In “Settings” / “View Presets”, click the “Top” preset to flatten the camera perspective:

Now that we’ve got our basic visualization task done, let’s revisit those little buttons in the layers menu:

Statistics

Let’s click on the three bars first. This launches the “Statistics” menu for that layer:

From here I can analyze any of my numeric fields, and, just as in the visualizer, view that as-is, or denominated per land area or per building area. I get a readout of all the usual summary statistics, as well as percentiles and a visual histogram, complete with configurable overflow and underflow buckets.

Note also these buttons on top, which controls what parcels are in the selection driving the statistics:

• All: every parcel in this layer

• Visible: every parcel that’s not currently hidden

• Selected: every parcel selected on the map

• Group: pick a field and value(s)

To give you an idea of how powerful these tools are, let’s go through a couple workflows. First, let’s select by visibility. I’m going to the layers menu and selecting “property use” as the layer visualization. This is a categorical field, so it just assigns a unique random color per category.

After a little panel rearrangement, I have this:

See these little eye buttons in the Legend? They let me show/hide the corresponding category on the map.

If I hide everything except “101 Urban Residential Improved”, and then pick “Visible” as my selector within “Statistics”, the numbers and graph update in real time to correspond to what is visible on the map:

If I show a few more categories, both the map and the statistics change again, instantly:

You can also look at statistics by group, and this is one of my favorite methods. Pick a field, and then pick a value. Here I’ve picked “property_use,” then “101 Urban Residential Improved.”

I can click “Select on map” to highlight all those parcels, but what I really love to do is to just select the second dropdown and hit the “down” arrow on my keyboard and move through each category, instantly seeing the statistics update:

But what if I’m only interested in one particular area? That’s where “Selected” comes in handy.

Let me select a few parcels in one particular neighborhood. For that I go to my selection tool. If I click and hold on the select tool, I get several options:

Let’s pick the “Polygon” tool and grab some parcels:

Clicking on the same point I started at completes the selection, with a handy circle showing up to give me visual feedback:

Now some parcels on the map are selected, highlighted here in green. The selection controls pop up to tell me what I’ve got selected and provide me a handy button to unselect them.

If I change my Statistics selector to “Selected,” then these specific 306 parcels highlighted in green will drive the statistics for me. As you can see in the statistics panel, the land values are clustered in a tight range, absent a few outliers.

ASIDE: Selection Tools are Super Important

Humor me for a minute while I go off on a rant about selection tools.

Whenever you’re doing GIS operations, being able to precisely and quickly select the parcels you want, and deselect the parcels you don’t want, can make the difference between a workflow that takes seconds and a workflow that takes minutes or even hours. I’ve spent a lot of time dialing in the selection tools for PIOAM with the aim of making it my own personal “Photoshop for GIS.” Here’s a list of particular things I’ve added to make my life easier.

First, four selection modes:

• Point (click one thing at a time)

• Rectangle (click and drag a box)

• Lasso (click and drag to draw a loop)

• Polygon (click sequential points one by one, then close)

Additionally, all of these tools support both additive and subtractive selection, so you can quickly use them together to craft complex selections. If you press and hold ALT as you select, the selector will turn red and signify that you are removing parcels from your current selection:

Meanwhile, pressing and holding SHIFT as you select will add parcels to your selection.

Another thing that has always bugged me about QGIS is that selected parcels are always yellow, which can be troublesome if you use yellow in your underlying map layer colors, and I never figured out how to change that. In PIOAM, the “Selection Controls” menu opens whenever you select something, and it lets you change the selection color as needed:

Scatter Plots

Going back to the layers menu, let’s click on the button right next to “Statistics,” which is “Scatterplot.”

Unsurprisingly, this generates a scatterplot. It has the same basic “selector” interface as the “Statistics” menu, but instead of statistics it draws an X vs. Y graph. You define which fields represent X and Y, and also what subset of your data you want to plot.

It’s usually best to narrow your focus to one kind of thing at a time, so let’s look at “101 Urban Residential Improved” again:

So far, so typical. You can stick some things on a map, you can paint them with pretty colors, you can select some things, and you can look at the same bog standard summary stats that anyone with a Power BI dashboard could also cook up in five minutes. What else can this tool do?

Two particularly useful mass appraisal tasks, namely:

1. Generating time adjustments

2. Finding and displaying “comps”

Time Adjustments

Generating time adjustments is an essential task for any assessor or mass appraisal specialist (for a refresher on this basic topic, see this section of our previous article).

In a nutshell, the market moves over time, and the same property might sell for significantly more or less in January than it would have the previous July. Therefore, when we estimate “market value,” we estimate that value as of a specific date, typically January 1st. That means if we’re going to take several years of sale prices and feed them into a regression model or any other prediction algorithm, we will want to “time-adjust” the prices first, so that we not only account for observed market trends over time, but also yield predictions calibrated for the valuation date.

There’s several methods for doing this, which we implement for you in PIOAM’s time adjustment tool. Here’s how.

First, we need to upload some sales. So far, we’ve only been playing with “parcel universe” data — the actual parcel characteristics, but lacking any transaction data. Fortunately we can add new data, such as sales, anytime. We click “Layers” to bring back that menu:

Then we click “Add layer”, and “Browse for file…”

I grab my sales transaction file, which includes sale prices, sale dates, and property characteristics as of the date of sale. The menu tries to auto-detect the essential fields, and finds them. However, this time it also finds sale data, which the “parcel universe” file didn’t have:

I load in the new sales file, and it’s automatically added as an additional layer to my map, defaulting to gray, overlaying my parcel universe (the random colors):

I’m going to hide the underlying universe layer for now and set the sales layer visualization to “sale price per built square foot,” then I’ll enable 3D, just for fun:

Now, let’s do some time adjustment. I click on the time adjustment tool…

…and, it’s already calculated as soon as I open the menu. That was fast!

Let’s zoom in on that graph and explain what’s going on here, then I’ll explain all the fiddly bits in the menu. First, let’s hide everything but the graph:

Each gray dot is a sale. The vertical position is the price divided by the (built) square footage—therefore, this is only a graph of improved property sales, and in case there was any doubt, the little dropdown labeled “mode: Improved” makes that clear. If you have enough samples you can also analyze vacant land sales the same way, in which case it will use land area as the denominator.

The horizontal position is the time of the sale. The gray dots are partially transparent, so when more sales happen at a particular time and price range, the darker that group of dots will appear as they stack up. The blue line is the time trendline that forms the basis for our “time adjustment.” In January 2020, the median price/sqft was $88.12, and in September 2025, it was $141.60, a more than 60% increase.

At the bottom of the menu we have two buttons — one to download as CSV, and one as Excel:

Those will generate spreadsheets that look like this:

Multiplying a sale price by the “correction_factor” for its time period will bring it up to the same price level of the final time period, while “start_indexed” and “end_indexed” provide you with numbers that make for nice looking charts, comparing price levels at different times in percentage terms relative to either the first or last time period in your series.

With no grouping, we are lumping all our property together, which isn’t super useful. We should zoom in to a specific category, like “101 Urban Residential Improved” for a more specific time adjustment:

Next, note the “sampling” dropdown. If we have a ton of data, we can create fine-grained monthly time adjustments which capture inter-year seasonality effects, but as our sales get sparser we should be more conservative, and reduce overall noise by chunking by quarter or even by year:

We also have a special “peak” method, which samples the beginning and end of each year, with a floating midpoint in between, which is often called as a “spline” in this context. This particular method is based directly on an approach described by the Florida Department of Revenue’s time adjustment training materials for local assessors4.

Additionally, median sampling isn’t the only choice. You can also pick “mean” (average), as well as “regression.” The latter will do an ordinary least squares regression using dummy variables for each time period as your independent variables, against log sale price per unit area as your dependent variable (this method is also based directly on the method described in the Florida DOR time adjustment training materials).

If you want to go further, or if you want to dial in the settings to comport with local standards, you can specify inclusion and exclusion filter criteria, specify a custom start and end date, set outlier exclusion rules, and impose a minimum sales threshold for time period sampling:

We hope this tool will be flexible enough to accommodate whatever the local jurisdiction’s standards are. If yours needs something different, don’t hesitate to reach out and we’ll add it in!

Let’s move on to the comp-finder.

Comp-Finder

This is the second big feature that’s core to a lot of mass appraisal workflows. You invoke it by clicking on the “Comp Finder” tool on the left toolbar. This invokes the “Comp Finder” menu, which is blank until you click on a parcel.

With the comp finder tool selected, I select a parcel on the map. Now it looks like this:

The “subject” parcel is the one I want to find comparable matches against, and it’s marked with a yellow pin. The marked radius represents my search distance, but if I want I can tell it to only find comps within a manual selection of parcels, too. Note that I can also change which layer I’m looking for comps on. Right now I’m looking for comparable sales, so I’m targeting the sales layer, but there’s no reason I couldn’t just look for physically similar properties by targeting the universe layer.

The most important part is the criteria section:

These fields define what counts as a comp. A few defaults are picked for me based on building size, land size, building age, and property use, which I can either disable or remove if I don’t like. I can also add new criteria. For numeric criteria, I can define distance in terms of absolute value (+/- 500 square feet) or in terms of relative value (+/- 10%). Once I’m satisfied, I click “find comps,” and all my matches show up on the map, and in the panel below.

The comps are listed below in a “Comp Grid,” which shows the parcel key and address, along with the matching criteria relative to the subject. I can also add a new field to the grid if I want more information. New fields added this way won’t drive comp matches, but they will show me how the comps differ from the subject.

In this case I can see that the first three comps are all 68 square feet larger than the subject, with small differences in land size, and all but one are the exact same age. The buttons at the bottom let me export this comp grid to a spreadsheet.

In the future we plan to add the ability to add priced “adjustments” to comp grids, so that they can be used as visual aids in in property tax protest hearings—not just by the appellant, but also the assessor!

When both sides have the best possible tools, we can feel much more confident about the quality of our property tax valuations.

Future Work

…and that’s about it for the Put It On A Map visualizer. There’s a few other features in there that we haven’t covered, like the ability to edit fields, and a very clunky export function that’s honestly nowhere near ready yet, but we’re steadily working on improving this over time in partnership with real assessors in the field.

The main thing we want to add next (beyond feature upgrades and some overdue bugfixes) is a desktop and/or hosted database-backed version that anyone can deploy themselves easily. That’s a pretty big lift, so if you find this tool interesting and want to see it more widely developed and deployed, please donate to the Center for Land Economics.

Tool #2: Data Fetcher

What, did you think we were done? We still have three more goodies to show you today! Next on the list is the GIS Data Fetcher.

Having a fancy schmancy GIS visualizer app is of no use if you don’t have any data. Where can you get some data? From local government open data portals, that’s where!

All you have to do is find an ArcGIS server endpoint with the data you want, paste it into the bar on this page, and hit load!

Um… what’s an “ArcGIS server endpoint?”

What’s that, you have no idea what I’m talking about?

Fear not, I’ll explain. By the time I’m done with you, you’re going to be the coolest person in the office and everyone will think you are a magical wizard. Here’s how to find free, public data provided from a local government near you.

Step 1: go to your favorite search engine and type: “<name of location> open data portal”

If your jurisdiction is cool, one of the first few hits will be something like this:

Step 2: Ignore all the official search tools and make a beeline for the first thing that looks like an interactive web map.

It doesn’t really matter which interactive map you click on, because they all tend to be hooked in to the same underlying data sources. Ideally you’ll find a parcel map, but even if you can only find a map of school district boundaries or something, that should work too. Just find any interactive web map:

Step 3: Find the ArcGIS server endpoint

Now for the magic. With the interactive map open, hit F12 on your keyboard. You should see something like this pop up at the bottom, find the tab that says “Network” and click it:

What you’re looking at is a list of network requests. Let me explain what this means, because although it looks complicated, what’s going on is actually pretty simple.

When your browser loads a page, what usually happens is it first tries to load a basic page as quickly as possible so that the user doesn’t think the page is frozen, and then asks the server for additional content to fill in, putting in little spinners and loading bars until the whole page is ready. Each request for more information from the backend database shows up in the bottom panel here. That means if you know where to look, you can find the exact address of the server that’s feeding the map as you click around, and you can download data from directly from that server using our tool. All you need is the server’s name.

Next step: with the network requests panel open, and your eyes on the map, refresh the page. This way you’ll see all the requests, including the ones that happened before you opened the panel.

For good measure, zoom all the way in on a detailed part of the map or click on some things to try to get it to load more information, until the panel fills up. Next step is to filter the list down, because it can get literally hundreds of items. Find this section at the top and click “Fetch/XHR”, this will remove a bunch of irrelevant stuff like loaded images and other stuff we don’t care about:

There’s still a lot of stuff left, but don’t worry, I’ll guide you. What we’re looking for specifically are ArcGIS server endpoints.

ArcGIS server is a specific piece of software produced by ESRI, which powers the backend for approximately all of the online web maps like this one.

We’re specifically looking for URL’s that have “query” in the title, and especially “arcgis” or “gis.” The pattern can vary, so also look for “rest/services” and “MapServer.” The server won’t always be obvious from the data in the “Name” field alone, you’ll have to look at “Request Url” on the other side, but if you click on enough entries you will eventually find a likely candidate, like this:

This is what we want. Go over to the right panel where it says “Request URL”, and copy that whole field:

Here’s the endpoint for this jurisdiction:

https://maps2.dcgis.dc.gov/dcgis/rest/services/DCGIS_DATA/DC_Basemap/MapServer/tile/9/92/165

We’re going to strip off everything after “MapServer”:

https://maps2.dcgis.dc.gov/dcgis/rest/services/DCGIS_DATA/DC_Basemap/MapServer

Now we simply stick that server endpoint into our Data Fetcher.

NOTE: in case you were wondering, you are not doing any elite hacking here (sorry to disappoint you). You are requesting publicly provided information that is being freely broadcasted by a local government, that was already being downloaded to your computer every time you interacted with one of their maps. If they were trying to restrict you, they would require a password with the request.

Click load, and bam! We can now download any or all of these layers, and export them directly as GIS-ready files:

Of course, this particular layer isn’t all that useful. It’s just literally one polygon, the boundaries of Washington DC. However, we have another trick up our sleeves. Let’s look at that URL again:

https://maps2.dcgis.dc.gov/dcgis/rest/services/DCGIS_DATA/DC_Basemap/MapServer

There’s probably more data here, we’re just in one of many subdirectories. If we back up to the end of “services” I’m sure we’ll find the root menu:

https://maps2.dcgis.dc.gov/dcgis/rest/services

Let’s try it:

Sure enough! Here’s all the data:

Each of these has its own expandable category. Folders/DCGIS_Apps/PropertyQuest (MapServer)/Layers/Lots/ seems pretty interesting:

We can check as many as we like, and then, before we commit to downloading them all (which could be quite large), we click “preview layers” to see what we’re getting: