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Communities leak land value via mortgages and absentee owners. Hence they can’t afford green ways. Some towns quit leaking by taxing land.


Description

Summary / Résumé

Presently, a community's land values leave via mortgages absentee owners. Yet it is the very presence of the community that generates the value of locations. Then, having lost the values they created, communities have a harder time affording investments in new ideas for sustainable use of their local ecosystem. Furthermore, local governments lose a potential tax base. And residents lose circulation of currency, shrinking the local economy, while condemning some to poverty.

 

Fortunately, some towns have plugged the leakage of rents, keeping such spending recirculating within the local economy. What’s the mechanism? They tax land, a tool in the fiscal toolbox. Other tools are available, like land dues. Also, the agency need not be local government but could be a trust, as in Alaska. Whatever the implementation, it has worked where tried.

 

Residents of prosperous, successful communities tend to feel pride, beautify their surroundings, recycle used goods, engage in local causes, and in general are receptive to and advocates of policies and technologies that sustain communities and ecosystems.


What actions do you propose? / Quelles actions proposez-vous?

Existing groups and/or a new group would compose a dog-and-pony show to raise public awareness. Many experts would happily participate. Many idealists have the computer skills to create a captivating show. Other proponents have marketing skills. Other advocates excel at arranging presentations to other groups, schools, businesses, and government leaders. Others can win celebrity support and fundraise. Here the science of social change comes in handy.


Which types of stakeholders are involved, in which way? / Quels types de parties prenantes sont impliqués, de quelle façon?

While are residents are effected, it takes a certain personality type to get involved and stay committed. They know who they are--the usual suspects. Within activist groups, various members gravitate to various tasks.


How could the actions be scaled up at the neighborhood or city level? / Comment serait-il possible d'augmenter la portée des actions à l'échelle des quartiers ou de la ville?

Actually, these proposed actions to institute public recovery of rents probably can not be scaled down below the city level. Indeed, regional would be even better.


What impact will these actions have on reducing greenhouse gas emissions and adapting to climate change? / Quels impacts auront ces actions sur la réduction des émissions de gaz à effet de serre et l'adaptation aux changements climatiques?

By recovering land value, the community makes speculation in land no longer remunerative. Instead, owners develop vacant lots. That creates opportunity to try new, green ideas. It also infills the city. Shorter trip distances reduce pollution and also makes alternatives to driving cars more feasible. And if at the same time the jurisdiction eliminates taxes on improvements, then developers incur no penalty for investing in efficiency whose upfront cost may be higher.


What are the other environmental, economic or social benefits? / Quels sont les autres bénéfices environnementaux, économiques et sociaux?

Stimulating infill creates efficient land use, region-wide. On that basis, the local economy cuts both fuel consumption and pollution of exhaust, rubber runoff (from tires), etc. Economically, cities afflicted with more vacant lots have more unemployment, while those with efficient use of prime sites enjoy more prosperity. Socially, the income gap is closed, enabling residents to feel happier.


What are the most innovative aspects and main strengths of this approach? / Quels sont les aspects novateurs et les principales forces de cette approche?

The most innovative aspect is that the public recovery of land value allows a city to fund things like a dividend or a housing voucher or public housing, as does Aspen CO. The main strength of this approach is that it is fundamental. Rather than address symptoms, it addresses the entire system. When one thing goes wrong, look for a superficial cause. When many things go wrong, look for a root cause. The leakage of land value from the society creating them causes or worsens alienation from nature, joblessness and material insecurity, widens inequality to the point where rentiers feel detached from community, and encourages government to adopt mere palliatives.


What are the proposal’s projected costs? / Quels sont les coûts projetés de la proposition?

The cost of raising public awareness is peanuts, just a couple thousand to begin city-wide.


What are the potential challenges or obstacles? / Quels sont les défis ou les obstacles potentiels?

The challenge is the same for all big ideas--too big for people to make all the connections. The challenge is that people feel ownership of land entitles one to the community-generated rent, too. Hence, the dividend is a necessary component of the proposal, so everyone comes out a winner.


About the authors / À propos des auteur(e)s

Did original research for Portland’s Tri-Met, a regional government in Minnesota, and a public economist in Virginia, Nic Tideman. Authored reports to the Kenya Land Commission, the legislatures of Costa Rica, Hawaii, and Washington. Published in the academic press and at TruthOut. Edited The Progress Report and The Geonomist , winner of a California Greenlight Award. Has ghost-written letters under the letterhead of Oregon Rep. Jackie Dingfelder. Testified before the Russian Duma; briefed Fan Sun-Lu, future VP of Taiwan; explained geobonds to Latin American officials, and initiated the introduction of a bill to shift the property tax from buildings to land in Oregon. Coined “Citizen’s Dividend”. Utilizing his neologism “geonomics” have been the Geonomics Show on CNBC and the Geonomics Institute in Middlebury College. Recruited economists from Columbia, the OMB, and a US presidential commission. Co-founded the US Green Party. Member—US Society for Ecological Economics and Mensa.


References / Références

Jeffery J. Smith

President, Forum on Geonomics

Member, International Society for Ecological Economics

 

 

Publications by Academia (and a few others):

 

 

2011, June 1-4, “Growing Local Economies By Plugging Their Leaks”  Congress for the New Urbanism, Madison, WI. Keywords: urban economics, urban finance, economic development, redevelopment

2011, January 24, “Space in Cities For Other Species From Geonomics”  9th Annual Ecology and Conservation Symposium at Portland State University, hosted by the Urban Ecosystem Research Consortium (UERC).  Keywords: economics, land use planning, sustainable development

2010, July 2, “Are Geonomies Both Bountiful and Stable? Feasible Funding for Demo-Dividends by any Sized State”  For the Western Economic Association International Conference, Portland Oregon. JEL Code: H;   Key words:  rent, taxes, subsidies, land, market, forecast

2008, March 7-9, “How to make BI inflation-proof while also raising wages”  Presented at the US BIG track within the Eastern Economic Association annual conference in Boston at the Park Plaza Hotel.

forthcoming, “Geonomics for Social Capital”, ISR Journal (Institute for Social Research, Belgium).

2006, December; "Beyond ownership" in Re-Public, an online journal in English and Greek focusing on innovative developments in contemporary political theory and practice, Pavlos Hatzopoulos, editor.

2006, July, “Financing Transit Systems Through Value Capture: An Annotated Bibliography” – with Dr. Thomas A. Gihring in The American Journal of Economics and Sociology, Volume 65, Issue 3, Page 751. It also is:

  1. reprinted in Natural Resources, Taxation & Regulation; Laurence S. Moss, ed. (2006), published by the journal above,
  2. posted by the Victoria Transport Policy Institute on their website (the most comprehensive resource to identify and evaluate innovative solutions to transportation problems), www.vtpi.org/smith.pdf,
  3. reprinted by the Urban Land Institute (Information Packet #397, “Transit-Oriented Development”, a compilation of articles and reports), 2004 July, ULI Info Services, 1025 Thomas Jefferson St NW, Ste 500 West, Washington DC 2007),
  4. reprinted by Eco Plan Paris,
  5. cited in the bibliography of Land Value and Public Transport by the Royal Institute of Chartered Surveyors (within the office of the Deputy Prime Minister) Policy Unit, and
  6. ordered by Jennifer Boteler, Librarian of the Washington State Dept. of Transportation in Olympia