of the following material is excerpted with written permission from How
Smart Growth Can Stop Sprawl, a briefing guide for funders by David
Bollier. The views expressed are those of the author. (Washington, D.C.:
Essential Books), 1998.
Promoting Good Design and New Investments in
the City: Site-Value Taxation
(One caveat to site-value taxation is the need
to designate lands that should
Site-value taxation could be a powerful force to reverse the forces of sprawl, by increasing supplies of affordable, attractive middle-class urban housing and thereby rejuvenating the city in other ways. More than a dozen U.S. cities, as well as Australia and New Zealand, have taxation regimes that reduce or eliminate taxation on buildings and shift it to land. In two cities that adopted this tax regime, Harrisburg and Pittsburgh, construction subsequently boomed and rental housing supplies increased.1
In Pittsburgh, the land tax is five to six times the tax on buildings and improvements. The practical experience in this city, despite the devastating decline of the steel industry, has been a significant increase in the amount of development and construction occurring in its downtown -- more than is occurring in its suburbs. In fact, following the adoption of the new tax rate, development within these communities has exceeded that of many similar neighboring cities. 2
Promoting City Livability: First
Time Homebuyer Tax Credit
The act offers a $5,000 tax credit incentive to first-time District home buyers. The credit applies to purchases completed from Aug. 5, 1997, until Dec. 31, 2000 and is for one-time use only. A single taxpayer with modified adjusted gross income of less than $70,000 is eligible for the entire $5,000 tax credit. The credit phases out between $70,000 and $90,000 in modified adjusted gross income. Joint filers are eligible for the entire credit with modified adjusted gross income of less than $110,000; the benefit phases out between $110,000 and $130,000. Unmarried taxpayers who purchase a residence jointly are allowed to split the credit.
Locating Business Near Infrastructure: Maryland's
Job Creation Tax Credit
Promoting Historic Preservation: Tax Incentives
for Property Owners
Promoting Land Recycling: Brownfield Tax Incentives
Various tax benefits can help offset the cost of cleanup. The Brownfields Tax Incentive, a provision included in the Taxpayer Relief Act of 1997, Pub. L 105-34, seeks to spur the cleanup and redevelopment of brownfields in distressed urban and rural areas. Click here for highlights of the tax incentive and EPA's Brownfields Initiative.
Protection: Tax Incentives
According to The American Farmland Trusts' Farmland Protection Toolbox, the most important type of agricultural tax program is known as differential assessment. Every state except Michigan has a differential assessment program that allows local officials to assess farmland at its agricultural use value, rather than its fair market value, which is generally higher.
Three states -- Michigan, New York and Wisconsin -- allow farmers to claim state income tax credits to offset their local property tax bills. These programs are called "circuit breakers" because they relieve farmers of real property taxes that exceed a certain percentage of their income. Iowa offers a credit against school taxes on agricultural land. While circuit breaker programs are not widespread, they are receiving increasing attention from state governments looking for ways to relieve farmers' tax burden. (For complete information, click to The American Farmland Trust)
On the West Coast, California's Land Conservation Act of 1965 allows farmland owners and counties to voluntarily enter into10-year, renewable contracts restricting landowners development options in exchange for lowered property taxes. The state compensates counties for a portion of the lost property taxes.
For other financial incentives to preserve farmland and open space see Farmland and Open Space Preservation.
Howard Kunstler, Home from Nowhere: Remaking Our Everyday World
for the Twenty-First Century (New York: Simon & Schuster, 1996),