Leavers and stayers both arrive at the same conclusion: Baltimore needs a property tax fix.
Baltimore Thrive | Envision Baltimore
Community Ground Rent for the 15 Minute City
Excerpts:
Baltimore Thrive presents a vision and a practical plan for creating neighborhoods that are safe, friendly, interesting, and enriching places to live. The goal is to meet most of the basic needs of individuals and families within a fifteen-minute walk from wherever they live.
The City of Baltimore has more than 15,000 vacant houses and several thousand vacant land sites. The challenge is to harness human ingenuity – labor, capital, and taxation policy – in order to repair, renew and repurpose neighborhoods. Once this is accomplished then Baltimore will be able to retain and increase the number of people who want to live in the city as it will become a truly charming place to be.
Baltimore’s tax system needs a makeover. Taxes should be removed from the things we want – like decent homes and wages – thereby increasing the purchasing capacity of wage earners and small business owners. So reduce the onerous tax burden on labor and production and shift public finance to the value of land sites. Without losing public revenue or increasing public expenditure this tax shift make both buildings and land more affordable. Property owners will either put their sites to good use through their own initiative and without public subsidy or be motivated to sell to someone who will.
Today, we allow a few private landowners to appropriate community-created land values. This drives speculation, usually by absentee owners, while a too-high tax on buildings leads to blight and abandonment. Why should taxes go up when home improvements are made? Take taxes off of homes and other buildings! Baltimore’s tax system should reward all the good things like work and production while discouraging land speculation and hoarding.
A tax on land value returns the “community ground rent” back to the community so that these funds can be used for the benefits of the community as a whole. With the proper framework of public finance incentives, land, labor, and capital can increase the supply of affordable housing and employment in Baltimore City. And as people improve their neighborhoods, the community ground rent fund is there to provide access to clean water, transport, lighting, recreation, and education.
Another innovation of Baltimore Thrive is the proposal for a Neighborhood Micro-Banks (NMBs) – a scaled down version of the public banking movement – where the ground rent would be deposited and held until the CLT or CDA is ready to utilize the funds. Examples of how the community ground rent might be spent include the purchase of vacant or derelict land and/or buildings, the renovation of buildings, or for seed funds or low-interest loans for the establishment of cooperatives and small business start-ups.
Democratizing and decentralizing the key factors of land and money by recycling the community ground rent back to the neighborhoods can strengthen and restore Baltimore. The city as a whole will experience renewal, resilience, and a dynamic equilibrium overall as it continues to remove taxes that are onerous, unfair and non-productive.
READERS RESPOND
Baltimore lacks opportunity. That’s why I’m leaving
BALTIMORE SUN | AUG 30, 2021 AT 5:00 AM
Baltimore’s many problems occupy most of the pages of The Baltimore Sun (”Mayor Brandon Scott: Building a safer Baltimore for our children,” Aug. 24) and I’d like to offer my thoughts as someone who, while the city is experiencing an exodus, chose to move to Maryland and live in Baltimore and why we’re deciding to leave again.
My wife and I left Montana in 2017 in search of economic opportunity and a better life and I can say we found it here. My wife found gratifying work at Johns Hopkins. I found higher paying work here in Maryland and got an MBA from the University of Maryland.
But after four years, we’re moving to Washington state. We’re leaving for the same reason we first came; the opportunity is elsewhere. What I find frustrating is that this shouldn’t be the case. Baltimore is 40 minutes away from Washington, D.C., on the shore of the Chesapeake and in the center of one the richest states. If ever there was a city in this country that should be prospering, it’s Baltimore.
To turn things around, Baltimore needs to become a city that both attracts new residents and keeps its existing ones from leaving. For me, other than the violence and lack of good public schools, one of the reasons to leave is due to the city’s taxes.
While I’m certainly not the first to complain, Baltimore City’s property taxes are far higher than the surrounding counties. After paying extra to live in the more violent city with poorer schools and higher water bills, it’s not a mystery as to why so many people chose to leave. Baltimore could easily address this issue with a land value tax. An LVT, a tax on the unimproved value of a plot of land, would reduce taxes for city residents overall while increasing taxes on more attractive plots to reflect market rates.
The owner of a row of dilapidated row-homes currently pays almost nothing in taxes because the houses are nearly worthless. A land-value tax would tax the land underneath the homes, which is more valuable than the homes themselves. Facing higher taxes, the owner would either need to develop the property or sell to someone who would. This would increase the amount of housing available and lower rents, both of which would make Baltimore a more desirable place to live.
This city is tantalizingly, agonizingly close to turning it around. I believe that a jobs program for the city residents that have been failed by Baltimore’s public schools and lower property taxes to attract people from the county and out of state are all this city needs to start a virtuous cycle of economic opportunity, growth and trust in Baltimore and its institutions.
I wish Baltimore and everyone in it all the best. Chris Nutt, Baltimore
Comment: The message here? Fix the property tax system before it’s too late!
