I have decided that it's about time I write something useful again, especially now that you, the reader or two can comment on it.
A Grave Problem, and a Fitting Solution
A lot of people have been talking in recent years about how cities, as they age, begin to lose their lustre. Nobody really seems to be able to put their finger on why this happens, but we've all seen the symptoms: Companies leave town, often taking moneyed employees with them, property values decrease, basic civil services lose funding, school districts slide further and further to abyssmal levels, transit services slide, as people begin more and more to view it as an unjustified expensive entitlement for the poor, and not a valuable tool for the whole city. Stores close and employers shed employees or disappear, themselves. Unemployment grows, along with crime, making once-vital neighborhoods dangerous after dark. It's a whole cycle that magnifies all the problems, the despair, the poverty, and the crime, as it progresses. We have seen it, and still see it, in every major city in America.
Meanwhile, in nearby suburbs, everything is new, shiny, and on the surface, as it should be. School districts are excellent, people have disposable income, employment is high, crime is low. People grow up and live their lives in these places, with a future in mind, and every resource available to them to aid in that pursuit. Yet this incredible contrast to the condition in the city isn't a surprising thing to these wealthy and middle-class people, nor is it to the impoverished urban population. Why? The city used to be just as successful as the suburbs now are if not moreso. It also used to be a lot more crowded. It would seem that the bliss of the city moved to the suburbs, but nobody seems to be particularly surprised about this.
Nevertheless, it is abnormal that prosperity emerges somewhere, seemingly at the expense of another place. It is generally accepted that wealth is created by commerce, and not simply rearranged, but in terms of geographic economics, prosperity does seem to have a trend, developed in recent years, of passing over an area, like a crowd doing the wave at an NFL game.
This simply doesn't make economic sense, or so it would seem. First off, despite what Michael Douglas will tell you, money is not simply rearranged. People don't necessarily become wealthy because someone became poor. If this was true, then mankind never would have gotten out of the stone age. Yet we have. Wealth is created by new and existing business. Prosperity is not a sin, and there is enough for everybody.
Secondly, cities have maintained their beauty and attraction for thousands of years. Constantinople was a thriving, wealthy city from its founding by the Greeks in about 600 BC(then called Byzantium) , for almost two thousand years up until it was sacked and looted(at the time, it was probably the wealthiest city in the world) in 1204 AD, at the hands of the marauding crusaders. London endured as the proclaimed greatest city in the world for hundreds of years, and endures still, though a lot of the problems mentioned above trouble it now. The foundation, bliss, and abrupt abandonment of cities seems to be an American trait that is catching on all over the world.
In the 60s, 70s, and 80s, many referred to it as "The Great White Flight," when millions of wealthy American city-dwellers forsook their urban homes for green lawns, driveways, and freeway commutes. There are many occurrences upon which this relatively sudden change in American life can be pegged. Some say the GI Bill lured people to the suburbs, and others pin it on the adoption of "car culture." I tend to think it's the latter, but that matter is not the focus of this writeup. I mention it because it very suddenly happened, and it has never really stopped.
For whatever reason, American life has moved to the suburbs, and there is a general feeling of leeryness and even fear, in the suburbs, in regard to the city, and the idea of living there to raise a family, as so many people did in years past. I, myself, moved to the interior of Kansas City when I first moved to the area in February of 2001, because I had been so impressed with the urban looks of Chicago, New York, St. Louis, and San Francisco in the years leading up to moving here. I have been working for a major telecommunications company that is headquartered in the suburbs of Kansas City, and have, in turn, worked primarily with suburb-dwellers, and have been met with joking remarks of "do the bars you go to require bullet-proof vests?" and serious questions like, "Do you feel safe where you live?" and "How often do you hear gunshots?"
There is a great misunderstanding of cities, among people raised apart from them. It isn't their fault- it's the general opinion I had too, until I had actually experienced urban life and how wonderful it can be. When any group is sundered from any experience, they become ignorant of it. Unfortunately, it's divisions like this that keep a lot of progress from occurring. Once again, that is neither here nor there. My point here is that suburban dwellers are generally not very receptive to the idea of both living and working in the city.
With all of this said, I propose a way to revitalize our cities, create prosperity, restore the bliss they once enjoyed, and surpass it. It does not have to involve grassroots efforts or political campaigns. It doesn't require suffering on the part of some for the sake of others. It doesn't require sacrificing anything for the sake of anything else. In fact, that, in my opinion, is where a lot of the American city's problems come from. That deferred to a later paragraph, the proposal I put forward involves making a radical change to how the city collects revenue for itself.
A man with whom I have very little in common, Ralph Nader, is quoted in several places as saying something I find brilliant, and makes sobering sense. Here, I elaborate on it:
Taxes on productivity have a negative effect on the productivity upon which they rely.
In other words, they are counterproductive, self-defeating, and hence, dangerous. Nader said that it would be more productive to tax things that we don't like. Tax pollution. Tax inefficiency. In this case, tax land. Throughout urban places(and suburban, too), inefficient use of land, versus its value, is rampant. If you look at an urban neighborhood full of what could be accurately described as "blight," you will see a lot of buildings in poor condition, empty storefronts, condemned and squalid housing, and even empty land. Despite their derelict appearance, the properties on this land are all owned by someone. An empty warehouse or slum apartment building has an owner, who has no reason to improve their property, because they are trapped. They are trapped by the current system of taxation.
The current system of taxation is based on property value, and takes its name from that. Property tax is computed, based on the assessed value of a given property, be it a house, warehouse, office building, apartment building, restaurant, bar, parking lot, or vacant lot.(For a full list of property types to which property tax is applicable, consult your local authorities.) If a property gets a high appraisal, a tax rate is assigned, based on that value. If the same property, in the following year, suffers from hail damage, and a helicopter crashes into it, it gets a lower assessment, and a lower tax rate is assigned.
This system discourages people from making their property as valuable as it can be, because high value = high taxes. In fact, it actually causes people to make their properties worth as little as possible, to accrue a lower assessment, and pay lower taxes. Because of this, the city doesn't get all the money that they could get, and the community suffers from blight and poorly-funded public services. The group that this system hurts the most, however, is the poor, the people who don't have extra money to spend on taxes.
In fact, home ownership is more often than not, not even an option, and they wind up renting a home that someone else owns. The owner has no reason to improve the house/apartment building, because that means higher taxes, which would simply be passed on to the residents in the form of higher rent, that they can't afford anyway. This is how property tax encourages blight, slum landlords, and vacant business space, homelessness, and even crime, to exist.
In a land tax scheme, the owners of these properties would no longer pay taxes that were bound to the value of the property, but rather the value of the land the property occupies. Free from the, "improvement equals higher taxes" mindset, they can improve their property without penalty. In fact, this system encourages them to do so, and make the property valuable. The only impact is positive.
The impact is especially evident with businesses. Businesses have a pronounced obligation, not only to be valuable, but to be productive. The more productive they are, the more their previously taxed property is worth, and in turn, the more capable they are of paying taxes on the land they occupy. Businesses, under a land tax scheme, have a unique opportunity to physically expand and improve their property, without incurring additional tax liability.
This all fosters efficient use of land, and in doing so, removes urban blight, and replaces it with vitality. In addition, when businesses are free to expand and improve without penalty, they are more capable of employing people, who employed, would be more capable of paying rent or mortgage payments, and just generally participating in the economic process. The cycle of prosperity continues and escalates from there.
Certainly, there are areas where improvement wouldn't be immediate. However, at no point would the system degrade conditions. It's like a one-speed bike: you can pedal forward, and you can coast, but you can't pedal backwards. It's just, it's successful, it allows the natural economic process to take place, and it will save the American city.
I think that you may be right, but I think the greater issue is higher taxes, and bigger city government. I don't think the slide starts because all over a sudden people see crime, and the neighborhood starting to deteriorate. I think a few smart people say "$6000 a year in property taxes for my middle class home! No way, I am moving out to the burbs where I can get a 5 year tax abetment and after that my taxes will only be $3000 a year for the same value house." (Note: these people aren't evil or stupid, they are smart because over a 10 year period they are saving $45K) And that is what starts the slide. I don't think that taxing land will prevent this from happening (as long as they are still trying to collect the same amount of taxes.)
Just my thoughts
9:46 AM, Aug 28, 2003
Again, this is not a tax on property value. It is a tax on land value. Also, I wasn't trying in this essay to explain why people were leaving town. I was just saying that they are, and that is an abnormal thing, compared to the rest of human history.
9:49 AM, Aug 28, 2003
You crack me up sometimes!
This is brillant, but i don't see how this can be done w/o grassroots. I mean, cities are not just going to make these changes outright. Perhaps a good way to start would be something you're not suggesting which could be to start in a small, suburban city. Starting there would show the surrounding area how well it worked w/ them and thus encourage the larger cities to try as well. So, what are you doing? Are you talking w/ KC officials about this? How are YOU becoming part of the solution?
10:48 AM, Aug 28, 2003
I have to agree with Alex and add to it. I think that a big reason for the change in demographics for middle class individuals, is that people do not want to raise kids, or live in a city any more. People have this impression that space = happiness. We have this inherant drive to have more and more. Sure it is materialism, but people want to enjoy the money that they are earning, from this wonderful society that is based on capitalism. You just have to keep in mind that John Doe can not really enjoy his new Craftsman 30" deck riding lawn mower, in his 3'x6' patch of lawn in the city. He wants a house that has 1/2 acre to mow, and a 2-3 car garage to keep the rest of his toy's. You can only find that outside the city for a reasonable price.
8:44 AM, Aug 29, 2003
Are you suggesting that materialism is an invention of the 20th century? If so, do some reading.
1:49 PM, Aug 29, 2003
I do not know where you came to the notion that I said materialism is an invention of the 20th century. I feel that people want more out of life, and have the financial means now to afford more "TOYS" then they were before. After WWII you started to see a surge in incomes and an expansion of the middle class due to the hard work of individuals trying to provide themselves, and their families a better life. It had a slippery slope effect, and it really snowballed from the 70's and 80's. During this time you saw huge growth of "The Burb's"................Good movie by the way.
1:57 PM, Aug 29, 2003
How does any of this explain the surge of people moving back into the cities. How does this explain developers buying up slums near down towns, and rebuilding them. People don't have less stuff.... I am telling you, it is ALL (ok 90%) about taxes. Note: the reason people are moving back to the cities is 1) They are tired of the commute and 2) Tax abetments.
4:45 PM, Aug 29, 2003
Okay, I am not trying to explain why anyone is moving to or from the cities. I simply said that it is and was happening(The Grave Problem). The principal purpose of the essay was to highlight a solution(A Fitting Solution). For the purposes of this essay, I don't care about whether people are moving because of tax abatements, a suddenly emergent desire for a lawn, or a penchant for fish.
I was simply stating the problem. I wasn't trying to explain it, or place the blame on anyone or anything. I was only trying to propose a solution.
I would like to hear your thoughts on the solution I proposed. Any comments that are trying to explain why people are moving away from cities are basically counterproductive, as that wasn't the purpose of this writeup and resulting discussion.
Do you have anything to say about land tax, and why it will or will not work?
9:09 PM, Aug 29, 2003
AHAHAHAH THIS SIGHT SUX VERY VERY GAY
8:07 AM, Aug 30, 2003
Shouldn't you discover the reason people left the cities before you try to develop a solution to lure them back?
2:09 PM, Aug 31, 2003
Luring them back isn't necessarily the intended result of the solution. Cities, without them, are still full of hundreds of thousands of capable people. They will come anyway, but if they don't, the city will still recover and prosper.
1:23 AM, Sep 1, 2003