Site Value Taxation in a Declining City

Abstract

Abstract. The relationship is analyzed between the economic decline of a central city and the likelihood that a site value tax will be politically acceptable. Public choice and land use models are combined to generate a scenario of land use changes and changes in improvements to land ratios which determine whether a specific property owner will gain or lose from a revenue‐neutral site value tax. A case study is presented which substantiates many of the effects suggested by the model. In general, private and public sector responses to a city's decline result in an atmosphere that is relatively hostile to site value taxation.