The continuing weight of major centers, is in a way countersensical..dispersal would seem to be a good option given the high cost – Saskia Sassen, Global Networks, Linked Cities
I’m still fascinated with the results from earlier posts looking at land value in relation to cbd location. I figured there would be a premium to centrally located land, but I didn’t imagine it would be so extreme. If the three factors of production are land, labour and capital than it seems logical that many businesses would disperse to cheaper land outside of the cbd. But of course this is not happening since there remains a demand for highly connected and central land in the cbd.
Here’s a related look at land value but in this case it’s how much money is returned to the City in the form of rates (tax). This exercise has been inspired by the work of Peter Katz and Joseph Minicozzi as documented in this article in Better Cities Best bet for tax revenue: mixed-use downtown development. In their study they looked at various forms of development and concluded that there is a tax-revenue premium associated with high density, high floor area coverage, centrally located developments.
The studies, by Public Interest Projects, show that on a per-acre basis, sprawling single-use developments such as big-box stores do a poor job of providing governments with needed tax revenue. Dense, mixed-use development, usually downtown or adjacent to transit, is financially much more beneficial.
What is so interesting about the study is that it runs counter to many city’s development ambitions of attracting large stores for their sales tax generation ability. While we have a different property tax structure, in particular in regards to sales tax, I thought it would be worth sampling some areas around Auckland to determine the revenues for various types of development. Auckland’s rates are calculated by combining land value and improvement value into a ‘capital value’ for rates assessment. Below is a look at the various rate levels on a hectare basis.
Besides the value of the CBD being off the chart, there are some other interesting revelations that I will explore later such as the role urban form, walkable neighbourhoods, land value taxes, and yes, even parking has on sustainable development patterns. For now, I’ll leave you with another quote from the earlier mentioned article:
The findings from the two studies, Katz says, “reinforce a concept advanced in the mid- to late 1800s by Henry George: the idea that land is our most precious shared resource. Since land is the raw material from which government derives most of its working capital in the form of property taxes, it makes sense to evaluate different forms of development in terms of their potential for revenue return.