How Property Taxes Shape Our Cities

Connor Nielsen:

“In this world, nothing can be said to be certain except death and taxes.”
— Benjamin Franklin

One of the core messages that Strong Towns and Urban3 share is that professionals in urban planning and city finance should work in tandem. Specifically, planners should pay attention to property taxes and assessors should pay attention to planning, because a failure to do so can lead to a multitude of unintended consequences in our cities. Over the next few weeks, I will share a series of articles based on Josh McCarty’s work at Urban3, spotlighting the follies of property taxes wielded indiscriminately.

Property taxes elicit a behavioral impact on urban design, just as planning policy shapes tax revenue. If bricks are taxed higher than wood, wood becomes a more attractive building resource to developers. If larger lots are taxed lower per acre, local government incentivizes larger lots and auto-oriented development.

As a result, property taxes have shaped our cities in ways that are often hard to spot. Throughout history, these nearly invisible forces have encouraged distinctive architectural features that ended up characterizing whole cities. Many of these peculiarities are widespread and date back to the 17th century at least. Here are a few examples: