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Can the Land Tax Help Curb Urban Sprawl? Evidence from Growth Patterns in Pennsylvania

28 Pages Posted: 24 Aug 2008  

H. Spencer Banzhaf

Georgia State University - Department of Economics; PERC - Property and Environment Research Center; National Bureau of Economic Research (NBER)

Nathan Lavery

affiliation not provided to SSRN

Date Written: August, 22 2008

Abstract

Urban sprawl has become a policy concern of national prominence. Land or split-rate taxes are one potential way to address this issue. In theory, such taxes can raise the capital/land ratio. This in turn can raise the density of housing units where it is applied, if the average quality/size of each housing unit does not increase by enough to offset an effect on the number of housing units. This research explores these issues, looking at a panel of land uses and demographics in Pennsylvania. We confirm the theoretical prediction that the split-rate tax raises the capital/land ratio. We also find that the primary effect is in more housing units, rather than bigger or nicer units, suggesting the split-rate tax is potentially a powerful anti-sprawl tool.

Keywords: Urban Sprawl, Property Taxes, Split-Rate Tax

JEL Classification: H23, H31, H71, Q31, R31

Suggested Citation

Banzhaf , H. Spencer and Lavery, Nathan, Can the Land Tax Help Curb Urban Sprawl? Evidence from Growth Patterns in Pennsylvania (August, 22 2008). Available at SSRN: https://ssrn.com/abstract=1247862 or http://dx.doi.org/10.2139/ssrn.1247862

H. Spencer Banzhaf (Contact Author)

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States
404-413-0252 (Phone)

HOME PAGE: http://www2.gsu.edu/~prchsb/

PERC - Property and Environment Research Center

2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Nathan Lavery

affiliation not provided to SSRN

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