The Proposed Real Estate Tax Hike is Bad Policy Ankle Biter by Michael C. Hild - March 17, 2019March 18, 201928 Every time I hear of someone mention that they bought a piece of land as an investment I cringe. The practice is sometimes referred to as “land banking” and it is destructive behavior that bears no benefit for landlocked cities such as Richmond. In fact, land speculation inhibits investment as the so called investor usually has no intention to do anything with the land. The investor is simply speculating that the value of the land might increase over time because it is in an area where someone else is taking a chance and actually building or renovating an adjacent structure. These land bankers glom on and prevent progress as they attempt to make a profit off of others’ work while their vacant or often blighted and collapsing buildings sitting atop them sit idle contributing nothing to the City. Visit sections of Richmond’s underdeveloped and impoverished areas such as Manchester, Blackwell, Northside, and Richmond’s East End and the land banking by public and private individuals alike is astounding. Slumlords, speculators, and out of town owners amass enormous quantities of vacant lots that they often have never even seen before. They snap up these parcels and sit on them for years or decades, paying minimal taxes along the way. Now take the case of the new owner of a parcel of land who attempts to build something on that bare lot they just purchased. What does that true investor get in return? Once complete, he or she gets a giant tax bill from the City of Richmond, that’s what. And the Mayor would like to raise that tax even higher. That seems like misguided punishment for an owner who has the audacity, some might call it borderline insanity, to try to build something in Richmond. Those good intentions come despite having to navigate City Hall’s completely dysfunctional permitting office. That builder will be forced to make weekly trips down to City Hall’s underfunded and completely broken permitting office as he or she pleads, cries, begs, and screams for the never ending next piece of paper or information the City requires from them to complete construction. The process is so bad, it is as if Dante himself designed it as the epic finale and 10th stage of hell to his Inferno. More owners might be willing to navigate this broken system in Richmond and build despite it if the City abolished the real estate tax on improvements (buildings), and simply raised the tax on the land itself. By making owners of vacant and underutilized land pay a higher tax, it would force derelict properties to be improved and put to use rather than sitting idle. This approach has been gaining momentum in forward thinking cities, and written about in publications such as Strong Towns, Slate, and Greater Greater Washington (not a typo, yes there are two Greaters). A higher land tax would disincentivize slumlords from allowing their derelict properties from continuing to fall into disrepair. If your tax remains the same regardless of whether you have a bare parcel, a building on it, or a collapsing house, the owner would be incentivized to fix the property so they could collect rent to cover the tax or sell it to someone who could. The new approach would also incentivize new construction of badly needed affordable and market rate housing for the City’s residents. So Mayor Stoney if you really want the City of Richmond and its schools to flourish, eliminate the tax on buildings and replace it with a higher tax on land. The city would be awash in new investment and tax dollars if it did.
RVA STOP voting for people like this.. You do it over and over and over and then complain about the bed you made. If you don’t watch it you will turn a beautiful city into detriot. You don’t know how close you are to it now. Reply
Is throw more money at the schools the answer? The city already spends over 4000 more per pupil avg than the surrounding counties and with weaker results. Reply
First you have to understand that nothing they do is about improving the economic situation – it is all about social engineering. They won’t even collect the $47 million in back taxes because it may inconvenience the slum lords. This is a ‘good ole boy’ system running totally wild. Think of this every time you read of another unbelievable act or policy and the motives will be completely clear to you. Reply
Sadly, I dont know a lawful way to set a different tax rate on land than improvements. Constitutional amendment may be needed. Reply
I disagree. Best solution: replace Stoney with Jack Berry. We need an experienced administrator not some ass mocking critics with talk of fairy dust. . . Reply
Sell the boarded up, abandoned properties RRHA owns. That will generate much revenue, and rehabilitate neighborhoods. Reply
My letter today in the RTD.. 3rd one down https://www.richmond.com/opinion/your-opinion/letters-to-the-editor/letters-to-the-editor-march-david-brooks-column-a-rambling/article_47fa6d14-d5d5-548d-b481-24cafe236986.html Reply
So much waste of money like changing the name of Arthur Ashe come Boulevard the Redskins Camp the project down at play Nico Rocketts Landing all the money to Stone Brewery Richmond sign so much waste of money that should go to education and the children Reply
Also like that bike trail that runs through Richmond right now they wrote a blank check get it done before the race gets here Reply
So long as Richmond City elects empty suit politicians with no private sector experience, you will never get this kind of innovation in tax policy. Reply
Another or higher tax is the first thing they think of. I deliberately did not eat in Richmond yesterday because of the excessive tax policy. Reply
The growth of our will always be stunted if not halted because of the greed of these politicians. There are so many loopholes in these tax hikes to line their pockets. DISGUSTING Reply
You are far from correct and both allow the mismanagement of city dollars and put the burden of fixing it once again on the citizens. It is good that our citizens painted schools but it is not the “answer” by them doing it either. If you own land it is not my right to tell you what to do with it. You clearly have no concept of what it takes to “improve” property. Reply
Stop spending ring a bell…Plenty to waste on pet projects which benefit the electors or should I say the democrats at every turn, doing nothing for the overall citizenry. Electing Stoney as Mayor of Richmond when he isn’t even from here because of his ties to the governor is ludicrous. Ignoring what is taking place in Va. as a whole with such sham politics is only another way of covering up reality. Taxing The citizens will hurt who ? The ones which have plenty or the majority which have little. These aren’t the actions nor logic of leadership and there is plenty of shame to share… Reply
First things first, audit the city government. Tax revenue and business growth has been increasing. This isn’t a lack of funds, it is a mismanagement of it. Reply
Haha. Raise property taxes and you’ll be just like illinois! Illinois is the worst place to live because of that! Baaaaddd idea Reply
Not sure I agree with the premise…many slumlords already rent their properties out and are happy renting as is…also, why is it always an issue of tax increases…why not incent improvements to increase the overall tax base? Reply
And, revisit not for profit/tax exempt status. Going forward, give VCU a reduction, but not full exemption. Revisit senior living facilities, such as The Hermitage that are profit making corporations exempt because of “religious affiliation.” They are not churches. Audit City efficiency and effectiveness, and cut from the bloated top, not direct line staff that provide services to citizens. Audit management of vendors, where there are numerous examples of overpriced, poor quality workmanship…just look at repairs of neighborhood streets for one example. Mayor, make cuts to your security staff…you are a Mayor of a mid-sized City. Drop the vanity project that proposes corporate welfare and put the money where it belongs…into schools, infrastructure (roads, sidewalks), and neighborhoods (pick up the damn leaves, repair sidewalks, install adequate lighting, keep the parkways mowed, etc.). Reply
