Land Value Taxation and Urban Sprawl

• In Event: Housing and Land Use

Abstract

Existing studies show that land value taxation raises the capital intensity of land development and stimulates economic activity. A key corollary of this impact is that land value taxation can be used as a valuable tool to combat urban sprawl. Despite a growing body of research on land value taxation, empirical evidence of its impact on urban sprawl remains limited. This paper is the first to empirically estimate the differential effects of land value taxation on urban sprawl. In addition, it directly addresses the identification problem in early studies, providing a more accurate test of theoretical predictions. This study compiles a valuable dataset encompassing all policy changes related to land value taxation in Pennsylvania over the past four decades. Using this rich dataset, the study empirically explores how the transition from traditional property taxation to land value taxation affects urban sprawl as well as how the impacts differ across jurisdictions. This research enhances our understanding of land value taxation and offers important policy implications for strategies to combat urban sprawl.

Author

• Zhou Yang, Robert Morris University