There’s a new state initiative currently in the signature gathering phase that would tie property tax rates to density in an effort to reduce sprawl. Opposition, led by the Single Family Housing Building Association, is already gathering to fight the initiative. Below the fold I’ll explain the initiative in detail, and why it’s a good idea.
The motivation behind the initiative is to reduce sprawl and thus its negative effects, both positives. Many people’s opinions on urbanization and suburbanization were formed in the 1970s and 1980s, and those people imagine cities as places full of crime and poverty. However, today, the suburbs are actually the more dangerous and poverty-stricken places. According to this study (emphasis in the original):
By 2008, suburbs were home to the largest and fastest-growing poor population in the country. Between 2000 and 2008, suburbs in the country’s largest metro areas saw their poor population grow by 25 percent—almost five times faster than primary cities and well ahead of the growth seen in smaller metro areas and non-metropolitan communities. As a result, by 2008 large suburbs were home to 1.5 million more poor than their primary cities and housed almost one-third of the nation’s poor overall.
The rise in poverty in the suburbs has already had many consequences, the most important of which is a drop in homes prices. Impoverished homeowners are more likely to default on their mortgages, which depresses prices further and results in more poverty. Suburban poverty is more serious because there may not be the systems in place in those communities to provide social services.
We know that density increases wages in addition to its poverty-averting effects. In this study, it was shown that increasing population density increases average wages as workers are better able to take advantage of “positive knowledge” spillovers from their neighbors and have more access to job opportunities. Another study from the 1990s showed a remarkable effect of population density and income, each 10% increase in density resulted in a $90 increase in annual wages. That was priced in 1997 dollars, so it would be even larger increase in 2011 dollars. We can increase average wages by $2000 per year just by tripling the population density.
Suburban and rural areas also have a startling effect on IQ scores. I took data from these two sources and correlated them in Excel and found that nearly half of the difference in IQ between countries could be explained simply by looking at their urbanization. It’s not a surprise that the countries with the highest IQs are those that are the most urbanized. Here are a couple more links to more rigorous studies if you are interested. They all find the same thing: higher densities lead to higher IQs, which means suburbanization is actually making people more stupid.
The suburbs have also become much less safe than cities:
[University of Virginia urban planning professor William Lucy]’s 2009 study analyzing Virginia’s major cities, suburbs and rural areas found that lower-density areas were the most dangerous, while the safest communities, for the most part, were high-density cities. Not only did low-density communities have more traffic fatalities, but they were also the most dangerous places for stranger homicides.
The number of fatalities is startling, according to the Post article, Rutgers University researchers “determined that a 1% increase in urban density translated into a 1.5% decrease in traffic deaths and a nearly 3.5% decrease in pedestrian fatalities.” Letting people live in low-density environments is tantamount to murder.
The bill would define four property tax brackets based on population density. The lowest bracket would be 2%, and would require densities above 10,000 people per square mile. The next bracket would be 4%, for densities between 5,000 and 10,000 people per square mile, and the last two brackets would be 8% and 16% for densities between 5,000 and 2,500, respectively.
Given all the empirical data, it’s clear that anyone choosing low-density, suburban living is seriously misinterpreting their own interests. That’s why, in addition to the nudge of differential property tax rates, the initiative harnesses market forces by altering the supply and demand of good and bad housing.
The initiative creates a “habitat restoration commission” that is required by law to identify 400 square miles of “low-density, environmentally destructive development.” These areas would be seized under eminent domain powers, and the property tax revenue used to carefully remove all traces of human habitation, in order to improve water quality, reduce car dependence, and restore habitat for wildlife. The areas selected are ultimately up to the commission and the selection guidelines, but the initiative website suggests Sammamish, Black Diamond, Maple Valley, and Duvall as likely subjects for this treatment.
The true genius of the plan, however, is not in constricting the supply of low-density housing but increasing the supply of high-density housing. To save on the necessary outlays, landowners in demolished areas will not be compensated in cash, but instead in kind. The State would build high-density housing in cities near major transit corridors; since these are automatically more valuable than exurban tracts, landowners, our transportation infrastructure, and the planet all come out ahead. That’ll certainly be the case once the former sprawl residents get used to their surroundings and learn to appreciate the superior attributes of dense, urban, transit-oriented living, surrounded by green space as in the sample images, again from the campaign website (see “before” and “after”).
More specifically, 55% of the money would then be spent building subsidized high-rise homes in five urban centers across the state King, Pierce, Snohomish, Spokane, Walla Walla and Clark counties. Another 20% would be spent building new infrastructure in those counties and that last 25% would be spent demolishing the abandoned homes in the suburbs.
This initiative is a long-overdue to attempt to overcome decades of errant planning and inconvenient choices made by residents. It’s a farsighted plan that ultimately benefits everyone. Be sure to volunteer and donate between now and election day.