Land leeches are killing Winnipeg. Here's the perfect tax on them.
Learn more about a Land Value Tax
What is the Land Value Tax? The LVT (Land Value Tax) replaces property taxes. It sets the property taxes for the land based solely on the land value and it chooses to ignore the buildings on it - for one very good reason: so we can tax unimproved land like vacant lots and parking lots at the same rate as neighbouring land that has buildings.
A house on one lot and the parking lot next door would be taxed the same amount. Raising taxes on underperforming land creates an incentive for the owners to improve the productivity of the land by constructing something there which has a higher rate of return for the owner than the parking lot.
This Strong Towns YouTube video explaining LVT is great - see the aside for the embeded YouTube video of it.
What is a Land Value Tax?
Private surface parking lots are like the ones run by Impark in and around downtown Winnipeg. Improving an area with buildings and amenities that aren’t focused on parking allows for a nicer downtown Winnipeg to come into existence.
South of Portage avenue downtown is a walking desert. Parking lots are interspersed with businesses clinging for survival in the streets between Broadway and Graham avenue. Incentivizing those massive parking lots to be improved to a minimum level of productivity by putting a building on it allows us to create more walkable communities.
A parking lot does not go far enough in creating a space that people will enjoy and use. Buildings generally do.
309 Cumberland and Calvary Temple parking lots. These massive parking lots haven't been improved in decades
Imagine creating a new restaurant, bar, or coffee shop out of what was once 10 parking spots. LVT directly incentivizes people to create buildings. Our current property tax system does not. In fact, the existing system rewards those who keep their lots underdeveloped and penalizes the land owners who do improve it.
The current system the owners of surface parking lots are incentivized to sit on their land until it becomes incredibly high in demand before selling (speculation). Meanwhile, people who live right next door in houses or apartment buildings are paying through the nose in property taxes. That’s not fair.
A LVT gives the city a tool to assess the true value of land with no improvements on it. We collectively lose out on an improved day-to-day life when we have 50% of downtown Winnipeg covered in surface parking lots. Land use costs to the city for services are significant. LVT allows us to encourage those land owners to make the land productive or sell it off to someone who will make it productive, rather than sit on the property while paying ultra-low property taxes until someone comes along who’s willing to develop the land.
The actual implementation of a LVT for Winnipeg is complex and we need experts to plan and advise this.
The LVT would transform downtown over time. In terms of public policy for downtown development, this is a big one that can be very effective - no more free lunches for land owners with surface parking lots!
The LVT This is a tax known as the ‘perfect’ tax — let’s bring it to Winnipeg.
Let us know if you want to learn more. Remember that for Winnipeg to explore LVT, we need everyday peoples’ voices to be heard on policies that shape the future of Winnipeg.