Unexpected to see this talked about on HN.
I actually went through the Allegheny county “newcomer tax” just some months ago.
It was a bit of a strange process to appeal (I lost; my house is very weird for the area).
While I do see the benefit for not raising taxes so consistently for long-term owners (and could definitely see gentrification-esque effects) it does seem like a pretty obvious - if bitter - pill to swallow if the area is going to have any chance of continued growth.
If the only way to have growth is to kick out the existing inhabitants, one wonders what the purpose of “growth” is.
How can you sustain a city if the existing inhabitants children would rather leave?
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That seems like a problem for the inhabitants to work out through a democratic process.
Tech bros and crypto bros moving into a city and then griping “housing is too expensive here” doesn’t count, particularly when they’re the cause of the problem in the first place.
Continued growth to what end...?
Jobs and new families?
I’ve become intimately familiar with Youngstown, OH - about 70 miles away from the Pittsburgh - and it’s a great case study of how far a once-powerhouse city can fall if it doesn’t a actively reinvent itself.
That's causally backwards. What we want is for families to have jobs and an American quality of life. Not to just create "jobs and families" as if they are the product at the end of the manufacturing line. That goal only makes sense for politicians (and short-term thinking politicians, at that).
Ultimately to the end of allowing Pittsburgh and the surrounding area to be a place with agglomeration effects, growth, and opportunities enough to allow smart and ambitious young people to remain in the area as opposed to brain draining into the Acela corridor.
It’s sad when a city that could go either way chooses to rust and its most talented young people no longer have the option of staying in their home if they want dynamic careers.
Don’t worry my friend - they will do it to you again in 5 years, and you can lose again and pay extra tax if you like.
Pittsburgh is a mess. I grew up there and came back recently to visit after 20 years. I walked a street for a few miles, and it was homeless after homeless. Heartbreaking change to see. I spoke with some missionaries who were handing out provisions, and they said the next street up was even worse.
Reminds me of what happened to San Francisco after the tech boom. What a loss. These people who come to these cities for the economic zone are sick - they will literally let people die on the street. I wish Pittsburgh could tax the landowners into poverty.
Is this not the Rust-Belt writ large?
De-industrialization for decades on decades - of which Pittsburgh did an okay job of pivoting (many many other towns nearby faired far far worse) - pile on brain drain to the Coasts and a opioid epidemic to boot, I don’t see how this is an indictment of Yinzers.
Why don't they go back to their riff on land value tax? Property taxes are regressive and stifle growth, development, and improvements.
Agreed as does the org putting out the linked paper https://www.prohousingpgh.org/blog/policy-land-value-taxes
And if you read the linked paper, particularly the section "Effects of Reassessments on Split-Rate Taxing Bodies" (split rate being the riff you're referring to), making land value assessments more accurate of course makes land value taxation more appealing.
Property taxes are the only thing that can redistribute wealth from landlords to the working people.
Your company definitely bought / financed it, so it is clear evidence of your financial means at the purchase time.
Businesses that own land don't pay federal taxes, they can just declare 0 profit every year while paying for range rovers for the owners.
Property taxes have a component that redistributes wealth from landlords to the working people, but it also has a component that penalizes making better use of the land. The former is usually called "land value tax" and the latter is the part of the tax that is proportional to the improved value of the land. The latter part incentivizes some uncertain amount more towards mcmansions and away from multi-unit buildings.
Property tax also encourages speculators to hold and trade underutilized parcels compared to land value tax. With property tax, the penalty for holding an empty parking lot in a dense urban center is much lower than under a land value tax system.
Oh this definitely needs extra tax in areas with limited supply. Unoccupied property ? 1% tax per month. Rent it or sell it.
That’s one approach, but then you get people playing with the system, adding a single apartment to the multimillion dollar lot, or the aforementioned parking lot (technically a business). The great thing about LVT is that it bypasses these shell games. The biggest weakness is that you have to fight off any attempt to seize control of the valuation process, and that is going to be difficult except in places with highly engaged and intelligent voters.
That is fair. Would business zoning help in this scenario and business specific property taxes?
It might, but it’s going to be politically difficult to navigate and maintain. The tradeoff of increasingly complex rules/taxes versus a straightforward (but you have to get valuation right) method like LVT is that complex tax schemes inevitably end up with loopholes or exceptions thanks to lobbying and political connections. In the rare cases where airtight rules are passed, those are often added later as “incentives” or other dealmaking. No free lunch.
> Property taxes are the only thing that can redistribute wealth from landlords to the working people.
Eh? Working people always pay the property tax, landlords do not.
Landlords will just price rent at the maximum price the market can afford. Their costs are irrelevant.
Evidence: the free cash flow varies wildly per geography even in the same tax region.
Landlords will accept negative cash flow in expectation of property value increase.