Last week, Edmonton’s Urban Planning Committee met to decide what to do about the abundance of surface parking lots in downtown. Surface parking lots are a wasteful land use in central areas, near transit and many people want to see them redeveloped. Ultimately, the committee chose to punt the question about what to do back to staff, as they didn’t want to penalize landowners who wanted to be in compliance with the by-law, but could not immediately develop or sell their land, at least for what they want to build.
In the long term, the best way to deal with underused land in valuable areas is by levying a land value tax (LVT) – like property tax, but excluding improvements. A LVT increases the carrying cost of underused land and decreases taxes on efficient development of land. It disincentivizes speculation and landhoarding, and incentivizes redevelopment. This is exactly the reason why Detroit’s mayor, Mike Duggan, has put forward a LVT plan to deal with blight in his city.
While there are barriers to introducing a LVT on a municipal level, namely that the province would have to change legislation, a LVT is just a better tax than property tax. It’s never too early to raise awareness of better taxation options. Here’s my deputation for a LVT at Edmonton’s Urban Planning Committee: