There’s a 2023 report by the Economic League of Philadelphia (https://www.economyleague.org/kypp) that highlights the inequity of the real estate market regarding home price disparities between white people and black, indigenous, and people of color (BIPOC).
The bottom line is that had the inequities not been present between 1950 and 2000, black Philadelphia homeowners would now have $24 billion more in wealth and Latino Philadelphia homeowners would have 33.4 billion more… and with more money, they, too, could escape inner city poverty.
The reasons they don’t have the extra money is that BIPOC were redlined out of those neighborhoods, and the ones they settled in had fewer public parks, less lighting, more noise, less sanitation services, etc., which collectively makes properties there worth much less than comparable white areas of town.
So, here we are 75 years after the appearance of this trend, and we ask ourselves what can be done today, going forward, to establish the equity so obviously missing?
One hundred and forty-seven years ago, I laid out the solution but few listened.
Fortunately, enough people did listen and they are working to make the changes I would advocate today, listed below.
First, perhaps the city should seek ways to even the disparities so people can prosper without moving out of Philadelphia.
The point most policy analysts miss is that the real estate industry and land speculators profit well, no matter who you are or where you are going.
The thing missing is reparations for the racist past, which brings me to the next point.
Second, economists universally agree that taxing income and capital makes less sense than taxing economic rent, but the general population are kept stupid about this … that economic rent is the inequitable and unearned income of the land speculator … and who are land speculators … well, people sitting on (and paying low taxes for) vacant land, unused commercial buildings, and parking lots … we call them speculators because they know that the present use of their land is not the “best” but it is OK (in their minds) as their land is just getting riper.
Should land speculation be illegal? … no, but how about the speculator funding their own venture rather than expecting his neighbors fund them by requiring the speculator to always pay the higher tax on land value for the “best” use and not the lower tax for the current use and thereby give his neighbors a break on their property taxes.
If more city revenue came from these speculators, the city could relax income and sales taxes and taxes on capital, such as a person’s home/structure.
Might this be a forward-looking policy advance to shore up the historic inequity? And, lastly …
Third, let’s just remove all taxes on structures, i.e., the improvements on land, including the house that people live in. But in order to make up for past sins, Philadelphia could just remove the structure portion of the property tax on those homes in the historically redlined neighborhoods.
Of course, the backlash would be to allow white neighborhood homes to be likewise exempt from the structure portion of the property tax.
Georgists would just applaud.
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