Thursday, September 2, 2010

Property Values

In the area around Huntingtown, Maryland, about 25 miles north of my place, the electric company is putting in additional lines which require new poles. These poles are larger than the old poles and have a new and unusual appearance. Personally, I think they look just fine.

But the residents of Huntingtown are complaining that the new poles are horribly ugly and will depress property values. I have two comments.

First, think what would happen to property values if the electric company were prevented from putting in the new service, and adequate electric power delivery became unavailable to their community.

Second, the component of the property values being affected is the location desirability, not the actual property built on the location. This should make it obvious that the change in property values, be it up or down, is not the doing of the owner, but the doing of others in the community, and therefore the location desirability is not really the property of the owner, but something the owner ought to be paying the community for.

The problem would resolve itself if our property taxes were shifted off of actual property, that is, the property the owner actually put there (or paid to have put there), and onto the location component. This would automatically compensate the owner with a tax break for anything beyond his control that made his location less desirable, and charge him extra for any doings of others that made his location more desirable.

Henry George proposed something like this clear back in the nineteenth century, and it sounds like a good solution to problems like the good folks of Huntingtown are experiencing.

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