Have you ever struggled to find parking in Los Angeles? Well, the city struggles to find entire parking lots! This article laments the lost revenue of “missing” parking lots. Lots not registered with the city and hence do not pay taxes.
New Urbanism advocates incoporating a entirely different property tax system. Currently, property is taxed based on its value and its “value” is based on the value of what is built on the property. An elaborate cathedral, elegant movie theater, or prestigious concert venue costs more, millions so than a parking lot that needs to buy… what? a couple traffic cones? a shack for a guard?
However, as far as the city is concerned the property has the same value regardless of what is built on it. First & Main with its proximity to downtown utilities, services, schools, public transportation, etc. is naturally more valuable than a tract of land in north hills.
But the city doesn’t see it that way. As said before they tax less for property that has nothing built on it. So what motivation does a developer have to build on a property? It is better to leave it undeveloped than to build. However, I posit, if the taxes were the same, all these undeveloped lots would be built. Because the taxes are the same whether you build a lot and are collecting $5/hour to park a car or build a mixed use building where you could collect rent from businesses and residents.