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Re-Thinking Property Taxes

I really don't mean to sound like a proud parent or anything, but man, do we get some smart posters here on the Blog. (Makes up for the trolls, that's for sure.) Yesterday, I dropped a short think piece about shrinking the suburbs and hoped to get fodder for good conversation. I figured we'd toss around good ideas about consolidating parts of the region and public services in metro Detroit -- but I was pleasantly surprised when a reply from poster napper1 took it to the next level...

Rather than base the local property tax on something as merucial as "market value" it can and should be based on Land Use. Under such as system, each zoning classification would be assessed an amount per square foot of lot area, i.e., $1.00/ s.f. for single family residential, and another for retail, another for industrial, etc. rather than an amount based on some assessor's best estimate of what a property is woth on the open market if someone would sell it.

A Land Use based tax would also be constant, It would not fluctuate because of market conditions which is the case today and is why cities are having a hard time collecting enough revenue to pay for services.

As a land-use policy-wonk wanna-be, I was absolutely fascinated by this suggestion and, if the responses to his idea are any indication, so were plenty of our readers. I know that the Blog also has a few readers in some fairly important places in local government around here, so I'm going to urge everyone who cares to take a look at napper1's remark and offer a take on it here. (Sorry I'm still not WordPress savvy enough to take you directly to his comment, but it's the second reply in on the "Shrink the Suburbs, Too?" post.)

And before you ask...no, I don't know if this idea has been tried before elsewhere, don't know how it's worked if it has been attempted. But I do think it's well worth turning over in our collective heads, either to find its fatal flaws or to hold up as the sort of outside-the-box approach cities like ours need to give serious thought to.

So I'm rubbing my hands together eagerly and asking for your best takes: Can a land-use based property tax system serve Detroit and its surrounding municipalities? Is this the sort of idea that we need to be encouraging leaders like Detroit mayor Dave Bing and his suburban counterparts to at least put on the table? Or is there a big problem here that those of us who're so enamored of this idea have failed to take into account?

And thanks to napper1 and everyone else whose constructive critiques, observations and ideas further the conversation around these parts...

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