Impact of a Two-Rate Property Tax on Residential Densities
Cho et al. (AJAE 2013) simulate a revenue-neutral two-rate tax for Nashville-Davidson County and find residential density rising +18% in general services districts and +83% in urban services districts — concrete magnitudes for the anti-sprawl density channel, from a simulation rather than a natural.
Summary
"Impact of a Two-Rate Property Tax on Residential Densities" by Seong-Hoon Cho, SeungGyu Kim, Dayton M. Lambert & Roland K. Roberts (University of Tennessee; American Journal of Agricultural Economics, 2013, DOI 10.1093/ajae/aas141) simulates a revenue-neutral two-rate property tax — higher rate on land, lower on structures — for Nashville–Davidson County, Tennessee, using 2006–07 parcel data. The headline result: housing density rises about +18% in general services districts and +83% in urban services districts under the two-rate design.[1]
This is the most concrete density magnitude in the sprawl evidence base — but it is an ex-ante simulation, not a natural experiment, and the wiki labels it as such wherever cited. It is one of a cluster of Nashville studies by the same team: a companion land-development model (2011) predicts that development under a hypothetical LVT locates at shorter distances from preexisting development — the compact/infill pattern — than under the observed property tax.[2] Because the cluster shares data and authors, the wiki counts it as one line of evidence, not several.
Nuances and Limits
- Simulation, not observation. The magnitudes come from a calibrated model of parcel-level responses, not from an adopted tax. The observational counterpart is Banzhaf & Lavery's Pennsylvania decomposition.
- Nashville-specific calibration — described in the companion paper as the most sprawling large US metro, which may bound the upper estimate.
- Full text not consulted directly. The bibliographic details and the magnitudes reported here are corroborated across multiple independent secondary descriptions of the paper. Scan depth Light.
Bears On
- Outcome: LVT reduces urban sprawl — the simulation tier of its evidence map
- Research: Banzhaf & Lavery (2010) — the observational counterpart
See Also
Sources
- Seong-Hoon Cho, SeungGyu Kim, Dayton M. Lambert & Roland K. Roberts, "Impact of a Two-Rate Property Tax on Residential Densities," American Journal of Agricultural Economics, 2013. DOI — used for the design and the +18%/+83% density magnitudes (B-claims, simulation).
- Seong-Hoon Cho, SeungGyu Kim & Roland K. Roberts, "Measuring the Effects of a Land Value Tax on Land Development," Applied Spatial Analysis and Policy 4, 2011, pp. 45–64. Publisher — used for the compact-development-pattern companion result (B-claim, simulation).