LVT and Urban Agglomeration Dynamics

Summary

This 2025 paper models the effect of land value taxation on urban agglomeration — how cities form, grow, and allocate people and firms across space.

Key Finding

The authors find that an LVT can improve both efficiency and equity in agglomeration: by reducing the private capture of location rents, it eases the way for productive activity to concentrate where it is most valuable, while distributing the gains more broadly. This complements the productivity channel documented by Bakker (2023) — high privately-captured land rents distort urban allocation, and taxing them helps.

Bears On

• Outcome: High land rents suppress productivity

Sources

1. Fiorentino & Moogan (2025), "LVT and Urban Agglomeration Dynamics," SSRN. Paper