Gaffney (2006): New Life in Old Cities

Overview

"New Life in Old Cities: Georgist Policies and Population Growth in New York City, San Francisco, Chicago, Cleveland, Toledo, Detroit, Milwaukee, Pittsburgh, and Other Cities, 1890-1930" is a historical-quantitative essay by Mason Gaffney, last emended 10-22-2006 and published on masongaffney.org.[1] Its abstract states the thesis plainly: "the Georgist movement inspired a large number of civic leaders — mayors, assessors, governors, congressmen and others — to implement Georgist policies in a number of US and Canadian cities," reducing or removing assessments on buildings while raising them on land and financing "low-cost, high-quality public services" from the land-value base; "where implemented, these policies resulted in rapid population growth."[1] Gaffney uses decennial US Census population data, 1890–2000, as his comparison metric — building-permit records, he notes, "do not go back to the 1920s" in usable, uniform form across cities — and tabulates growth rates for New York City against three comparison groups (upstate New York cities, mid-Atlantic cities, and NYC's New Jersey neighbors) plus roughly a dozen other US and Canadian cities.

The New York City Case

The paper's most developed episode is New York City under Governor Al Smith's 1920 Tax Reform Act ("the Al Smith Act"), which exempted new residential construction — but not the underlying land — from local property taxation from 1921 through 1931, capped per room and per building.[1] Gaffney draws on a contemporaneous chronicle (Pleydell & Wood, 1960) and the pamphlet literature (C.J. Post 1984; Polak 1924; Geiger 1933) to document an "extraordinary boom in both building and population," and adds his own population comparison: from 1920–40 New York City grew 32.7%, versus 13.8% for four other major New York State cities, 7.3% for five mid-Atlantic cities, and 2.8% for its New Jersey neighbors — continuing to grow through the Great Depression while every comparison group stalled or shrank.[1] He is explicit about the limits of the inference: "a sequence is not always a consequence, and in the multivariate world of economics, 'proofs' are always subject to doubt and open to challenge."[1] Gaffney also credits assessor Lawson Purdy, a former Manhattan Single Tax Club officer, with simultaneously shifting NYC's assessment practice toward valuing land first at full market value and building value as a residual — reinforcing the exemption's tax-base effect — and quotes a 1924 Stein Committee report: "There has been a tremendous increase in land assessments since 1920 in all the boroughs...Tax exemption is creating aggregate taxable values to an extent heretofore unknown in the history of any municipality," which he reads as evidence for the Physiocratic "all taxes come out of rent" (ATCOR) thesis.[1]

This episode is covered independently and in greater depth, including its causal caveats (the concurrent national 1920s building boom, permissive 1916 zoning, the absence of rent control), on the wiki's New York City's 1921–1931 tax exemption page, which draws on Gaffney's companion paper "The Resurgence of New York City After 1920" and Mary Conyngton's 1922 Bureau of Labor Statistics report. This page does not duplicate that treatment; it draws only on "New Life in Old Cities" itself, which frames NYC as one of nine parallel cases rather than the sole subject.

The Other Cities

Gaffney identifies Georgist-aligned political leadership behind growth spurts in eight more cities, arguing the NYC pattern was not unique:

• Cleveland, 1900–20 (+109%): Mayors Tom L. Johnson and Newton D. Baker raised land assessments citywide (from $180m to $500m) using W.A. Somers's "standard unit" land-value mapping system, funding a 3-cent trolley fare from land taxation.[1] A fuller, workpaper-level account of Cleveland (and of Chicago below), including material this capsule compresses away, is on this wiki's Gaffney's Georgist City-Growth Case Studies page.
• Toledo, 1890–1920 (population tripled): single-tax Mayors Samuel "Golden Rule" Jones and Brand Whitlock.[1]
• Detroit, 1890–1930: growth under Mayor/Governor Hazen Pingree, who brought Tom Johnson to Detroit to build cheap public transit; Gaffney separately notes Detroit's post-Pingree annexation-driven sprawl produced "one of the worst cases of excess subdivision in the U.S.A."[1] Gaffney's much longer 2008 essay "What's the Matter with Michigan?" — not summarized elsewhere on this wiki — carries the Detroit/Michigan story forward from Pingree through the 1975 Single Business Tax and Governor Engler's 1995 property-tax-to-sales-tax shift; see Gaffney's Georgist City-Growth Case Studies.
• Milwaukee, 1916–40: Socialist Mayors Emil Seidel and Daniel Hoan pursued "sewer socialism" — low transit and utility rates funded by land-focused property taxation, plus Somers-system assessment maps distributed to citizens.[1]
• Chicago, 1890–1930: no single leader but a dense network of Georgist-aligned figures (Governor John Peter Altgeld, Mayor Edward Dunne, Clarence Darrow, Jane Addams, Louis F. Post) and the 1894 Illinois Bureau of Labor Statistics report on landownership concentration in the Loop.[1] Gaffney's dedicated Chicago workpaper (detailed on Gaffney's Georgist City-Growth Case Studies) gives the specific 1890-1900 growth figure (+54%, with an annexation caveat) and, notably, Gaffney's own hedge that the Chicago case does not "fully add up" to a definitive showing the way the other cities here do.
• San Francisco, 1907–30 (+22% each decade, 1900–1930): recovering from the 1906 earthquake and fire with 75% of its real-estate tax base already in land value before the disaster, under Mayor Edward Robeson Taylor — who had helped Henry George edit Progress and Poverty — and later "Sunny Jim" Rolph.[1] Gaffney also reports that statewide California land assessments reached 72% of the property tax roll in 1917, during the peak years of Luke North's statewide single-tax initiative campaigns (which won 31% of the vote in 1916) — the high-land-tax-reliance baseline that predates, and stands in contrast with, the post-1978 Prop. 13 regime Gaffney discusses separately (see A Severance Tax on California Oil?).[1]
• Houston, 1911–15 (+25%): single-tax assessor J.J. Pastoriza, until a court order reversed his practice.[1]
• San Diego, 1920–26: assessor Harris Moody converted the property tax toward a land-value basis until a court stopped him — after which, per Gaffney (citing Robert Andelson), "the city skyline froze for the next 75 years."[1] [VERIFY: this specific claim is Gaffney's citation of an unpublished Andelson conference address; the wiki has not independently traced San Diego building data to confirm the 75-year figure.]
• Vancouver, 1895–1909 (population quintupled): 8-term Mayor Louis Denison "Single-tax" Taylor progressively exempted first half, then all, of building value from the property tax — which Gaffney calls "the fastest growth rate on record."[1] [VERIFY: superlative claim, not benchmarked against an independent global cross-city dataset in this pass.]

The Pittsburgh Anomaly

Gaffney treats Pittsburgh as a deliberate counter-case. Pittsburgh's "two-rate" (split-rate) property tax plan is, he notes, the most-cited example in the tax literature of a land-tax-induced building effect — citing the same Cord, Oates & Schwab, and Tideman & Plassmann studies this wiki's split-rate taxation increases construction page relies on — yet Pittsburgh's population fell sharply after 1980, "steeper than most cities" in his dataset, and "no one publishing on Pittsburgh's Plan, pro or con," had addressed the population trend.[1] He offers four explanations, none of which involve the graded tax's construction effect being false: (1) the plan taxed only the city's levy, not the overlapping school-district or Allegheny County property tax, diluting its citywide effect; (2) Pittsburgh imposed a 4% wage tax in the 1980s that survey respondents identified as a driver of out-migration; (3) unlike Cleveland, Milwaukee, or NYC, the city did not control its own assessments — the Allegheny County assessor "systematically" undervalued land, which by 2000 was reportedly only 10% of Pittsburgh's property tax base, a figure Gaffney attributes to a contract assessor (George Donatello of Sabre Systems) and a city councilman (Daniel Cohen) quoted in local news coverage.[1] Resolved 2026-07-18: independently corroborated via Mark Alan Hughes's Lincoln Institute working paper (source 7 below), which cites the same figure and attribution — "City Council [member] Dan Cohen claimed that land accounted for 10 percent of total property value in the city in 2000" — to a specific, identifiable article: Christopher Snowbeck, "Murphy: Land Tax Values Illogical," Pittsburgh Post-Gazette, January 15, 2001. The claim is now traced to a named, dated newspaper article via an independent academic secondary source, rather than resting solely on Gaffney's own citation.[2] (4) Pittsburgh's construction gains were commercial/industrial, which can compete with residential land use rather than complement it. Gaffney's conclusion is that construction growth and population growth are distinct outcomes that a partial, poorly-assessed graded tax can decouple.

The "Pro-Labor Mayors" Argument

Gaffney closes the city survey with a provocative reversal of the conventional "pro-business governance drives growth" narrative: across his cases, the fastest-growing cities (New York, San Francisco, Cleveland, Toledo, Milwaukee, Detroit under Pingree) were led by left-leaning, labor-aligned, or explicitly Socialist administrations, while "business-friendly" Cincinnati shrank over the same century (363,000 in 1910 to 331,000 in 2000).[1] This is offered as correlational political history, not as a controlled comparison; Gaffney's own causal mechanism is that these administrations happened to combine land-value taxation, low transit/utility fares, and heavy public investment — not that left-wing governance is generically pro-growth.

A Negative Case: New Orleans After Katrina

A later Gaffney essay, "Repopulating New Orleans: How did San Francisco do what a top economist says New Orleans cannot?" (Dollars & Sense, March/April 2006), uses the same San Francisco 1906-30 case above as one side of an explicit contrast — this time against a city where the same recovery did not happen, offering a negative case rather than another growth success.[3] The essay opens with Nobel laureate Thomas Schelling's post-Katrina verdict that rebuilding New Orleans was "essentially a problem of coordinating expectations" that "seems impossible" to solve — Gaffney's rebuttal is that American cities have solved exactly this "coordination" problem repeatedly after disasters (London 1666, Lisbon 1755, Chicago 1871, Tokyo 1923 and 1945, San Francisco 1906), historically through a mechanism John Stuart Mill's 1848 Principles had already identified — but that mechanism, Gaffney argues, was specifically a land-focused property tax that pressures every landowner to rebuild or sell at the same time, not "coordination" as some free-floating psychological state.[3] New Orleans differed from San Francisco, in this essay's diagnosis, not in tax structure but in wealthy absentee "bottom- fishers" buying up flooded lots to hold for a future price rise — free-riding on the eventual rebuilding efforts of others while the tax system, "as nearly everywhere else," penalized active builders and spared idle speculative holders. The essay's separate discussion of Mississippi-flood-control politics (the 1927 dynamiting of the St. Bernard/Plaquemines levee to save New Orleans, which helped elect Huey Long governor the following year) is background context, not independently verified here. Gaffney offers no tax-policy prescription unique to disaster recovery beyond the wiki's existing land-value-tax case; the essay's distinctive contribution is the comparative framing itself — speculative absentee holding as the specific obstacle a disaster-recovery "coordination" story otherwise leaves unexplained, a mechanism this wiki elsewhere treats under speculative vacancy.

Standing and Limits

Claim class. This is a historical-quantitative synthesis by a committed Georgist economist, not a peer-reviewed paper: it was self-published on masongaffney.org, not submitted to a journal, and Gaffney states plainly that "published literature on this episode, either popular or scholarly, is sparse."[1] The population figures themselves are A-claims — they are US Census data, checkable in principle — but the causal attribution to Georgist tax policy is a D-claim (interpretive/argumentative): no city-pair in the essay is matched on other growth determinants the way, say, Oates & Schwab's 15-city Pittsburgh panel is, and Gaffney's own hedge ("a sequence is not always a consequence") should travel with every city case cited from this source. The essay's strongest evidentiary contribution is not any single city, but the breadth of the pattern — nine independent cities, three countries' worth of comparison groups, spanning four decades — which is suggestive corroboration for the historical prologue to modern split-rate research, not a substitute for it. The Pittsburgh anomaly is the paper's most methodologically valuable contribution: it is Gaffney, a Georgist advocate, actively complicating his own thesis rather than cherry-picking confirming cases, and it supplies a genuine caveat — a well-evidenced construction effect (Pittsburgh) does not guarantee a population effect if the tax is narrow in scope, undermined by other policies (a wage tax), or subverted by assessment practice.

Bears On

• Benefit: Split-rate taxation increases urban construction — this paper supplies a wider historical prologue than the NYC case alone (nine cities, 1890–1930) supporting the general pattern that shifting taxation from buildings to land coincided with growth, while its Pittsburgh section adds an explicit counter-nuance: the same graded-tax city that anchors the page's Pennsylvania construction evidence saw population decline, for reasons (partial tax scope, a wage tax, county-level assessment capture) distinct from the construction question itself.
• Problem: Land underuse and speculative vacancy persist in high-demand cities — the San Diego and Houston episodes, where courts halted a land-value assessment shift and (per Gaffney's secondary citation) building activity subsequently froze, are a historical illustration of the reverse mechanism this page documents: removing land-tax pressure removes the holding-cost incentive to develop or sell, consistent with the page's real-option account of why land sits idle.

See Also

• Gaffney's Georgist City-Growth Case Studies — fuller workpaper-level detail on the Cleveland and Chicago cases, plus Detroit/Michigan (1890-2008) and Johannesburg/Cape Town, not covered by this survey
• San Francisco — the city's own page, covering this 1906 rebuild episode alongside modern-day supply-constraint and land-value evidence
• Split-rate taxation increases urban construction
• Land underuse and speculative vacancy persist in high-demand cities
• New York City's 1921–1931 Tax Exemption for New Housing — the deeper, independently-sourced treatment of the flagship NYC episode
• A Severance Tax on California Oil? — Gaffney's note on California's pre-Prop-13 land-value tax reliance
• Mason Gaffney — the author
• Split-rate taxation · Land Value Tax
• Henry George — the movement Gaffney credits as the common thread across all nine cities

Sources

1. Mason Gaffney, "New Life in Old Cities: Georgist Policies and Population Growth in New York City, San Francisco, Chicago, Cleveland, Toledo, Detroit, Milwaukee, Pittsburgh, and Other Cities, 1890-1930," masongaffney.org, emended 10-22-2006 — used for the entire page: the abstract's thesis, the NYC 1920–40 population comparisons and the Stein Committee quotation, the eight other-city case summaries, the Pittsburgh anomaly and its four explanations, the "pro-labor mayors" argument, and Gaffney's own methodological hedges. PDF · archived (verified against the PDF directly for all direct quotations on this page).
2. Mark Alan Hughes, "Why So Little Georgism in America: Using the Pennsylvania Case Files to Understand the Slow, Uneven Progress of Land Value Taxation," Lincoln Institute of Land Policy Working Paper WP06ZK1, 2006 — fetched and read this session; used to independently corroborate the Pittsburgh 10%-of-base land-value figure and its attribution to city councilman Dan Cohen (p. 14 of the working paper, its own endnote 42), and to trace that claim to its underlying newspaper article: Christopher Snowbeck, "Murphy: Land Tax Values Illogical," Pittsburgh Post-Gazette, January 15, 2001. PDF (Lincoln Institute)
3. Mason Gaffney, "Repopulating New Orleans: How did San Francisco do what a top economist says New Orleans cannot?," Dollars & Sense, March/April 2006 — used for the New Orleans negative-case section above (Schelling's "coordination" verdict, the absentee-bottom-fisher mechanism, and the 1927 levee/Huey Long background). Read in full 2026-07-18; no prior wiki coverage. Free PDF (masongaffney.org); local mirror at sources/gaffney/text/RepopulatingNewOrleans.txt.