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I want to point out that this is not really about revenue generation but about fairness -- the law requires that property be valued at market value, and so that's the policy that should be followed.

As for revenue, that's a political decision. The thing is that elected officials control the tax rate, not SDAT. SDAT only values the properties.

Rising property values don't have to mean rising taxes, the elected officials can lower the tax rate in response -- this what the term "no new revenue rate" is for.

It's also not just about pushing tax burden onto vacant lots. When property A is undervalued relative to property B, property B picks up more of the property taxes. So if a lot of vacant land is undervalued, that means a lot of improved land is paying more taxes proportionately. It seems sub-optimal that property where nobody lives is given a tax subsidy and the difference is realized in rising taxes for everyone else.

The main point is that the law requires that everyone be valued at market rate. That should be done first. Then any special case exemptions, write-downs, discounts, and the tax rate itself, should be handled at the political layer, where they are explicit and conscious rather than implicit.

We can debate what the relative impact of this is in the big picture, but this seems like something that is worth fixing.

> fairness -- the law requires that property be valued at market value, and so that's the policy that should be followed

True but the law can’t bend physics on this: what is fair market value? One interpretation is, whenever FMV appears in policy, something is broken.

One way to measure fair market value is too look at similar recently sold properties, which they did in the article.

Ha ha, define similar. Real estate is the quintessential non fungible market. I guess my point is, look deeper than the surface at any aspect of this problem, and discover political decisions pretending to be objective ones.

That is a fairly weak proxy. People buy and sell for different reasons; they can achieve pretty different prices accordingly.

> I want to point out that this is not really about revenue generation but about fairness -- the law requires that property be valued at market value, and so that's the policy that should be followed.

Then you're saying it's not about fairness either. It's about following the law better, however it's written.

> Speculation is less profitable than development, If you're getting speculation it's because the roi vs risk of development isn't justifiable.

Arguably, speculation should always be unprofitable and we should ideally regulate against it in every way, shape and form. I'd ask what purpose does holding onto a unproductive piece of land serve at all to society beyond an easy to grease financial vehicle?

Ask yourself why and by what/who the incentives of living in society have been so thoroughly perverted that there is demand for "unproductive" (seriously, listen to yourself, this stuff is a liability) land for "finance bullshit magic" reasons? The perversions are what prevent "buy and do something to generate value" from outcompeting "buy and hold".

There's tons of good speculation. Speculators are not buying and selling land, or corn futures, or what have you.

They're trading risk.

Sell to a speculator and you turn an uncertain future into cash right now.

Buy from a speculator and you get to enter the market at the moment of your choice.

It unlocks specialization - house builders can focus on building houses, and corn farmers can focus on growing corn. As soon as they're done with a house / harvest, either a consumer or a speculator buys it and they can focus on producing the next house/crop. Without speculators, they'd have to not only do their value-add, they'd also have to predict the market and hope enough customers show up in future. With speculators, this is significantly mitigated.

Buy from a speculator and you get to enter the market at a price of their choice.

Vacant land is land that somebody could have built a home or a restaurant or a storefront or an apartment complex on, except it's being hoarded by speculators, who often refuse to sell at a loss.

> could have built [something] on

In order to build a home / restaurant / storefront on that land, you first have to buy it. Buy it from whom? Ban speculators, and now you have to buy that land from the original owner, who is obligated to hold on to it even though he may want to use his capital for something else.

> refuse to sell at a loss

Speculators who won't sell at a cash loss are a real problem, but it's a problem that can easily solve itself. As the land value fluctuates up and down, the speculators' investment also goes up and down, whether he sells at that price or not. Carrying a piece of land on your books at a loss inflicts economic damage on the speculator.

In a free market, bad investors getting wiped out is just as important as useful ones getting rewarded.

Simply make the "default setting" to allow building things everywhere, and stupid speculators will go out of business more or less instantly. Useful ones will continue to quite literally make money for themselves and society.

No need to ban speculators, just tax them fairly as the article suggests.

> Buy it from whom? ... now you have to buy that land from the original owner, who is obligated to hold on to it even though he may want to use his capital for something else.

There's no obligation to "Own" land, if you want to put your capital elsewhere then either use your existing land as collateral for a loan or otherwise sell it. Technically everyone is actually leasing land from a government, it's not a commodity and it has a finite supply, so unlike corn or even housing, what is a speculator even speculating on?

I also want to be clear I think it would be very silly to ban speculators, the act of speculation is something that we all do when we own literally anything, but speculating on limited finite ground space that no one actually owns doesn't make any logical sense. Just properly tax speculation into a space that is unprofitable to hoard.

> As soon as they're done with a house / harvest, either a consumer or a speculator buys it and they can focus on producing the next house/crop. Without speculators, they'd have to not only do their value-add, they'd also have to predict the market and hope enough customers show up in future. With speculators, this is significantly mitigated.

Sounds like a great way to over or undershoot demand leading to market inefficiencies which the speculators have a perverse incentive to increase. It may be useful for a market like agriculture where production is variable and the produced goods are perishable - the loss from speculators may be less than the inefficiencies of noise. However, we've all seen how broken the real estate market has been despite the continued presence of land being one of the least variable things we encounter.

The real estate market got borked by the fact that municipal authorities answer to incumbent owners, who ~universally acted to limit new building. This breaks the mechanism by which some speculators go out of business.

If you can build anywhere, and a speculator is blocking development of a prime piece of land, you'll simply build elsewhere, making that land less prime with each passing moment, and eventually driving the speculator out of business.

Oh, don't worry, we have some lovely storage facilities here. It's just that there's only so many that you can build.

I'm not sure that the city owning a lot of land is actually a bad thing, compared to the current situation where it just sits there and rots. It's not like Baltimore has the best results doing things, but the alternative is clearly very bad.

Other cities have established chartered “development corporations” to utilize underutilized assets and resources like land and make good uses for them.

They have been good for low income housing (often at the expense of lower income housing), low rent commercial spaces, low rent industrial spaces, amusement parks, real estate development, etc.

But this is gentrification and if you think it is necessary, then very quickly you will realize it is a problem. It homogenizes neighborhoods to support only a certain class of people while destroying other people.

Yes, they make it so difficult to develop that you must sell to the city so their development corporation can hand out contracts to city cronies with kickbacks. Tax dollars at work, lol.

The city doesn't have to own the lots long-term. They could divide them among neighboring lots.

I challenge you to find me an example of a city making that routine practice in any capacity. That would be a huge administrative PITA, say nothing of the perverse incentive it creates (regardless of if it's a forced sale).

> Tangentially, the author forgets that the reason cities like Baltimore adopted such policy was to encourage the bulldozing of uninhabitable structures lest they become less than legally inhabited.

This is interesting, do you have a source for this? Normally the assessors are tasked only with setting a value of a property and not with any type of policy related to rate or discount.