The Land Value Tax Plan

WHAT IS THE LAND VALUE TAX PLAN?

For too long, an outdated property tax code has unfairly burdened Detroit homeowners and small businesses while rewarding land speculators and encouraging blight. 

That needs to change.
Through an innovative proposal called the Land Value Tax Plan, Detroit and other communities can take a forward-looking approach to provide long overdue relief to homeowners and encourage growth and reinvestment.

The Land Value Tax Plan would give local communities like Detroit the CHOICE to use an innovative and fairer way of applying their taxes. If enacted, the Land Value Tax Plan would allow the City of Detroit to:

• Reduce property taxes for 97% of Detroit homeowners
• Encourage economic growth across Detroit
• Incentivize improvements in homes and businesses
• Encourage investment in neighborhoods
• Discourage land speculation, scrapyards and neighborhood eyesores
• Reduce blight 
• Reward small businesses and spark development
• Protect local services like police, fire and schools

In Pennsylvania, 17 communities have implemented programs similar to the proposed Land Value Tax Plan. The results: reduced tax bills, increased home values, fewer tax foreclosures, more business starts, and more inclusive economic development. 

“The land value tax is a fiscal shot in the arm for the city. It could catalyze a lot of great things.”  — Josie Faass, Robert Schalkenbach Foundation executive director (Crain’s Detroit Business, May 25, 2023)

HOW DOES THE LAND VALUE TAX PLAN WORK?

The Land Value Tax Plan simply allows a municipality, with the approval of its residents, to replace certain tax rates for homes and property structures with a higher rate of tax on land. This would target unused, unproductive, or vacant land while providing the following benefits to homeowners and businesses:

• Permanent property tax relief 
• Freedom from dependence on tax abatements
• Long-term stability and incentives for staying in the community

In Detroit, owners of blighted  buildings and vacant lots pay less than their fair share of taxes – often less than homeowners – despite requiring a municipality like Detroit to spend taxpayer dollars on maintenance and inspections. Unlike homes and small businesses, vacant lots and scrap yards are a drain on local communities, siphoning scarce resources and encouraging blight.  

Because of an outdated tax code, homeownership and development are simply too costly in some communities. In Detroit, for example, fewer than 50 single-family homes were built between 2017-2022 because maintaining homes and developing housing is cheaper in surrounding communities. 

That can finally change with the Land Value Tax Plan.

HOW CAN WE ENACT A LAND VALUE TAX PLAN IN DETROIT?

The Michigan Legislature can allow for real tax relief for homeowners and small businesses through legislation that allows cities like Detroit the choice to adopt the Land Value Tax Plan.

This legislation would help local governments maintain a stable revenue stream and discourage blight and land speculation. And while the Land Value Tax Plan may not be the right choice for every community, research shows it would be a major boost for Detroit. 

Here’s a major study that highlights the enormous benefits of a Land Value Tax approach in other communities. 

The legislation would empower local voters in municipalities to decide whether the Land Value Tax Plan is right for their community. 

Check back at this website to receive updates on the status of legislation enabling the Land Value Tax Plan.