A new report from the New York Federal Reserve Bank looks at land price patterns around their metropolis (specifically, New York City less Richmond, plus ten New Jersey counties). Like Barker’s work noted here last year, they used sales of vacant land to indicate the value of land in general. But while Barker’s purpose was to estimate total land value and land rent, the New Yorkers’ objective is to see how land prices relate to parcel location and other characteristics, and describe trends over the 1999-2006 period.
Defining the center of New York as the Empire State Building, of course they found that the distance thereto is inversely proportional to land value. They observed a very sharp increase in average prices, from $46.65 in 1999 to $366.08 in 2006, with the increase especially pronounced in land intended for residential use. Of course this rate of increase cannot be sustained, as a subsequent analysis might document.
The paper notes that even vacant land may be “improved,” for instance by having been graded and having utilities. Improved lots of course are more valuable than otherwise identical lots. So do Georgists want to tax the improved value or the “raw” value? I think it was William Vickerey who pointed that this really isn’t a big problem. Either could be used as a base, as long as assessment practice is consistent.
Thanks to Richard Biddle and CityEconomist