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If it moves, tax it; if it keeps moving, regulate it; if it dies…

Now available thanks to Stephen Smith at Market Urbanism:

I apologize for the lack of posts for the last few days – I just moved to DC (a few blocks north of H Street, right by Gallaudet, if anyone’s curious), and I have yet to begin another rewarding relationship with Comcast. But, I’m here at work (I started interning at Reason magazine today), and I’ve got some free time, so I wanted to post this excerpt from Fogelson’s Downtown (I’m almost done!) that illustrates perfectly the shift from the second to last phase of Reagan’s joke about government, as applied to housing policy:

If neither public authority nor private enterprise could overcome the obstacles to urban redevelopment on its own, perhaps they could overcome them by working together. Or so the downtown business interests and their allies hoped. The trouble was that public authority and private enterprise were not used to working together. Through the mid nineteenth century public authority had routinely joined forces with private enterprise to stimulate economic development. But later this practice gave way to what might be called, for lack of a better term, an adversarial arrangement. Under this arrangement, public authorities granted private companies a franchise to build and operate the street railways, gas systems, and other public utilities other than the waterworks. They also regulated these companies. Under the watchful eyes of the courts and state legislatures, public authorities regulated the building industry as well. They established fire zones, drafted building codes, imposed height limits, and formulated zoning regulations. They also granted building permits – and, at least in theory, inspected everything from elevators to fire escapes.

This adversarial arrangement was the subject of a nationwide debate in the early twentieth century. Some Americans attacked it as one of the principal sources of corruption in cities. Others defended it as the most ...

Read the whole thing at Market Urbanism.

Parking lots as tax arbitrage during the Great Depression

Now available thanks to Stephen Smith at Market Urbanism:

I’ve learned a lot from Fogelson’s Downtown, but one thing that I had absolutely no idea about before I read this book was how Depression-era tax policies encouraged downtown landlords to tear down their buildings and replace them with parking lots (emphasis mine):

By the mid 1930s the owners of Detroit’s Temple Theater, a nine-story office building that had once been the home of the city’s most successful vaudeville house, had had enough. In a city reeling from the Great Depression, the vacancy rate for office buildigns was running between 35 and 40 percent. With tenants hard to find – and rents, which had been falling steadily, hard to collect – the Temple Theater no long paid. In an attempt to lower property taxes and operating expenses, its owners did what other downtown property owners in Detroit and other cities had done. They demolished the building and turned the site into a parking lot. [These] were commonly referred to as “taxpayers.” The “taxpayers” were as much a legacy of the depression as the “Hoovervilles,” bread lines, soup kitches, and dance marathons. They symbolized downtown in the 1930s as much as skyscrapers, department stores, and high-rise hotels had in the 1920s. [...]

Things were much the same in downtown Los Angeles, where so many buildings were torn down and replaced by parking lots or “taxpayers” in the 1930s that by the early 1940s roughly 25 percent of the buildable land was used to store autos. In a business district of less than one square mile there were no more than nine hundred parking lots and garages, with space for more than sixty-five thousand cars. [...]

By tearing down the buildings, the owners could lower their tax bills and reduce their operating expenses. By replacing them with parking ...

Read the whole thing at Market Urbanism.