Pittsburgh missed the housing bubble
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10/28/2010
[Defective web page: It tried to make me select a city from a non-existent list of cities, so I had to change the category to state.]
Pittsburgh is one of the most affordable cities in the country, largely because it missed the housing bubble that plagued cities like Las Vegas and those in California.
Why? Because when California was curtailing the property tax, Pittsburgh was shifting the tax burden onto the value of land. The cost of holding vacant and underdeveloped land fell in California and rose in Pittsburgh. Meanwhile, California adopted other taxes that actually cost most ordinary citizens far more than the property tax would have cost them, while home owners in Pittsburgh were paying less under the land value tax than they would have paid under property tax.
The result was just as many had predicted. Speculators swarmed on California like locusts, while Pittsburgh speculators either developed vacant lots or sold them off to developers. While California was having a real estate tax boom, Pittsburgh was having the nation's only construction boom that was not accompanied by a land price boom.
Now that the land price boom has gone bust, Pittsburgh's real estate prices remain stable. Unfortunately the county that assesses Pittsburgh's land values has botched the land assessments, forcing the city to abandon its land value tax and return to conventional property tax. Still, this happened too late for the boom to hit Pittsburgh, and land value tax saved us from the bust.
Dan | Pittsburgh, PA