Development Taxation and Conversion of Low Intensity Land Uses on the Urban Fringe

Dennis C. Cory

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DOI: 10.2190/7VJV-W0CB-XWFY-1ER8

Abstract

Failure to adequately account for the user cost component of land use changes can lead to the premature and irreversible conversion of low intensity land uses to higher intensity use on the urban fringe. Development taxation (i.e., the imposition of an ad valorem tax on the transaction of converting land to higher intensity use) has been advocated as a practicable land use tool for guiding the land conversion process both spatially and temporally. This article argues that sole reliance on this taxation technique is unwarranted since important sources of inefficiency are introduced by uncertainty, irreversibility, and political feasibility considerations inherent in the development process. The advantages of integrated land use programs, utilizing a mixture of incentive and regulatory control tools, are discussed.

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