Economy is no drag on vacancies
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#1 Aug 5, 2008
Interesting that even in a tough economy, commercial rents are holding up well.
Landlords make out well. They supply the buildings, well maintained, with plenty of internal amenities -- for which they deserve to be compensated, and which they should, if they manage them well be able to make a profit.
But they don't supply the land on which those buildings sit, and for the life of me (and the rest of us!) I can't figure out why we permit landlords to keep such a large share of the economic rent on the land. That should be our common treasure.
We ought not to tax buildings -- commercial or residential -- at all, and/but we ought to place all of our local taxation on the value of the land.
Downtown land is very valuable -- probably even more valuable than the October 1, 2007 showed.
And if we could just tax that land value, without taxing the buildings at all, we might be very close to using the tax perfect for creating a healthy city.
Unfortunately, unlike Pennsylvania, Connecticut lacks the enabling legislation, so we must tax land and buildings and outbuildings and "extra features" like parking garages.
When we tax land value, not one acre leaves town.
When we tax buildings, our older buildings get torn down, and there is no particular incentive to put another in its place. The land sits unused, benefiting no one except the land speculator.
But we can light a flame under the speculator -- a gentle one at first, but a hotter one as land values increase -- if we simply put more of our tax burden onto the land.
The Marriott sits on a piece of land roughly the same size as the famous Hole in the Ground. The Marriott employs hundreds of people, and provides rooms, meeting space and meals for hundreds of others every day. The Hole in the Ground serves no one. NO ONE! How do we tax them? We treat the Marriott as if having a building were something to be penalized for. We treat the owners of the HITG as someone who deserves subsidy, in the form of lower taxes.
What do you suppose would happen if we untaxed Marriott's building, and equalized the taxes between the two properties, since their land value should be about the same?
The land speculator(s) who own the HITG would find themselves motivated to put that land to good use. NOW. Not next year, not when it eventually suits them to accept graciously the so-called capital gains created by all the public spending -- local, state and federal -- which makes that site more valuable year by year.("Capital" gains which we only tax at a very low rate) And we would only ask them to pay 0.35% of the price they receive, in the form of a transfer tax. The other 99.65% is theirs to keep!
Aren't we generous?
Should we be generous to land speculators? I don't care much whether they live locally and visit their land every day, or live at a distance and haven't seen it for years (we must drive or walk around fallow downtown land every day -- a pothole in our development, harming us all); I don't care whether it is a "sentimental" family trust or a pension fund, or an REIT with thousands of owners, or Harvard's or Yale's endowment. THEY DON'T DESERVE TO TAKE OUR ECONOMIC RENT OUT OF TOWN! We create it, and it belongs here, to be recycled to provide public goods HERE, not private treasure for anyone, anywhere.
Let's correct the tax laws, and untax buildings, wages, sales, and tax heavily our land value to fund the very services which make Stamford a good place to live and to conduct business.
Buildinglords can and should make legitimate profits. But let's take the windfall profits out of landlording. Landlords don't create anything.
#3 Aug 5, 2008
Stop listening to brokers who are trying to hold up this soft market. Do not let them fool you...the office market in stamford is DEAD. Stop counting the money of these corporations. They have an obligations to their shareholders and employees to do their best to make a return on their investment. WHO ARE YOU TO TELL THEM HOW MUCH PROFIT THEY SHOULD TAKE! Damnit. This is exactly why Stamford has become a second class city.
#4 Aug 5, 2008
I agree and for the second time I posted story about RBS and it got deleted again. Im going to post it again and we will see if it gets deleted.
#5 Aug 5, 2008
Wow 3 times in a row ill have to repost the RBS story in the morning.
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