City officials tend to think of tax yield on a parcel-by-parcel basis. That’s like analyzing agricultural yield “per farm.” When analyzed per acre, the differences in types of urban development become very clear, says Joseph Minicozzi of Urban3 .
Minicozzi looked at the county property taxes paid on various kinds of development in 12 communities across the US. (County taxes are generally paid even in cities, and are more consistent than, say, school taxes in various states.) …
The lesson, as Minicozzi sees it, is that governments should encourage dense, mixed-use development — common in downtowns — and take a critical view of lower, large-acreage projects farther away from the core. Governments, in his view, should evaluate development on tax revenue per acre rather than on the value of the individual property. The image below makes the difference clear:
The 3-D map of downtown Asheville, NC, shows not the height of buildings but the tax yield per acre, which is highly variable. Two buildings of similar value, adjacent to each other, yield hugely different tax revenues per acre. The building on bottom, a hotel, has a large surface parking lot and much lower revenue per acre, revealing the public loss from parking.