The other thing people often forget is that the 'land value' is also a measure of the city's well-being.
Those big spikes you see in the center? They cost very little for the city to maintain, and generate oodles of tax money.
Those big, wide areas out towards the fringes? They generate next to no tax income and cost a lot to maintain.
The urban subsidizes the sub-urban. The sub-urban lifestyle would be completely impossible without the ultra-dense urban centers. If planners and citizens don't keep that in mind, you can easily end up with an insolvent city budget that is bleeding from maintaining all the utilities and roads stretching out to the exterior.
Most true suburbs aren't within the big city limits, so I'm not sure your point is well-founded. For example, in the DC area, the suburbs aren't even in the same state as the city and yet the suburbs seem to be thriving.
Those suburbs outside the city limits still need money. They get it from state and federal funds which were mostly collected from people in the city limits. For example the Highway Trust Fund as one of many examples. If you check the per capita spending, it's higher for suburbanites than urbanites but the urbanites are putting in more money.
The Bronx is sub-urban? As someone else noted, Manhattan and The Bronx are totally different in ways that probably has little to do with population differently.
Utilities and roads out into the suburban may be underpriced, but there’s a dark side to cities too. The suburbs and rural areas are often where people can afford homes.
I’ve had this hypotheses for a long time that the car is, at least economically, only incidentally about mobility. In reality it’s a tool for obtaining leverage in the real estate market.
Without sprawl urban landlords would have a captive audience and would extract all surplus. See: the law of rent.
I have a related hypothesis that the car drove the mid century middle class explosion in the US and some other countries, not by providing car jobs or any of the other conventional mechanisms but by allowing people to escape the law of rent.
Telework does this today for those who can use it, allowing people to leave high cost cities where good jobs are concentrated. The car did that until we reached the scaling limits of sprawl.
Also why I am a huge fan of Georgist taxation. Unfortunately we are moving in the opposite direction, taxing productivity and investment and wealth instead of taxing land and rent.
Yeah well the problem is that after a moderately prosperous person buys a car and a house out in the suburb, the act of having spent half a million dollars makes them believe that they are entitled to drive their car into the city and enjoy the commerce and culture that the city fosters, plus free parking and toll-free roads and subsidized gas. None of those are great! In my town this manifests as people who live just over the county line in unincorporated places who nevertheless feel entitled to participate in city deliberations over road design and parking policies.
But I'm not a fan of these particular maps because the use of 3d makes them harder to read. The isometric view and rotation away from north at the top break conventions that people use to orient themselves in the map and connect it to their lived experiences on the ground. I'm reasonably familiar with NYC geography, and I could not immediately recognize the landscape I was looking at in these maps. Ironically, it was only because I already knew the answer to the question that I could do so: "oh that huge green spike must be Manhattan".
I think a 2d choropleth map with a diverging color scale centered on the mean value would work better.
+1. Also, I had to go look at their interactive viewer because that color scheme choice (dark purple = low, light green = high) seemed 100% bonkers. It's the legit "plasma" scheme, but based on my limited experience with colorbrewer schemes, I was confused.
The main purpose of the 3D is to communicate the extreme differences in scale of value, which chloropleth alone doesn’t always get across as it flattens the magnitude disparity. Keeping true north to avoid confusion is a good point.
Yeah, I agree. And if the surface is complex the Z features tend to obscure the complexity. I make maps like these for the cities of Berkeley and Oakland, but I use a color scale. And I usually aggregate at a larger granule than parcels. For e.g. https://observablehq.com/@jwb/2024-25-berkeley-property-tax-...
This is mostly a result of zoning, isn't it? The high land value areas are the ones where you're less prohibited from building taller buildings. If the thing people actually want is indoor space then the piece of land where you can build a skyscraper is worth a lot more than the one which is limited to a single family home.
Someone should probably tell the homeowners with a high ratio of land to house who like to see their property values increase.
It's not just zoning, though that exacerbates it. City centers are where economic activity tends to be concentrated so even without zoning you would see these exponential land value effects as you approach the centers of economic activity (and indeed, we did see these same relative patterns prior to the passing of modern zoning laws).
Weren't transportation and communication a lot slower if you go that far back? Zoning laws started getting imposed not long after the invention of the telephone and the internal combustion engine and before either of them were in the possession of the majority of people.
The value of land in an urban area is obviously going to be higher than it is in a rural area just as a matter of scarcity, but it's not at all obvious that the reason it's currently so much more expensive in Manhattan than in the places directly adjacent to it isn't primarily a result of zoning just because that might not have been the reason in 1890.
If you're talking about the Manhattan effect specifically, I'm sure that zoning has a large effect on the extremeness of it. If you're talking about "land gets exponentially more valuable in the city center", then you see that pattern everywhere and indeed we saw it in the historical pre-zoning period as well. Agglomeration effects are sticky regardless of what time period you're in, what changes is the coefficients on the exponential equation.
You keep saying "exponentially" but let's look at the median rent for e.g. a 1 bedroom in Manhattan vs. the Bronx. It's around twice as much in Manhattan, because now you're measuring prices per-unit of indoor space rather than per-acre of land.
In a formal sense you can call this exponential. It's twice as much in Manhattan as the Bronx and twice as much in the Bronx as in some location even further out. But if you're trying to explain the >100x difference in the price of land between the Bronx and Manhattan, the ~2x difference in how much people value living there because of agglomeration effects is not the dominant effect.
And you would expect the densest places like Manhattan to have the strongest agglomeration effects. You can ratchet up permissively zoned land costs through zoning just by increasing the level of restrictions elsewhere, e.g. ban >2 story buildings instead of banning >5 story buildings, but the willingness of people to pay more in order to live near things is proportional to the number of things they would be paying more to live near.
On top of that, the zoning restrictions exacerbate the agglomeration effects. If you could build taller buildings in the places you currently can't then the premium commanded by housing in a dense area would go down by increasing the supply of it.
> "1. People have wildly incorrect intuitions about where land value is concentrated"
Fwiw this sort of land value gradient has been studied in economics for ages. See papers on monocentric city model, going back to Alonso (1964), Muth (1969), and Mills (1967). Or even further back, von Thünen was talking back in 1826 about how land values spike as you get closer to the marketplace.
Author here. Our blog generally concerns property tax reform for our regular readership which is admittedly less clear to a new reader coming in cold: the intuitions I’m referring to is the average homeowner kind of assumes any tax reform (such as shifting taxes off buildings and onto land) is designed to impoverish them personally. The purpose of these maps is to show such people where land value in cities is really concentrated - Ie, not the m the suburbs. Mono centric city value might be intuitive to academics, but it’s not among regular everyday people.
Do you mean people underestimate how steep the gradient is, or they don't know it at all?
It seems kind of dubious to me that "everyday" people don't understand that land in cities is worth more than land in suburbs. It seems very transparent that you get a smaller lot size for the same price.
Both. They do understand that it’s worth “more” in the city but they vastly underestimate the magnitude, and they vastly underestimate what that means in terms of where the total bulk of land value is concentrated, and therefore what the distribution of winners and losers will be in any tax shift scenario.
> I was waiting to read about what these "wildly incorrect intuitions" were, but it's never explained. The maps correctly matched my own intuitions.
If you are into land value tax discourse maybe, but from my experience at least there is a big lack of awareness of the impact of economic activities on land values as they are not reflected by anything that people get in contact with. That's especially true because neither rents nor property taxes (the one thing people might have exposure to) fully capture it.
Same. My assumption, before seeing this, was "ok, I'm going to guess land in a city is worth 100 or 1000x land anywhere else", and I guess I overestimated a bit.
This is great, and it also feels like a great way to answer the question "Where should I buy a house if I want to be close to the center but not in the expensive area?".
> Let’s play a guessing game. How much more valuable is land in Manhattan than in the Bronx? Take a guess, then scroll down for the answer.
As someone who has never been in New York and doesn't live in the US, I knew beforehand that I would fail this test very hard, haha.
Manhattan is where basically everything you might associate with New York is (Empire State building, World Trade Center, Times Square, Central Park, etc.). The Bronx is where Jennifer Lopez reminds us that she came from as she keeps it real.
The writer mentioned that people's intuitions about the distribution of land and where it's most valuable are wildly off, what exactly are people's intuitions that run counter to the data presented? It seems fairly intuitive to me that property values, as you get closer to an urban center
Author here: most people know that the city is "more" valuable, but drastically underestimate how valuable. I've asked people how much more valuable they think Manhattan is than the Bronx and they will say things like "5x" or "10x", which is off by an order of magnitude.
They also underestimate what this means. In many cities you can have 50%+ of land value concentrated in a rather small portion of area, and this has huge implications for what would happen is you, say, changed property tax policy to shift the tax burden towards land and away from buildings. Most people assume it would kill the suburbs, but in many of our models single family homes come out slightly ahead, or stay neutral.
Is "land value" the right term here? The NYC example uses assessed property value, which I think is a function of both the land under a property and the building itself. In that case, these "taller means more valuable" graphics are at least partially reflecting the fact that a tall building is probably more valuable than the short one next to it?
Land and "improvements" are assessed separately, and I believe this is plotting just the assessed land values. In the small text about each map, it says to use the settings to switch to full assessed value or improvements. But still, it's very hard to actually assess land value in an area like Manhattan where there are basically no land-only transactions
Municipal costs per resident are effectively the inverse of these maps because the more spread out people are the more roads, pipes, etc are required to reach them.
We're directly inspired by Urban3 and our hope in releasing these tools is to enable more people to be able to do this work directly themselves and share it with their elected officials!
A minor thing - I know that article is part of a broader body of work and is not meant to solely present your ideas by itself. But nonetheless, since you linked to it, I had to scan down quite a bit to answer the question that was immediately on my mind: "tax reform for what purpose and why?"
And, an aside, I'd personally recommend getting rid of the emoji bullet-point additions: in this day and age, well, you know.
How much the land is worth is only one of the parameters.
Notoriously, the maintenance cost for suburbs and their infrastructure is significantly lower than the tax they bring. Shouldn't that be a major point un tax decisions?
I've seen it argued both ways and I've yet to see real evidence, especially considering many suburbs are themselves actually cities/towns, and that cities seem to fight tooth-and-nail to prevent suburbs from leaving.
Have you ... looked for evidence? I guess I always felt that it was self-evident that horizontal development costs way more in terms of roads, pipes, and wires, and at the same time raises almost nothing in terms of revenues. Residential-only development patterns never pay their own way. https://resources.environment.yale.edu/kotchen/pubs/COCS.pdf
I've looked a few times, and it quickly (at least to me) appeared to depend on what you bucket and where you can torture the data and make it confess.
Single buildings can cost as much as my entire "city" - one World Trade Center alone cost $4 billion.
An example of how you can bucket things is do you look at property tax, income tax (and if you do, is it where the "nexus of generation" is done, where the worker lives, where he works, where she's headquartered, etc). Around here basically none of what we would call "support" is paid for by property tax except schools (95% or so) and sewer (which is billed as a property "tax" though it's actually per connection/size).
In my town schools aren’t 95% of property taxes but they are the majority. Add emergency services, water (though that’s a separate bill), same for electricity. Less familiar with road and bridge maintenance. Assume some comes from the state and feds but at least some is local.
That's exactly the point. On big vertical building covers 1 acre of land but it has 80 acres of interior space. There's one honking water pipe in the basement that will never need to be replaced, instead of mile after mile of water pipes with leaky fittings every 50 feet.
You have it backwards. Suburb infrastructure is expensive and the land pulls in little tax money by comparison. They're almost always a net loss on the city's budget.
Note that the site that generated these does not support any San Francisco Bay Area cities. I learned this only after being forced to "Sign in with Google".
The other thing people often forget is that the 'land value' is also a measure of the city's well-being.
Those big spikes you see in the center? They cost very little for the city to maintain, and generate oodles of tax money.
Those big, wide areas out towards the fringes? They generate next to no tax income and cost a lot to maintain.
The urban subsidizes the sub-urban. The sub-urban lifestyle would be completely impossible without the ultra-dense urban centers. If planners and citizens don't keep that in mind, you can easily end up with an insolvent city budget that is bleeding from maintaining all the utilities and roads stretching out to the exterior.
Most true suburbs aren't within the big city limits, so I'm not sure your point is well-founded. For example, in the DC area, the suburbs aren't even in the same state as the city and yet the suburbs seem to be thriving.
Those suburbs outside the city limits still need money. They get it from state and federal funds which were mostly collected from people in the city limits. For example the Highway Trust Fund as one of many examples. If you check the per capita spending, it's higher for suburbanites than urbanites but the urbanites are putting in more money.
DC is an exception, most American cities have large swaths of suburbia within the city limits and even larger ones within the same state.
The Bronx is sub-urban? As someone else noted, Manhattan and The Bronx are totally different in ways that probably has little to do with population differently.
Utilities and roads out into the suburban may be underpriced, but there’s a dark side to cities too. The suburbs and rural areas are often where people can afford homes.
I’ve had this hypotheses for a long time that the car is, at least economically, only incidentally about mobility. In reality it’s a tool for obtaining leverage in the real estate market.
Without sprawl urban landlords would have a captive audience and would extract all surplus. See: the law of rent.
I have a related hypothesis that the car drove the mid century middle class explosion in the US and some other countries, not by providing car jobs or any of the other conventional mechanisms but by allowing people to escape the law of rent.
Telework does this today for those who can use it, allowing people to leave high cost cities where good jobs are concentrated. The car did that until we reached the scaling limits of sprawl.
Also why I am a huge fan of Georgist taxation. Unfortunately we are moving in the opposite direction, taxing productivity and investment and wealth instead of taxing land and rent.
Yeah well the problem is that after a moderately prosperous person buys a car and a house out in the suburb, the act of having spent half a million dollars makes them believe that they are entitled to drive their car into the city and enjoy the commerce and culture that the city fosters, plus free parking and toll-free roads and subsidized gas. None of those are great! In my town this manifests as people who live just over the county line in unincorporated places who nevertheless feel entitled to participate in city deliberations over road design and parking policies.
The overall claim is true - yes put it on a map.
But I'm not a fan of these particular maps because the use of 3d makes them harder to read. The isometric view and rotation away from north at the top break conventions that people use to orient themselves in the map and connect it to their lived experiences on the ground. I'm reasonably familiar with NYC geography, and I could not immediately recognize the landscape I was looking at in these maps. Ironically, it was only because I already knew the answer to the question that I could do so: "oh that huge green spike must be Manhattan".
I think a 2d choropleth map with a diverging color scale centered on the mean value would work better.
+1. Also, I had to go look at their interactive viewer because that color scheme choice (dark purple = low, light green = high) seemed 100% bonkers. It's the legit "plasma" scheme, but based on my limited experience with colorbrewer schemes, I was confused.
The main purpose of the 3D is to communicate the extreme differences in scale of value, which chloropleth alone doesn’t always get across as it flattens the magnitude disparity. Keeping true north to avoid confusion is a good point.
Yeah, I agree. And if the surface is complex the Z features tend to obscure the complexity. I make maps like these for the cities of Berkeley and Oakland, but I use a color scale. And I usually aggregate at a larger granule than parcels. For e.g. https://observablehq.com/@jwb/2024-25-berkeley-property-tax-...
This is mostly a result of zoning, isn't it? The high land value areas are the ones where you're less prohibited from building taller buildings. If the thing people actually want is indoor space then the piece of land where you can build a skyscraper is worth a lot more than the one which is limited to a single family home.
Someone should probably tell the homeowners with a high ratio of land to house who like to see their property values increase.
It's not just zoning, though that exacerbates it. City centers are where economic activity tends to be concentrated so even without zoning you would see these exponential land value effects as you approach the centers of economic activity (and indeed, we did see these same relative patterns prior to the passing of modern zoning laws).
Weren't transportation and communication a lot slower if you go that far back? Zoning laws started getting imposed not long after the invention of the telephone and the internal combustion engine and before either of them were in the possession of the majority of people.
The value of land in an urban area is obviously going to be higher than it is in a rural area just as a matter of scarcity, but it's not at all obvious that the reason it's currently so much more expensive in Manhattan than in the places directly adjacent to it isn't primarily a result of zoning just because that might not have been the reason in 1890.
If you're talking about the Manhattan effect specifically, I'm sure that zoning has a large effect on the extremeness of it. If you're talking about "land gets exponentially more valuable in the city center", then you see that pattern everywhere and indeed we saw it in the historical pre-zoning period as well. Agglomeration effects are sticky regardless of what time period you're in, what changes is the coefficients on the exponential equation.
You keep saying "exponentially" but let's look at the median rent for e.g. a 1 bedroom in Manhattan vs. the Bronx. It's around twice as much in Manhattan, because now you're measuring prices per-unit of indoor space rather than per-acre of land.
In a formal sense you can call this exponential. It's twice as much in Manhattan as the Bronx and twice as much in the Bronx as in some location even further out. But if you're trying to explain the >100x difference in the price of land between the Bronx and Manhattan, the ~2x difference in how much people value living there because of agglomeration effects is not the dominant effect.
And you would expect the densest places like Manhattan to have the strongest agglomeration effects. You can ratchet up permissively zoned land costs through zoning just by increasing the level of restrictions elsewhere, e.g. ban >2 story buildings instead of banning >5 story buildings, but the willingness of people to pay more in order to live near things is proportional to the number of things they would be paying more to live near.
On top of that, the zoning restrictions exacerbate the agglomeration effects. If you could build taller buildings in the places you currently can't then the premium commanded by housing in a dense area would go down by increasing the supply of it.
> "1. People have wildly incorrect intuitions about where land value is concentrated"
Fwiw this sort of land value gradient has been studied in economics for ages. See papers on monocentric city model, going back to Alonso (1964), Muth (1969), and Mills (1967). Or even further back, von Thünen was talking back in 1826 about how land values spike as you get closer to the marketplace.
I was waiting to read about what these "wildly incorrect intuitions" were, but it's never explained. The maps correctly matched my own intuitions.
Author here. Our blog generally concerns property tax reform for our regular readership which is admittedly less clear to a new reader coming in cold: the intuitions I’m referring to is the average homeowner kind of assumes any tax reform (such as shifting taxes off buildings and onto land) is designed to impoverish them personally. The purpose of these maps is to show such people where land value in cities is really concentrated - Ie, not the m the suburbs. Mono centric city value might be intuitive to academics, but it’s not among regular everyday people.
This is generally a big problem in Pittsburgh where huge areas of the most valuable land is owned by “nonprofits”
Do you mean people underestimate how steep the gradient is, or they don't know it at all?
It seems kind of dubious to me that "everyday" people don't understand that land in cities is worth more than land in suburbs. It seems very transparent that you get a smaller lot size for the same price.
Both. They do understand that it’s worth “more” in the city but they vastly underestimate the magnitude, and they vastly underestimate what that means in terms of where the total bulk of land value is concentrated, and therefore what the distribution of winners and losers will be in any tax shift scenario.
> I was waiting to read about what these "wildly incorrect intuitions" were, but it's never explained. The maps correctly matched my own intuitions.
If you are into land value tax discourse maybe, but from my experience at least there is a big lack of awareness of the impact of economic activities on land values as they are not reflected by anything that people get in contact with. That's especially true because neither rents nor property taxes (the one thing people might have exposure to) fully capture it.
Same. My assumption, before seeing this, was "ok, I'm going to guess land in a city is worth 100 or 1000x land anywhere else", and I guess I overestimated a bit.
This is great, and it also feels like a great way to answer the question "Where should I buy a house if I want to be close to the center but not in the expensive area?".
> Let’s play a guessing game. How much more valuable is land in Manhattan than in the Bronx? Take a guess, then scroll down for the answer.
As someone who has never been in New York and doesn't live in the US, I knew beforehand that I would fail this test very hard, haha.
Manhattan is where basically everything you might associate with New York is (Empire State building, World Trade Center, Times Square, Central Park, etc.). The Bronx is where Jennifer Lopez reminds us that she came from as she keeps it real.
The writer mentioned that people's intuitions about the distribution of land and where it's most valuable are wildly off, what exactly are people's intuitions that run counter to the data presented? It seems fairly intuitive to me that property values, as you get closer to an urban center
Author here: most people know that the city is "more" valuable, but drastically underestimate how valuable. I've asked people how much more valuable they think Manhattan is than the Bronx and they will say things like "5x" or "10x", which is off by an order of magnitude.
They also underestimate what this means. In many cities you can have 50%+ of land value concentrated in a rather small portion of area, and this has huge implications for what would happen is you, say, changed property tax policy to shift the tax burden towards land and away from buildings. Most people assume it would kill the suburbs, but in many of our models single family homes come out slightly ahead, or stay neutral.
Is "land value" the right term here? The NYC example uses assessed property value, which I think is a function of both the land under a property and the building itself. In that case, these "taller means more valuable" graphics are at least partially reflecting the fact that a tall building is probably more valuable than the short one next to it?
Land and "improvements" are assessed separately, and I believe this is plotting just the assessed land values. In the small text about each map, it says to use the settings to switch to full assessed value or improvements. But still, it's very hard to actually assess land value in an area like Manhattan where there are basically no land-only transactions
It is a good question. The author seems to use the field "assr_land_value", and there is also an "assr_impr_value". So it very well may be correct.
Now map property taxes per acre and tell me who's subsidizing who in this country. Urban3 has been doing the work: https://codesigncollaborative.org/urban-revolution-through-d...
Municipal costs per resident are effectively the inverse of these maps because the more spread out people are the more roads, pipes, etc are required to reach them.
We're directly inspired by Urban3 and our hope in releasing these tools is to enable more people to be able to do this work directly themselves and share it with their elected officials!
Nice idea, except the actual mapper site requires a google login to view.
Author here: it’s a cheap rate limiter and something we are looking to remove soon.
> Show an elected official
What is the problem this visualization seeks to make obvious? Is it just neat to think about and make?
Author here. This is the problem we are seeking to solve, we are property tax reform activists:
https://open.substack.com/pub/progressandpoverty/p/enacting-...
A minor thing - I know that article is part of a broader body of work and is not meant to solely present your ideas by itself. But nonetheless, since you linked to it, I had to scan down quite a bit to answer the question that was immediately on my mind: "tax reform for what purpose and why?"
And, an aside, I'd personally recommend getting rid of the emoji bullet-point additions: in this day and age, well, you know.
Good points! Thanks.
How much the land is worth is only one of the parameters.
Notoriously, the maintenance cost for suburbs and their infrastructure is significantly lower than the tax they bring. Shouldn't that be a major point un tax decisions?
IIUC the maintenance costs of suburbs is higher. Not sure if you meant that.
I've seen it argued both ways and I've yet to see real evidence, especially considering many suburbs are themselves actually cities/towns, and that cities seem to fight tooth-and-nail to prevent suburbs from leaving.
Yes. And it’s not like you can tear up all the roads leading out of a large city (or just let them decay).
Have you ... looked for evidence? I guess I always felt that it was self-evident that horizontal development costs way more in terms of roads, pipes, and wires, and at the same time raises almost nothing in terms of revenues. Residential-only development patterns never pay their own way. https://resources.environment.yale.edu/kotchen/pubs/COCS.pdf
I've looked a few times, and it quickly (at least to me) appeared to depend on what you bucket and where you can torture the data and make it confess.
Single buildings can cost as much as my entire "city" - one World Trade Center alone cost $4 billion.
An example of how you can bucket things is do you look at property tax, income tax (and if you do, is it where the "nexus of generation" is done, where the worker lives, where he works, where she's headquartered, etc). Around here basically none of what we would call "support" is paid for by property tax except schools (95% or so) and sewer (which is billed as a property "tax" though it's actually per connection/size).
In my town schools aren’t 95% of property taxes but they are the majority. Add emergency services, water (though that’s a separate bill), same for electricity. Less familiar with road and bridge maintenance. Assume some comes from the state and feds but at least some is local.
That's exactly the point. On big vertical building covers 1 acre of land but it has 80 acres of interior space. There's one honking water pipe in the basement that will never need to be replaced, instead of mile after mile of water pipes with leaky fittings every 50 feet.
You have it backwards. Suburb infrastructure is expensive and the land pulls in little tax money by comparison. They're almost always a net loss on the city's budget.
Was cool to see a few of the cities, and then cross reference with some searches on pricing to get a better understanding of the actual cost.
Probably fun to make but harder to read compared to a bar chart.
I suspect the visualisation is hiding a power law distribution that would be much more apparent in 2d.
Note that the site that generated these does not support any San Francisco Bay Area cities. I learned this only after being forced to "Sign in with Google".