Why do you need to know the value of buildings if the goal is to switch to a Land (only) Value Tax? The vacant lot sales, if there are enough of them, should tell you the accurate value of the land, right? Then, whatever is the value of a built-upon parcel above the vacant comparable lot will be the improvement value. Land Value should then be whatever zoning will allow for building to the highest and best use, right?
Great question, Scott. Here's a few things to keep in mind:
1. The purpose of this report is beyond the scope of land value tax alone. Baltimore has an conventional property tax and as long as it has that conventional property tax, it needs accurate data on buildings if the buildings are to be properly valued.
2. Often the political reality is that on the path to land value tax reform, split rate taxes are implemented that tax land and buildings at different rates. If the rate on buildings is anything other than zero, you still need to value the buildings.
3. Even in a pure land value tax situation, there are often cases where you might want additional information to value land properly, or at least, in order to both value the land *and* get the public to accept it.
3A: Sometimes you don't have enough vacant land sales. And other times you have a large enough *number* of vacant land sales, but they aren't sufficiently evenly distributed in all the locations you want to know about. In these cases it can help by supplementing with some data from improved sales.
3B: Even when you *can* get a good model from purely vacant data alone, you still have to *explain* it to the public, and they often find it helpful to see side-by-side comparisons with full valuation of improved property.
3C: The best and most persuasive valuations are those where you can show that the same answer is arrived at by multiple methods. So even if you can do a pure land valuation from vacant lots alone, it often helps to back that up with other methods that incorporate evidence from improved sales.
In the next few weeks, Lars and I will post our updated thoughts on land valuation.
This report is about how Baltimore does not value land correctly for vacant lots, so that should be resolved regardless.
On the improvements question, I believe assessors will always need to assess buildings. First, in the medium term because, much like Pennsylvania cities, a full switch to land tax is unlikely. It needs to be phased.
Second, the more important reason however is because vacant land sales may not give us all the signal we need to accurately value land. This will come in our upcoming post and thoughts on land valuation, but there often is not enough vacant land sales, so we need to know data on buildings (ie. value them using data) to help deduce land values.
Perhaps some day in the future, land valuations are all that matter.
Interesting article. I'm curious about the treatment of vacant homes in Baltimore, which have often in such bad shape that they need to be torn down and replaced. Are they still treated as more valuable than vacant land? Should they be?
We investigated this, and I found at least one or two instances of the inverse: where the property was treated as worth very little but sold for much more since the land was actually valuable. I am not convinced this is a trend, however. Hence, we did not include it in the report.
Next week, we will launch our AVM Kit. We developed a full AVM kit of Baltimore, and one thing we consistently found was that poor data quality in Baltimore really impacted results, though through data enrichment we could overcome some of those challenges. The biggest thing is that Baltimore's assessors aren't adequately tracking building quality, and those buildings that should be teardown or not. This impacted our ability to do more rigorous research on the point of dilapidated buildings.
About 20 to 30 years ago a colleague of my brothers was automating the dwelling size calculation in urban slums and suburbs in Mozambique using commodity aerial photogamerty. They would determine the size of the roof on ortho-corrected photos and subtract some for the eves.
Automating the determination f structures from modern historical photo data and using AI would be almost trivial. Might be possible with just text prompts if some of the data could be verified against other records.
We are launching OpenAVMKit next week which has some of these features. For instance, it enriches parcel data with Microsoft Overture data (which you may find interesting!). It's AI built for building identification.
We are just scratching the surface of what is possible with modern computer vision and satelite/ground photography. These technologies will become increasingly equipped in the assessment world
I live near Baltimore, so this was really cool to hear. What's the actual, real path forward for effecting this change? Who in Baltimore politics/administration needs to sign off on it?
SDAT doesn't have any control of the tax rate, that is the responsibility of elected officials. This isn't really about revenue, which SDAT has no control over.
What we're arguing for here is what the law requires -- that all property be valued at market value.
What to DO with those values is in the hands of elected officials. All exemptions, write-downs, discounts, and the tax rate itself -- are political decisions for electeds to make. Our argument is that those decisions should be made consciously and explicitly at the political layer, where voters can have a say, rather than implicitly at the assessment layer through unequal assessments.
The main issue is fairness. If property A is undervalued relative to property B, property B will pay proportionately more taxes, regardless of how much revenue is raised overall. By undervaluing vacant land (where nobody lives), the burden is shifted unfairly to improved land (where everybody lives).
price is at the root of the problem. Assessments should be on the basis of GROSS ANNUAL RENTAL VALUE ; property taxes already paid are part of this value
price is at the root of the problem. Assessments should be on the basis of GROSS ANNUAL RENTAL VALUE ; property taxes already paid are part of this value
Why do you need to know the value of buildings if the goal is to switch to a Land (only) Value Tax? The vacant lot sales, if there are enough of them, should tell you the accurate value of the land, right? Then, whatever is the value of a built-upon parcel above the vacant comparable lot will be the improvement value. Land Value should then be whatever zoning will allow for building to the highest and best use, right?
Great question, Scott. Here's a few things to keep in mind:
1. The purpose of this report is beyond the scope of land value tax alone. Baltimore has an conventional property tax and as long as it has that conventional property tax, it needs accurate data on buildings if the buildings are to be properly valued.
2. Often the political reality is that on the path to land value tax reform, split rate taxes are implemented that tax land and buildings at different rates. If the rate on buildings is anything other than zero, you still need to value the buildings.
3. Even in a pure land value tax situation, there are often cases where you might want additional information to value land properly, or at least, in order to both value the land *and* get the public to accept it.
3A: Sometimes you don't have enough vacant land sales. And other times you have a large enough *number* of vacant land sales, but they aren't sufficiently evenly distributed in all the locations you want to know about. In these cases it can help by supplementing with some data from improved sales.
3B: Even when you *can* get a good model from purely vacant data alone, you still have to *explain* it to the public, and they often find it helpful to see side-by-side comparisons with full valuation of improved property.
3C: The best and most persuasive valuations are those where you can show that the same answer is arrived at by multiple methods. So even if you can do a pure land valuation from vacant lots alone, it often helps to back that up with other methods that incorporate evidence from improved sales.
In the next few weeks, Lars and I will post our updated thoughts on land valuation.
This report is about how Baltimore does not value land correctly for vacant lots, so that should be resolved regardless.
On the improvements question, I believe assessors will always need to assess buildings. First, in the medium term because, much like Pennsylvania cities, a full switch to land tax is unlikely. It needs to be phased.
Second, the more important reason however is because vacant land sales may not give us all the signal we need to accurately value land. This will come in our upcoming post and thoughts on land valuation, but there often is not enough vacant land sales, so we need to know data on buildings (ie. value them using data) to help deduce land values.
Perhaps some day in the future, land valuations are all that matter.
Interesting article. I'm curious about the treatment of vacant homes in Baltimore, which have often in such bad shape that they need to be torn down and replaced. Are they still treated as more valuable than vacant land? Should they be?
We investigated this, and I found at least one or two instances of the inverse: where the property was treated as worth very little but sold for much more since the land was actually valuable. I am not convinced this is a trend, however. Hence, we did not include it in the report.
Next week, we will launch our AVM Kit. We developed a full AVM kit of Baltimore, and one thing we consistently found was that poor data quality in Baltimore really impacted results, though through data enrichment we could overcome some of those challenges. The biggest thing is that Baltimore's assessors aren't adequately tracking building quality, and those buildings that should be teardown or not. This impacted our ability to do more rigorous research on the point of dilapidated buildings.
About 20 to 30 years ago a colleague of my brothers was automating the dwelling size calculation in urban slums and suburbs in Mozambique using commodity aerial photogamerty. They would determine the size of the roof on ortho-corrected photos and subtract some for the eves.
Automating the determination f structures from modern historical photo data and using AI would be almost trivial. Might be possible with just text prompts if some of the data could be verified against other records.
We are launching OpenAVMKit next week which has some of these features. For instance, it enriches parcel data with Microsoft Overture data (which you may find interesting!). It's AI built for building identification.
We are just scratching the surface of what is possible with modern computer vision and satelite/ground photography. These technologies will become increasingly equipped in the assessment world
I live near Baltimore, so this was really cool to hear. What's the actual, real path forward for effecting this change? Who in Baltimore politics/administration needs to sign off on it?
Yeah, Baltimore really has a problem with low property tax rates (lol). Nobody moves to the county because their rate cuts in half.
What we really need is to get more money to the Baltimore city government. They know how to use it!
SDAT doesn't have any control of the tax rate, that is the responsibility of elected officials. This isn't really about revenue, which SDAT has no control over.
What we're arguing for here is what the law requires -- that all property be valued at market value.
What to DO with those values is in the hands of elected officials. All exemptions, write-downs, discounts, and the tax rate itself -- are political decisions for electeds to make. Our argument is that those decisions should be made consciously and explicitly at the political layer, where voters can have a say, rather than implicitly at the assessment layer through unequal assessments.
The main issue is fairness. If property A is undervalued relative to property B, property B will pay proportionately more taxes, regardless of how much revenue is raised overall. By undervaluing vacant land (where nobody lives), the burden is shifted unfairly to improved land (where everybody lives).
This seems like something that is worth fixing.
The article is about correctly assessing the value of empty lots. Your comment doesn't seem to be relevant to the issue being discussed.
price is at the root of the problem. Assessments should be on the basis of GROSS ANNUAL RENTAL VALUE ; property taxes already paid are part of this value
price is at the root of the problem. Assessments should be on the basis of GROSS ANNUAL RENTAL VALUE ; property taxes already paid are part of this value