Could a land value tax ease the housing crisis in Okla City?

-- As the concept of taxing land instead of property persists in OKC, forces at the state level fight hard against it.

OKLAHOMA CITY — Analysts and urbanists continue to brainstorm ways to curb the housing and inflation crises and the idea of a land value tax continues to resurface among those ideas.

The idea has been favored right here in Oklahoma City in the recent past as a way to curb large tracts of abandoned, blighted properties held only for their future long-term value while lowering local tax receipts and the quality of life for neighbors.

Groups like the Robert Schalkenbach Foundation exist entirely to promote the idea, everyone from the Chicago Federal Reserve to housing advocates in Virginia have been writing about it, and Google searches for the phrase “land value tax” spiked to a ten-year high just this year.

Even the US Department of Transportation has written about it through its Center for Innovative Finance Support.

But what does it mean to see “land value tax” or “LVT” when discussing state and local finances?

Well, put simply, it’s just the concept of charging a value-based tax on land rather than on property.

land value tax
From The New York Public Library public domain digital collections. Created in the late 1800s. (https://digitalcollections.nypl.org/items/510d47de-036a-a3d9-e040-e00a18064a99)

It’s meant to incentivize the development and use of land and to disincentivize the holding of vacant lots and abandoned buildings by owners hoping to turn a bigger profit down the line when rates and values increase.

Seems simple enough, right?

So why is this idea that’s been around as long as America only now seeming to get traction among analysts, and what’s keeping Oklahoma City from passing something similar to address the visibly growing number of vacant lots and empty structures?

What is land value tax?

Land value tax – or LVT – is a government process that levies a tax on land regardless of the buildings on it or the uses intended for it.

Essentially, the land in a city, state, or even a whole country would be appraised and assigned a value according to its location, potential, and lot size, and then taxed accordingly, with no regard for the structures or other “improvements” on the property.

Under an LVT, an empty parcel of land or an abandoned house or building would be taxed at the same rate and cost as any neighboring lot that has an occupied home or functioning building or business on it.

The system was popularized in concept as far back as the 1770s by Adam Smith (one of the strongest influencers of the economic policies of America’s Founding Fathers) and in the 1880s by famed economist Henry George. 

abandoned
Abandoned buildings at 1313 NW 3rd in Oklahoma City in December 2024 have been on the city’s Abandoned Buildings list since 2016. Little has changed since we first reported its condition and reputation in 2017. (B.DICKERSON/Okla City Free Press)

The LVT system is in stark contrast to the current system adopted across nearly all of the country that instead taxes property owners according to the homes, businesses, and other “improvements” or uses on the land.

The belief among LVT proponents is that, by taxing the ownership of even vacant or abandoned land, there’s a clear financial incentive to develop the land or to sell it to someone who will.

Champions of LVT say this could help to curb the nation’s current housing crisis by placing a greater financial burden on the (often corporate) owners of vacant and abandoned lots, many of whom are intentionally leaving the lots unused in the hope that rising demand will fetch a higher price later.

Opponents of the idea say that it would be a blatant disincentive to investors and that it could effectively dismantle the entire real estate investment industry. 

In all of the United States, only Pennsylvania and Connecticut levy any kind of land value tax, and their systems are only partially LVT-based alongside more traditional property taxes.

OKC vacant properties

Some Oklahoma City housing and revitalization advocates have lately floated the perceived benefits of LVT as a potential way to address the city’s many undeveloped lots and the staggering number of abandoned houses.

The City of OKC website hosts the regularly updated Abandoned Buildings List, cataloging properties that they’ve discovered to be abandoned or dilapidated across the city.

As of November 5th of this year, there were 1367 abandoned properties on the list, with more than 100 having been on the list since 2015.

But those are only the properties that the City has compiled after responding to emergency calls at the locations.

Many of those properties become “nuisance properties” over time, with multiple incidents and emergencies reported, such as this notorious property that we reported in 2017, still on the Abandoned Buildings List:  

A study in 2013 estimated the reality to be as many as 12,000 vacant and abandoned properties across the city at that time.

The only financial benefit that the City currently sees from these abandoned properties is in the form of fines levied only if an emergency team is dispatched to the property for any reason, and then only if the owner can be identified and reached.

Why is it often so difficult to track down the owners of abandoned and vacant properties in OKC?

Because it’s illegal for the city to keep a registry. You read that right: illegal.

Property registry and LVT in OKC

The City of OKC tried taking a step in that direction before, and the result was a statewide pushback so complete that it effectively shut down even the possibility of anything like LVT in OKC.

“Essentially what ended up happening,” OKC Community & Government Affairs Manager Jane Abraham told Free Press over the phone, “is that cities were preempted by the state legislature from doing anything like a vacant and abandoned building registry.”

In 2013, the City commissioned the previously mentioned study of abandoned and vacant buildings, intending to then create a registry of owners for any empty, abandoned, or dilapidated properties.

“You can create these pockets of disrepair when you get a concentration of properties like that.”

— Jane Abraham, City of Oklahoma City Community & Government Affairs Manager

The hope was to charge a small annual registry fee that could be collected and used for City expenses relating to those structures, like injury and emergency calls or even eventual demolition costs.

But it was also to hopefully spur some development and some worthwhile use of the lots, rather than investors holding them indefinitely.

“If you have a lot of vacant and abandoned properties in a particular neighborhood, that can drive down the value for the neighbors,” Abraham said. “You can create these pockets of disrepair when you get a concentration of properties like that.”

In much the same way that the LVT system is touted as a method toward spurring development and disincentivizing long-term, hands-off land investment, the City’s proposed registry fee would have created a small financial incentive to build or sell.

Oklahoma Capitol
The Oklahoma Capitol, 2022 (B. DICKERSON/Okla City Free Press)

A swift pushback came from the Oklahoma Association of Realtors and their robust lobbying influence in the state legislature. 

In March of 2014, House Bill 3363, authored by Rep. Steve Martin – himself a landlord of rental properties in Bartlesville – banned cities from keeping any such registry for property owners, abandoned, vacant, or otherwise.

Because the State of Oklahoma is a higher level of government than cities that are chartered by the state, the Legislature can stop cities from passing ordinances by passing legislation prohibiting those ordinances. The name for such action is “preemption.”

Not much of anyone talking

So would that legislation effectively block any attempt at enacting something like a land value tax, knowing that it would similarly amount to a fee on vacant and abandoned properties and would disincentivize long-term real estate investment?

“Yes,” Abraham told Free Press. “I think that’s probably true.”

Jane Abraham
Jane Abraham, City of Oklahoma City Community & Government Affairs Manager (provided)

For anything like land value tax – or any similar fee on the ownership of vacant or abandoned properties – to be employed to address the issue of stagnating housing and neighborhood development, there would need to be a concerted push from the city and new legislation at the state level.

But that seems unlikely, as no city or state government officials seem eager to even discuss LVT.

OKC Free Press attempted to reach a current City Council member, an official with the OKC Planning Department specializing in housing concerns, and even a sitting member of the Oklahoma House of Representatives. As of publication, none responded.

That was no surprise to Abraham, who remembers the original fight in 2014.

“I don’t know how familiar you are with Oklahoma politics,” Abraham said, “but they really hate property taxes.”


Author Profile

Brett Fieldcamp has been covering arts, entertainment, news, housing, and culture in Oklahoma for nearly 15 years, writing for several local and state publications. He’s also a musician and songwriter and holds a certification as Specialist of Spirits from The Society of Wine Educators.