Margaret Dewar is the Emil Lorch Professor of Architecture and Urban Planning at the Taubman College of Architecture and Urban Planning at the University of Michigan. She directs the Detroit Community Partnership Center through which University of Michigan faculty and students work with community-based organizations and city agencies on community-identified neighborhood issues. Dewar is also faculty director of the Ginsberg Center for Community Service and Learning, whose mission is to involve faculty, students, staff, and community partners in learning together through community service and civic participation in a diverse democratic society. She and her students have worked on brownfield redevelopment with numerous organizations in Detroit and Flint.

Dewar’s research is concerned with American government effectiveness in intervening in microeconomic systems to deal with economic distress such as troubled industries, declining regions, distressed cities, and poverty. She has written books and articles on industrial policy, rural economic development programs, and urban revitalization. Her current research focuses on ways to address the barriers to equitable redevelopment of older industrial cities. She is writing about systems for moving tax-reverted property to new uses, the role of place-committed coalitions in redevelopment of brownfields, and indicators of early neighborhood decline and revitalization that can facilitate public intervention.

Dewar has a Ph.D. in Urban Studies and Planning from the Massachusetts Institute of Technology and a Master of City Planning from Harvard University. She received her undergraduate degree from Wellesley College.

Land Lines: How did you become involved in and concerned about brownfield redevelopment?

Margaret Dewar: I had done quite a lot of research on the effects of state and local economic development incentives on business location and expansion decisions. I also had taught courses where students worked on plans for urban redevelopment with nonprofit organizations in Detroit.

The calls for subsidies for brownfield redevelopment grew louder in the mid-1990s as states reformed their laws about cleanup requirements and liability. Given my background in economic development and urban redevelopment, I thought those calls sounded inauthentic. The campaigns for cleanup subsidies were essentially claiming that if the subsidies were provided, redevelopment of contaminated property would occur, implying that the only barrier to land reuse was the dirty dirt.

However, urban redevelopment is a very complex process that involves the assembly of land owned by many people, relocation of residents, demolition of structures, removal and replacement of infrastructure, and adherence to or release from regulatory restrictions and requirements—to name a few of the issues. Contamination could not be the only barrier, and, I thought, it was not even likely to be the most important one.

Further, state and local incentives for economic development rarely change business location and expansion decisions. I suspected that brownfield incentives would have a similar effect. Therefore, I started to do research on the determinants of brownfield redevelopment to place this kind of development in the broader urban redevelopment context.

Land Lines: How has your brownfield research evolved over the last decade?

Margaret Dewar: As I watched community development corporations (CDCs) in Detroit struggle with redevelopment, I became interested in whether place-committed coalitions were more or less effective in brownfield redevelopment than other kinds of developers.

Place-committed coalitions are the alliances of CDCs, nonprofit housing corporations, neighborhood organizations, and determined residents who are going to stay in place, no matter what. Unlike many other developers or businesses, they will not move to the suburbs because development is easier and more profitable there. They are often the only developers interested in the poorest neighborhoods, and any hope for a better physical environment in those places rests with them. Unlike private developers, they are not seeking especially profitable redevelopment projects; if they can break even, much of the return on their investment is seen in the creation of a better neighborhood.

When place-committed coalitions succeed in redevelopment, they may create market conditions that are attractive to private developers and therefore spur further redevelopment, or they may demonstrate market potential through bellwether projects. As a result, nonprofit developers are especially important in making urban redevelopment succeed.

However, I found that these coalitions were rarely successful in brownfield redevelopment, although development on contaminated land did not seem particularly different from other kinds of redevelopment. Now most of my own research projects and quite a few of the student projects I supervise are concerned with factors that lead to positive reuse of abandoned property in cities, especially reuse by nonprofit developers.

Land Lines: How do you involve your students in this work?

Margaret Dewar: I get many research ideas from working with CDCs, nonprofit housing corporations, and public agencies on plans for brownfield reuse, and I am able to bring these ideas into planning practice on specific projects. Twice each year I teach a course where advanced urban planning students develop plans with organizations working on strengthening their city neighborhoods and help advance the organizations’ efforts.

For example, my students and I worked with the Genesee County Brownfield Redevelopment Authority (BRA) and the Genesee County Land Bank to inventory brownfields in Flint, Michigan. We also helped to prioritize sites for attention based the goals of the BRA and the land bank, which are now following up on the recommendations in the plan with a neighborhood nonprofit and a group of diverse property owners.

Another team of students worked with a neighborhood nonprofit organization in southwest Detroit to identify brownfields and determine which sites have the greatest priority for reuse. Although the staff praised the plan, the organization has not been able to act on the recommendations. The contrast in these two experiences, along with the literature on determinants of nonprofit developers’ success, suggests numerous hypotheses about what helps and hinders the reuse of brownfield sites in such situations.

Land Lines: What is your most recent project with the Lincoln Institute?

Margaret Dewar: With Kris Wernstedt at Virginia Polytechnic Institute, I am looking at some of these hypotheses about why CBOs are successful or not in reusing vacant, abandoned, and contaminated property. Kris is looking at the work of CBOs in Baltimore, Portland, and Denver, and I am studying their reuse of such property in Detroit, Cleveland, and Flint. Because the demand for land in my set of three cities is similar, the comparison holds the market constant and promises to reveal institutional, political, and legal factors that are important in CBOs’ results.

The three midwestern cities differ in the strength of their nonprofit development sectors. Cleveland has an active network of nonprofit developers that have constructed thousands of units of housing over the last 15 years. Detroit has a maturing nonprofit development sector that is growing in its capacity to do projects, but Flint has very little such activity.

These differences can help reveal factors that matter and the ways they matter in redevelopment success. For instance, a commonly cited force in the success of Cleveland’s nonprofit developers is the commitment of foundations to provide funding for redevelopment. However, Flint also has foundations with large amounts of resources committed to that city. What are the differences in how the foundations in each city work that might help explain these differences in nonprofit development activity and effectiveness?

Land Lines: How can CBOs be most effective in brownfields redevelopment?

Margaret Dewar: Kris Wernstedt and I pose four groups of hypotheses or framing perspectives in our research on CBOs’ effectiveness in redeveloping brownfields. First, the special features of CBOs—their shortage of funds, small number of professional staff, lack of skills for redevelopment, and other issues—may interfere with implementing successful projects to reuse vacant, abandoned, and/or contaminated sites. CBO staff may especially lack the background to take on projects that involve contaminated sites.

Second, legal and political issues may interfere with the transfer of tax-reverted property to nonprofit developers for redevelopment projects, even though this land is essential for projects to go forward.

Third, weak local institutional settings may leave CBOs without adequate political or financial support for undertaking projects to reuse vacant, abandoned, and/or contaminated properties. Local government, financial institutions, foundations, and intermediaries may not provide sufficient backing to help CBOs over the substantial hurdles.

Fourth, federal and state legal and regulatory structures and financing provisions for contaminated sites in particular may interfere with CDCs’ efforts to reuse such property.

Another factor is that the demand for land in different cities affects the approach and efficacy of CBOs in redeveloping that land. In cities or neighborhoods with strong market demand, CBOs may have little opportunity to obtain such property for redevelopment because they are competing with private developers. On the other hand, in cities with weak demand for land, CBOs may struggle to find tenants or buyers for redeveloped property.

Land Lines: How is your work with the Lincoln Institute helping to broaden the scope of brownfield research?

Margaret Dewar: I continue to believe that contamination is rarely the determining factor in whether land can be reused or not, especially now that cleanup standards and liability risks have changed. By placing contamination in the larger context of the redevelopment of vacant, abandoned, and contaminated property in cities, we gain a better understanding of the complexity of redevelopment in general and of the kinds of changes that would help CBOs be more effective in remaking cities in ways that can improve the quality of life in distressed areas.

Una versión más actualizada de este artículo está disponible como parte del capítulo 7 del CD-ROM Perspectivas urbanas: Temas críticos en políticas de suelo de América Latina.

Paulo Sandroni se graduó de economista en la Universidad de São Paulo en 1964 y fue profesor adjunto de economía en la Universidad Católica de São Paulo (PUC) hasta 1969, cuando dejó Brasil durante la dictadura militar. Enseñó en la Universidad de Chile en Santiago hasta 1973 y después en la Universidad de los Andes en Bogotá, Colombia, hasta 1979. Después de retornar a São Paulo, volvió a enseñar en la PUC hasta 2006 y también se incorporó a la Escuela de Administración de la Fundación Getulio Vargas (FGV).

En 1988, después de la victoria del Partido de los Trabajadores (PT) en Brasil, se incorporó al gobierno municipal de la alcaldesa Luiza Erundina en São Paulo, donde dirigió agencias dedicadas al desarrollo urbano y el transporte público. Durante un breve período, también fue viceministro de administración en el gobierno federal.

En 1994 dejó el área de gobierno municipal para continuar enseñando y realizando investigaciones sobre desarrollo urbano en ciudades de Brasil y otros países de América Latina, y publicando artículos y libros sobre economía, incluyendo un diccionario de economía que se considera como referencia primaria en Brasil. Inició su afiliación con el Instituto Lincoln en 1997. En la actualidad es consultor privado sobre temas de desarrollo urbano y transporte, y sigue enseñando en la Escuela de Administración de FGV y en programas patrocinados por el Instituto Lincoln.

Land Lines: ¿Cómo se interesó en temas de política urbana, vistos sus antecedentes en macroeconomía?

Paulo Sandroni: En 1988 −cuando era asistente de Luiz Inácio Lula da Silva, ahora Presidente de Brasil y en ese entonces un candidato en las elecciones de 1989− ayudé a desarrollar programas para resolver los problemas macroeconómicos de Brasil. Después de la victoria de Luiza Erundina a la alcaldía de São Paulo en 1988, fui invitado a dirigir el programa de Operaciones Interligadas. Este programa consistía en negociar y formar sociedades entre los sectores público y privado para otorgar derechos adicionales de edificación, y usar la recaudación proveniente de la parte recuperada del incremento del valor del suelo (o plusvalía) para construir viviendas sociales para familias pobres.

También participé en el desarrollo de Operaciones Urbanas (OU), una forma de intervención para revitalizar grandes áreas de la ciudad, que también involucró la recuperación de plusvalías. Estaba fascinado por el desafío de formar parte de un grupo cuya misión era gobernar la ciudad más grande de Brasil con un proyecto de gran connotación social, y además continué asistiendo al Presidente Lula da Silva en temas macroeconómicos hasta 1998.

Land Lines: A su juicio, ¿por qué los proyectos de desarrollo urbano son un desafío tan grande?

Paulo Sandroni: La primera razón es que en los grandes proyectos que afectan los aspectos históricos, culturales, sociales y ambientales de la ciudad, la resolución de los problemas económicos y de financiamiento se debe considerar como parte del desafío, pero no son el objetivo principal. Por ejemplo, las OU que tratan de evitar el aburguesamiento y producir un entorno social más equilibrado pueden tener que usar tierras más valiosas para construir viviendas sociales. Estos proyectos requieren atención especial, porque la tierra no se puede vender usando el criterio típico de mayor y mejor uso. En Brasil hay una distinción importante entre los grandes proyectos urbanos (GPU) que pueden o no usar las herramientas de recuperación de plusvalías proporcionadas por las OU. Los GPU que están en condiciones de usar estas herramientas pueden redituar beneficios financieros y sociales, tanto para el sector público como el privado, con mayor facilidad.

Land Lines: ¿Puede describir el instrumento financiero detrás de esta política?

Paulo Sandroni: Desde 2004, los fondos para financiar las viviendas sociales y otras inversiones de infraestructura en las OU se han recaudado por medio de un nuevo instrumento ingenioso de recuperación de plusvalías llamado CEPAC (Certificado de Potencial Adicional de Construcción). Un CEPAC puede representar una cantidad determinada de metros cuadrados de derechos de construcción adicionales, dependiendo de dónde se formó la OU. Por ejemplo, en la OU de Faria Lima los CEPAC oscilaban de un mínimo de 0,8 a un máximo de 2,8 m2 y en la OU de Agua Espraiada, de 1,0 a 3,0 m2, porque los precios del suelo varían entre distintos lotes, incluso dentro de la misma OU.

La administración pública que crea y posee los derechos de desarrollo puede vendérselos a los emprendedores que quieran edificar con una densidad mayor que lo que estaba permitido previamente en esos lotes. Los CEPAC se venden en subasta a través de la bolsa, y si el interés de los emprendedores es alto, los precios pueden llegar a aumentar. No hace falta que el sector público valore la propiedad, porque el mercado se encarga de hacerlo. Los ingresos por la venta de CEPAC se depositan bajo una ley muy estricta en una cuenta separada utilizada para financiar proyectos de infraestructura y de viviendas sociales dentro de la OU, de manera que no aumenta la presión sobre el presupuesto de la ciudad.

Muchos observadores ven con recelo este instrumento porque temen que sea una forma de especulación del suelo en los mercados financieros. Creo que esto es un error, por dos razones. Primero, los especuladores agresivos en general invierten en bonos de alta liquidez que pueden aumentar de valor rápidamente en el corto plazo; los CEPAC no tienen ninguna de estas características. Segundo y más importante, el gobierno controla el mercado a esta altura del proceso. Si los precios aumentan debido a especulación, el sector público puede vender estos derechos a un precio más alto, incrementando sus ingresos proporcionalmente, o puede vender una cantidad más grande de acciones, causando un descenso del precio y neutralizando a los especuladores.

Land Lines: ¿Cómo han funcionado los CEPAC en la práctica?

Paulo Sandroni: Ambas OU que mencioné anteriormente han usado este instrumento para recaudar fondos de los emprendedores. A la fecha se ha vendido el 31 por ciento del inventario de metros cuadrados, o CEPAC, en el caso de Agua Espraiada y el 32 por ciento de Faria Lima. El caso de Agua Espraiada ilustra el proceso de licitación y la influencia de los especuladores. El gobierno de la ciudad realizó una subasta de 186.740 CEPAC en febrero de 2008, a un precio inicial de R$460 (equivalente a US$200). Un oferente trató de comprarlos todos, así que el precio subió a R$1,110 (US$480), un aumento increíble del 141 por ciento.

Meses más tarde, en octubre, otra subasta ofreció 650,000 CEPAC a un precio inicial de R$535 (US$230), pero se vendieron solamente 379.650, sin ningún aumento del precio. Entre diciembre de 2004 y febrero de 2009, la recaudación por venta de CEPAC en la OU de Faria Lima fue de R$567 millones (US$244 millones) y en la OU de Agua Espraiada fue de R$642 millones (US$276 millones). Si comparamos estos ingresos combinados de $520 millones de dólares en el curso de cuatro años con la recaudación total de impuestos sobre la propiedad en 2008, que fue de $1,25 mil millones de dólares, vemos que representa más del 40 por ciento, o alrededor del 10 por ciento anual.

Land Lines: ¿Cómo se pueden usar estos ejemplos para obtener respaldo a los medios alternativos de financiamiento del desarrollo urbano?

Paulo Sandroni: La forma clásica de financiar inversiones de capital en infraestructura es por medio de préstamos de largo plazo y transferencias de fondos federales; en general, el impuesto sobre la propiedad se usa para mantener la infraestructura y los servicios públicos. Pero en Brasil, los préstamos que pueden tomar las municipalidades y los estados están sujetos a límites estrictos. El hecho de que los ingresos por CEPAC no tengan este tipo de restricción presupuestaria agrega un valor financiero significativo a este instrumento.

Además, al igual que en los Estados Unidos y otros lados, aumentar impuestos es muy impopular. En las últimas cinco elecciones en São Paulo, por lo menos tres candidatos perdieron porque los votantes interpretaron que respaldaban un aumento de impuestos. Por lo tanto, para financiar grandes proyectos urbanos tenemos que evaluar cuánta plusvalía se va a crear, determinar cómo capturarlo y crear una situación que beneficie a todos. Los CEPAC ofrecen una alternativa viable.

Land Lines: ¿La mayoría de los proyectos de América Latina tienen tendencia al aburguesamiento? ¿Cómo se pueden hacer más socialmente aceptables?

Paulo Sandroni: En la medida que los GPU se concentren en las inversiones urbanas en infraestructura (construcción de caminos, puentes, centros comerciales, centros de negocios, etc.), el precio de la tierra probablemente aumentará en ciertas áreas afectadas, y ello contribuirá a la expulsión de familias pobres y hasta algunas de la clase media. De todas maneras, estos GPU son iniciativas del sector público, así que se pueden diseñar mecanismos para mitigar estas fuerzas de exclusión.

La legislación brasileña permite el establecimiento de ZEIS (Zonas Especiales de Interés Social) en áreas ocupadas por barrios marginales dentro del perímetro de los GPU. En estas áreas designadas, el emprendedor sólo puede construir nuevas viviendas para los pobres, aun cuando el precio de la tierra sea muy alto. Por supuesto, la oposición económica y social creada por este mecanismo es considerable entre los terratenientes y los emprendedores inmobiliarios, pero es defendida vigorosamente por las organizaciones y los residentes locales. São Paulo cuenta en la actualidad con ZEIS en cuatro GPU: Agua Branca, Faria Lima, Agua Espraiada y Rio Verde-Jacu. El ZEIS del barrio marginal Coliseu en Faria Lima, y el barrio marginal Jardim Edith en Agua Espraiada, son casos interesantes, porque están ubicados en las tierras más caras dentro de estos proyectos (ver Biderman, Sandroni y Smolka 2006).

Land Lines: ¿Cuáles son las desventajas de estas herramientas regulatorias (CEPAC, ZEIS, OU, etc.) que puedan haber dejado vacíos para el oportunismo de partes interesadas bien posicionadas?

Paulo Sandroni: Bueno, se puede encontrar corrupción y conductas antisociales en todos lados, y algunas condiciones pueden favorecerlas. Pero si uno sobrecarga el sistema con reglamentaciones y normas, se puede terminar bloqueando las iniciativas para superar estos problemas y se paraliza un proceso que puede beneficiar el interés público. Es más riesgoso, por supuesto, reducir las reglamentaciones y brindar más oportunidad para negociar, pero este riesgo se puede mitigar si se crean normas de negociación, con castigos muy severos por violarlas. Al mismo tiempo, hay ciertos asuntos que demandan una reglamentación muy precisa, como es el caso de los ZEIS, porque los grupos más pobres de la ciudad necesitan de la intervención del sector público.

Land Lines: ¿Se pueden replicar estos tipos de proyectos de São Paulo en otras ciudades de América Latina?

Paulo Sandroni: Tenemos que tener cuidado a la hora de transplantar o repetir experiencias que fueron exitosas en un país a otro. Antes de hacerlo, es importante conocer dos cosas: las condiciones imperantes en la ciudad cuando se crearon estas OU; y los tipos de problemas que los planificadores querían resolver con estos proyectos.

Por ejemplo, una condición importante en São Paulo es la separación de los derechos de edificación de los derechos de propiedad, lo cual abre un camino para cobrar por un cambio en la relación de superficie de edificación a superficie del lote. En grandes partes de la ciudad, la relación de superficie de edificación a superficie del lote, que está relacionada con las normas de zonificación, es muy baja en la actualidad, oscilando entre una y dos veces el área del lote. Cuando sea posible aumentar esta relación tres o cuatro veces sin ejercer una gran presión sobre la infraestructura, se impone un cargo sobre los dueños o emprendedores por los derechos adicionales a construir con mayor densidad.

En otras ciudades, donde la relación de superficie de edificación a superficie del lote ya sea alta, hay menos flexibilidad para cobrar por derechos de desarrollo adicionales, de manera que quizás haga falta crear otras políticas o herramientas. La lección principal es que las OU de São Paulo han demostrado que cobrarles a los propietarios o emprendedores por los derechos adicionales a edificar ha sido tanto razonable como equitativo. Ya no es social, política o aun económicamente admisible conceder estos derechos de desarrollo sin cargo.

Referencia

Biderman, Ciro, Paulo Sandroni, y Martim O. Smolka. 2006. Large-scale urban interventions: The case of Faria Lima in São Paulo (Intervenciones urbanas a gran escala: el caso de Faria Lima en São Paulo). Land Lines 18(2): 8–13.

La recuperación de la plusvalía del suelo es ahora un tema popular entre los profesionales de finanzas públicas a nivel local, en parte debido a que la disminución en los ingresos de los gobiernos locales causada por la recesión ha despertado el interés en nuevas fuentes de ingresos, y en parte debido a la necesidad de encontrar nuevas maneras de financiar la infraestructura local, que se ha deteriorado a causa de la falta de inversión. La sexta Conferencia Anual sobre Políticas de Suelos del Instituto Lincoln, celebrada en mayo de 2011, analizó varios aspectos de la recuperación de plusvalías, utilizando experiencias a nivel nacional e internacional.

Principios básicos de la recuperación de plusvalías

Los cambios en el valor del suelo se deben con frecuencia a factores que no están relacionados con el esfuerzo del propietario: acciones tomadas por la comunidad relativas a las inversiones en infraestructura; crecimiento cercano de actividades industriales, comerciales, residenciales o recreativas; normas de edificación que permiten al dueño desarrollar el suelo; o el crecimiento gradual de la comunidad. La recuperación de plusvalías consiste en aplicar un impuesto o arancel diseñado para devolver a la comunidad algo o todo el valor agregado al suelo por las acciones de la comunidad. Su aplicación es particularmente atractiva cuando las inversiones públicas —en caminos, suministro de agua, saneamiento o servicios locales, como el alumbrado público— aumentan los valores de la propiedad.

Experiencia internacional

Arriendo de suelos. Quizás la aplicación más amplia y comprensiva del principio de recuperación de plusvalías tiene lugar en China, donde las municipalidades compran suelos agrícolas a los granjeros a precios de uso agrícola, les agregan servicios públicos de infraestructura, y se los venden a los emprendedores como suelos urbanos, con permisos para realizar emprendimientos urbanos. La municipalidad se queda con la diferencia de precio entre el valor urbano y agrícola del suelo, generando una proporción importante de sus ingresos locales con los cuales paga, entre otras cosas, la instalación de la infraestructura.

Co-desarrollo. Las compañías de transporte público de Hong Kong y Tokio han usado los ingresos de co-desarrollo de comunidades residenciales y áreas comerciales cercanas a las nuevas estaciones de transporte público para ayudar a financiar sus costosos proyectos. En Tokio, los ingresos de las líneas de transporte que no se deben a la venta de pasajes suman del 30 al 50 por ciento del total. En ambas ciudades, los ingresos operativos por la gestión de propiedades están cobrando más importancia que las ganancias obtenidas de los emprendimientos en sí, y proporcionan una fuente de ingresos sustentable.

Tributación del desarrollo inmobiliario. Los intentos de tributar la valorización de las propiedades en el Reino Unido comenzaron en 1909, pero su implementación se vio obstruida por problemas de valuación y otros desafíos. Las contribuciones directas de valorización fueron reemplazadas por contratos con las autoridades locales, donde los emprendedores contribuyen al suministro de infraestructura y servicios, viviendas de interés social y otras obligaciones de planeamiento. Estos contratos se están convirtiendo poco a poco en contribuciones de infraestructura comunitaria, que es una contribución de valorización obtenida por otros medios. Siguiendo una trayectoria histórica distinta, Francia también ha establecido un impuesto de infraestructura local a los nuevos emprendimientos.

Consorcios de suelos. India ha experimentado con los consorcios de suelos para implementar sus nuevos planes de urbanización que reemplazan a los viejos planes de ordenamiento territorial. Esta práctica alienta a los dueños de suelos sin desarrollar, o desarrollados en forma precaria, a que agrupen sus predios y luego reciban una parcela con servicios de infraestructura o un espacio construido cuando el emprendimiento se haya completado. La estrategia adoptada en Ahmedabad usa el 15 por ciento de los suelos para caminos, el 10 por ciento para parques, el 15 por ciento para subastar a terceras partes y el 60 por ciento para los miembros del consorcio.

La experiencia de los Estados Unidos

Algunas de las políticas específicas de recuperación de plusvalías en los Estados Unidos incluyen áreas de tributación especial con cargos por valorización. Por ejemplo, los Distritos de Establecimientos Comunitarios (Community Facilities Districts, o distritos Mello-Roos) destinan aranceles pagados por los residentes al pago de bonos vendidos para financiar el desarrollo de infraestructura. Los Distritos de Mejoras Comerciales (Business Improvement Districts) y el Financiamiento por Incremento de Impuestos (Tax Increment Finance) usan ingresos tributarios o arancelarios separados para financiar mejoras urbanas en áreas designadas al efecto. Los Acuerdos de Beneficios Comunitarios (Community Benefit Agreements), que se negocian en forma privada, obligan a los emprendedores a proporcionar instalaciones comunitarias o beneficios económicos a los residentes locales. Los aranceles municipales de desarrollo e impacto inmobiliario, que se utilizan para financiar obras de infraestructura y otras inversiones relacionadas con los emprendimientos, se basan en general en los costos de dichas inversiones, pero sólo generan ingresos cuando la plusvalía excede el costo.

Lo más notable de la experiencia norteamericana es que los términos en sí —contribuciones de valorización o recuperación de plusvalías— raramente se mencionan, si bien los principios se aplican con regularidad. Sin embargo, este país puede aprender lecciones de las nuevas estrategias de recuperación de plusvalías adoptadas internacionalmente.

Las actas de la conferencia, con artículos y comentarios de más de 25 contribuyentes, serán publicadas en mayo de 2012.

Desde la primera reforma económica ocurrida en 1978 hasta la liberalización de inversiones extranjeras y el desarrollo del sector privado que se dio entre mediados de la década de 1980 hasta la actualidad, las principales reformas económicas de China han tenido como prioridad lograr una alta tasa de crecimiento económico. Estas políticas funcionaron tan bien que el PIB per cápita en dólares constantes en China aumentó cerca de un 10 por ciento anual de 1980 a 2010. Este rendimiento en el crecimiento no tiene precedentes en un país de grandes dimensiones, pero ha sido acompañado por incontables costos, tales como la transformación estructural de la economía, el ajuste social y las migraciones y la degradación medioambiental. En un nuevo libro del Instituto Lincoln titulado China’s Environmental Policy and Urban Development (La política medioambiental y el desarrollo urbano en China), editado por Joyce Yanyun Man, se trata el último de estos temas. Según este libro, de acuerdo con las estimaciones realizadas por agencias gubernamentales, los costos medioambientales sin documentar asociados a la producción económica fueron del 9,7 por ciento del PIB en 1999 al 3 por ciento en 2004.

El crecimiento económico en países de bajos ingresos por lo general viene acompañado de costos medioambientales. Este trueque se ve plasmado en la “curva medioambiental de Kuznets”, según la cual la calidad medioambiental se deteriora con el crecimiento económico en los niveles de bajos ingresos y luego mejora con el crecimiento económico en los niveles de ingresos más altos. Según lo indicado en este libro, las estimaciones de la curva medioambiental de Kuznets para las ciudades chinas entre 1997 y 2007 muestran que, durante dicho período, los índices de contaminación industrial en China se redujeron a medida que aumentaron los ingresos, lo que indica que las ciudades con ingresos más altos experimentaron mejoras en estos índices de calidad medioambiental conforme aumentaron sus ingresos.

Varios de los autores de los capítulos de este libro afirman que las políticas medioambientales de China y su rendimiento se encuentran en una etapa de transición. Los indicadores medioambientales están mejorando en respuesta a las nuevas políticas y reglamentaciones, mientras que el crecimiento económico continúa. Al mismo tiempo, China también ha sufrido reveses en este sentido. Por ejemplo, ciertos eventos de gravedad extrema, como la combinación de un clima extremadamente frío con inversiones atmosféricas que se dio este invierno en Beijing, produjeron niveles muy altos de concentraciones de partículas en dicha ciudad.

La lógica detrás de la curva medioambiental de Kuznets implica diferentes elementos, tanto de demanda como de oferta. En cuanto a la demanda, las poblaciones con ingresos más altos demuestran apreciar cada vez más los servicios que tienen que ver con el medio ambiente, por lo que defienden las mejoras medioambientales. Con respecto a la oferta, las inversiones en nuevas capacidades hacen uso de equipos modernos con procesos que respetan el medio ambiente y tecnologías de control más accesibles económicamente. Las últimas mejoras medioambientales en China también derivan del fortalecimiento de los entes de regulación ambiental. En 1982, la función que tenía la Agencia de Protección Medioambiental era principalmente de asesoramiento. No obstante, en 1988 se transformó en una agencia nacional; en 1998 se convirtió en un ente más independiente, la Agencia Estatal de Protección Medioambiental; y posteriormente, en 2008, se elevó la jerarquía del ente para convertirse en el Ministerio de Protección Ambiental.

La creciente influencia de las agencias de protección medioambiental centrales se vio acompañada por un cambio en el estilo de las reglamentaciones. El antiguo énfasis que se daba a las normas de orden y control (tales como las normas sobre emisiones) se reemplazó en forma parcial por instrumentos basados en incentivos económicos (tales como los impuestos sobre insumos y el nuevo impuesto sobre emisiones de carbono). Según las investigaciones realizadas, a la fecha la aplicación de las normas de orden y control ha arrojado mejores resultados.

Mientras que las agencias centrales establecieron normas nacionales, la responsabilidad de monitorear y velar por el cumplimiento de dichas normas se descentralizó en gran medida hacia las agencias medioambientales municipales o metropolitanas. El rendimiento de los gerentes municipales se revisa todos los años según criterios que hacen hincapié en el crecimiento económico. Otras mejoras en los resultados medioambientales pueden darse solamente cuando dichos criterios dan un mayor peso a las mejoras medioambientales. Por ejemplo, como consecuencia de haber incluido la reducción de las emisiones de sulfuro como criterio de rendimiento anual, se produjo un rápido aumento en el control de las emisiones de dióxido de sulfuro de las centrales de energía.

Aun cuando a China le resta mucho por hacer para reducir la contaminación del aire urbano, limpiar los ríos y lagos y mejorar la eficiencia en el uso de la energía, estos objetivos están cobrando mucha más importancia para los ciudadanos. La creciente disponibilidad de datos relacionados con los indicadores medioambientales está promoviendo un diálogo nacional respecto de la calidad medioambiental. El nuevo libro de la profesora Man representa un aporte a este diálogo, ya que informa sobre el progreso realizado, identifica los desafíos inmediatos y evalúa las nuevas políticas y enfoques normativos para las mejoras medioambientales.

In the wake of the housing market collapse and the Great Recession—which caused a substantial increase in residential foreclosures and often precipitous declines in home prices that likely led to additional foreclosures—many observers speculated that local governments would consequently suffer significant property tax revenue losses. While anecdotal evidence suggests that foreclosures, especially when spatially concentrated, lowered housing prices and property tax revenue, the existing body of research provides no empirical evidence to support this conclusion (box 1). Drawing on proprietary foreclosure data from RealtyTrac—which provides annual foreclosures by zip code for the period 2006 through 2011 (a period that both precedes and follows the Great Recession)—this report is the first to examine the impacts of foreclosures on local government property tax values and revenues. After presenting information on the correlation between foreclosures and housing prices nationwide, we shift focus to Georgia in order to explore how foreclosures affected property values and property tax revenue across school districts throughout the state. Our empirical analysis indicates that, indeed, foreclosures likely diminished property values and property tax revenues. While still preliminary, these findings suggest that foreclosures had a range of effects on the fiscal systems of local governments.

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Box 1: Existing Research into the Impacts of Economic Factors on Property Tax Revenues

While there is existing research examining the various impacts of economic factors on property tax revenues, these studies use data that reflect only a previous recession (e.g., the 2001 recession) or that cover only the very start of the housing crisis in the Great Recession. Doerner and Ihlanfeldt (2010), for example, focus directly on the effects of house prices on local government revenues, using detailed panel data on Florida home prices during the 2000s. They conclude that changes in the real price of Florida single-family housing had an asymmetric effect on government revenues. Price increases do not raise real per capita revenues, but price decreases tend to dampen them. Doerner and Ihlanfeldt also find that asymmetric responses are due largely to caps on assessment increases, positive or negative lags between changes in market prices and assessed values, and decreased millage rates in response to increased home prices. Alm, Buschman, and Sjoquist (2011) document the overall trends in property tax revenues in the United States from 1998 through 2009—when local governments, on average, were largely able to avoid the significant and negative budgetary impacts sustained by state and federal governments, at least through 2009, although there was substantial regional variation in these effects. Alm, Buschman, and Sjoquist (2009) also examine the relation between education expenditures and property tax revenues for the 1990 to 2006 period. In related work, Alm and Sjoquist (2009) examine the impact of other economic factors on Georgia school district finances such as state responses to local school district conditions. Finally, Jaconetty (2011) examined the legal issues surrounding foreclosures, and the MacArthur Foundation has funded a project on foreclosures in Cook County, Illinois.

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Potential Links between Housing Prices, Foreclosures, and Property Values

Local governments in the United States rely on various own-source revenues, including local income, property, and general sales taxes and specific excise taxes, fees, and user charges. Of these, the dominant source is by far the property tax. In 2011, local property taxes accounted for roughly three-fourths of total local government tax revenues and for nearly one-half of total local own-source revenues (including fees and charges).

Some local taxes, such as income and sales taxes, have bases that vary closely with the levels of economic activity, and the Great Recession seriously depressed revenues from such taxes. The basis of the property tax is assessed value, which does not automatically change in response to economic conditions; in the absence of a formal and deliberate change in assessment, a decrease in the market value does not necessarily translate into a decrease in assessed value. Assessment caps, lags in reassessments, and the ability to make deliberate changes in millage or property tax rates combine so that economic fluctuations that influence housing values may not affect the property tax base or property tax revenues in any immediate or obvious way. Over time, however, assessed values tend to reflect market values, and property tax revenues also come under pressure.

A weakened housing market—with lower housing values and more foreclosures—may reduce local government tax revenues from several sources (Anderson, 2010; Boyd, 2010; Lutz, Molloy, and Shan, 2010), including real estate transfer taxes, sales taxes on home construction materials, and income taxes from workers in the housing construction and home furnishings industries. Because property tax revenues are such a large share of local tax revenue, however, changes in property tax revenues are often larger than the changes from these other housing-related taxes.

Foreclosure Activities Nationwide During and After the Great Recession

Figure 1 (p. 24) presents the total nationwide numbers of foreclosures at the 5-digit zip code level as a share of the number of owner-occupied homes in 2010. This figure demonstrates the clear geographic concentration of foreclosures. Arizona, California, and Florida were especially hard hit by the collapse of the housing bubble. However, other areas also experienced significant foreclosure activity.

The Federal Housing Finance Agency (FHFA) produces a housing price index for each metropolitan statistical area (MSA). We matched the RealtyTrac foreclosure data to the FHFA housing price index for 352 metropolitan statistical areas. Figure 2 (p. 24) presents a simple scatterplot that relates total foreclosures over the years 2006 to 2011 as a share of the number of owner-occupied housing units in 2010, to the change in the housing price index over the period 2007 to 2012 for all 352 metropolitan areas. The simple correlation coefficient between foreclosures per owner-occupied housing units and the change in housing price index is -0.556; if we consider only those MSAs with non-zero foreclosures over the period, the correlation coefficient is -0.739. This simple analysis suggests that foreclosures have a significant negative relation with housing values. The next step is to explore the effect of foreclosures on the property tax base and on property tax revenues. In the next section, we examine this issue for the state of Georgia.

More Detailed Analysis: Foreclosures, Property Values, and Property Tax Revenues in Georgia

By examining the effect of foreclosures on property values and property tax revenues in a single state, we eliminated the need to control for the many ways in which institutional factors may differ across states. Georgia is a suitable focal point because in many ways it is roughly an “average” state. For example, local governments in Georgia rely on property taxes only slightly less than the national average; in 2008, property tax revenue as a share of total taxes for local governments was 65.1 percent in Georgia compared to 72.3 percent of the U.S. (Bourdeaux and Jun 2011).

We measure foreclosure activity with the Realty-Trac data, aggregating zip code observations into the corresponding counties. The Georgia Department of Revenue supplied the annual property tax base (referred to as “net digest” in Georgia) and property tax rates. Property tax and total local source revenues for school districts came from the Georgia Department of Education. The tax base is as of January 1 of the respective year. The property tax rate is set in the spring with tax bills being paid in the fall, the revenue from which would be reported in the following fiscal year. School districts are on a July 1 to June 30 fiscal year, so the 2009 tax base and millage rates, for example, would be reflected in revenues for fiscal year 2010. We also use various demographic and economic data (income, employment, and population) measured at the county level to help explain changes in the base. Because these variables are at a county level, for the analysis that follows, we added the property tax base and revenue variables for city school districts to those for the county school systems in each city’s county to obtain countywide totals for 159 counties. For counties that include all or part of a city school system, the tax rate is the average of the county and city school tax rates, weighted by the respective property tax base.

Only county governments conduct property tax assessment in Georgia, but the state evaluates all property tax bases annually, comparing actual sales of improved parcels during the year to assessed values, and determining if the assessment level is appropriate relative to fair market value, which is legally set at 40 percent. The resulting “sales ratio studies” report an adjusted 100 percent property tax base figure for each school district in the state, along with the calculated ratio. We use these adjusted property tax bases, covering the periods 2000 through 2011, to measure the market value of residential property.

Georgia has very few institutional property tax limitations. School district boards can generally set their property tax rates without voter approval, which is required only if the property tax rate for a county school district exceeds 20 mills. Currently, the cap is binding on only five school systems. Also, there is no general assessment limitation, although one county has an assessment freeze on homesteaded property. In 2009, the State of Georgia imposed a temporary freeze on assessments across the state, potentially affecting property tax revenue only in school year/fiscal year 2010; however, with net and adjusted property tax bases declining on a per capita basis for most counties in 2009 through 2011, it is unlikely that the freeze has constrained assessments.

Foreclosures

Table 1 provides the statewide mean and median number of foreclosures by zip code for 2006 through 2011. Total foreclosures almost doubled between 2006 and 2010, before declining in 2011. The mean number of foreclosures is much larger than the median, implying that the distribution is highly skewed.

Table 2 shows the distribution of Georgia zip codes by the number of years that the zip code had non-zero foreclosures. Over 65 percent of the zip codes had foreclosures in each of the six years, while only 7 percent had no foreclosures in all six years. This distribution suggests that very little of the state was immune to the foreclosure crisis.

Figure 3 (p. 25) shows the distribution of foreclosures across the state over the period 2006 through 2011. Because zip codes differ in size and housing density, we also map the number of foreclosures per owner-occupied housing units for 2010 in figure 4 (p. 25). Note that zip codes marked in white either have no foreclosures or are missing foreclosure data. As one would expect, urban and suburban counties (particularly in the Atlanta metropolitan area) have the most foreclosures. However, there are large numbers of foreclosures in many of the less urban zip codes as well.

Figure 5 shows the annual distribution of foreclosures per hundred housing units in each of Georgia’s 159 counties. Note that the bar in the box represents the median value, the box captures the observations in the second and third quartile, the “whiskers” equal 1.5 times the difference between the twenty-fifth and seventy-fifth percentiles, and the dots are extreme values. The median number of foreclosures by county increased from 0.17 per 100 housing units in 2006 to 1.18 per 100 units in 2010—more than a sixfold increase in the median. There is a high positive correlation between foreclosure activity in 2006 and 2011 across the counties. This correlation is 0.78 when measured relative to housing units and 0.74 when measured on a per capita basis, indicating that counties with above (below) average foreclosure activity before the housing crisis remained above (below) average at its peak.

Property Values

As for changes in property values, figures 6 and 7 show the distributions of annual changes, respectively, in the per capita net property tax base and in the per capita adjusted 100 percent property tax base across the 159 counties from 2001 through 2011. Studies suggest that foreclosures may have spillover effects on the market values of other properties in the jurisdiction (Frame, 2010). We attempt to estimate the effect of foreclosures on market values as measured by the adjusted 100 percent property tax base.

Our results are preliminary, in that the analysis included only Georgia data. Even so, they suggest significant negative effects of foreclosures on property values, controlling for year-to-year percent changes in income, employment, and population. The coefficient estimates on the foreclosures variable suggest that a marginal increase of one foreclosure per 100 homes (or approximately the increase in median foreclosures from 2006 to 2011) is associated with a roughly 3 percent decline in the adjusted 100 percent property tax base over each of the two following years. Similarly, an increase of one foreclosure per 1,000 population is associated with nearly a 1 percent decline in the adjusted 100 percent property tax base after one year, and a slightly lower percent decline in the following year.

Property Tax Revenues

We also explore the effect of foreclosures on property tax revenues. Figure 8 (p. 27) depicts the distribution of nominal changes by county in total maintenance and operations property tax revenues since 2001, showing considerable variation across the school systems in the annual changes in property tax revenues. Even in the latest three years of declining property values, at least half the counties annually realized positive nominal growth in property tax revenue. To understand the effect of foreclosure activity on local government property revenues, we estimate regressions that relate foreclosures to property tax levies and to actual property tax revenues.

We find that a rise in foreclosures is associated with a reduction in the levy, after controlling for changes in the property tax base as well as fluctuations in income, employment, and population. An increase of one foreclosure per 100 housing units is associated with about a 1.5 percent subsequent decline in the levy, all else held constant. We also find that foreclosures have a negative impact on revenues, all else constant. Like our earlier estimates, these results are for Georgia only, but they indicate a significant negative relationship between foreclosures and local government property tax levies and revenues. It may be that higher foreclosure activity makes local officials hesitant to raise property tax rates to offset the effect of foreclosures on the tax base.

Conclusions

How have foreclosures driven by the Great Recession affected property values and property tax revenues of local governments? Our results suggest that foreclosures have had a significant negative impact on property values, and, through this channel, a similar effect on property tax revenues, at least in the state of Georgia. Our results also suggest additional effects on levies and revenues after controlling for changes in the tax base. Further work is required to see whether these results extend to other states.

About the Authors

James Alm is a professor and chair of the department of economics at Tulane University.

Robert D. Buschman is a senior research associate with the Fiscal Research Center in the Andrew Young School of Policy Studies at Georgia State University.

David L. Sjoquist is a professor and holder of the Dan E. Sweat Chair in Educational and Community Policy in the Andrew Young School of Policy Studies.

Resources

Alm, James and David L. Sjoquist. 2009. The Response of Local School Systems in Georgia to Fiscal and Economic Conditions. Journal of Education Finance 35(1): 60–84.

Alm, James, Robert D. Buschman, and David L. Sjoquist. 2009. Economic Conditions and State and Local Education Revenue. Public Budgeting & Finance 29(3): 28–51.

Alm, James, Robert D. Buschman, and David L. Sjoquist. 2011. Rethinking Local Government Reliance on the Property Tax. Regional Science and Urban Economics 41(4): 320–331.

Anderson, John E. 2010. Shocks to the Property Tax Base and Implications for Local Public Finance. Paper presented at the Urban Institute-Brookings Institution Tax Policy Center and the Lincoln Institute of Land Policy Conference, “Effects of the Housing Crisis on State and Local Governments,” Washington, D.C. (May).

Bourdeaux, Carolyn and Sungman Jun. 2011. Comparing Georgia’s Revenue Portfolio to Regional and National Peers. Report No. 222. Atlanta, GA: Fiscal Research Center, Andrew Young School of Policy Studies, Georgia State University.

Boyd, Donald J. 2010. Recession, Recovery, and State and Local Finances. Paper presented at the Urban Institute-Brookings Institution Tax Policy Center and the Lincoln Institute of Land Policy Conference, “Effects of the Housing Crisis on State and Local Governments,” Washington, D.C. (May).

Doerner, William M. and Keith R. Ihlanfeldt. 2010. House Prices and Local Government Revenues. Paper presented at the Urban Institute-Brookings Institution Tax Policy Center and the Lincoln Institute of Land Policy Conference, “Effects of the Housing Crisis on State and Local Governments,” Washington, D.C. (May).

Frame, W. Scott. 2010. Estimating the Effect of Mortgage Foreclosures on Nearby Property Values: A Critical Review of the Literature. Economic Review 95(3): 1–9.

Jaconetty, Thomas A. 2011. How Do Foreclosures Affect Real Property Tax Valuation? And What Can We Do About It?” Working paper presented at National Conference of State Tax Judges, Lincoln Institute of Land Policy, Cambridge, MA (September).

Lutz, Byron, Raven Molloy, and Hui Shan. 2010. The Housing Crisis and State and Local Government Tax Revenue: Five Channels. Paper presented at the Urban Institute-Brookings Institution Tax Policy Center and the Lincoln Institute of Land Policy Conference, “Effects of the Housing Crisis on State and Local Governments,” Washington, DC (May).

Antes de incorporarme al Instituto lincoln de Políticas de Suelo, tuve la responsabilidad de hacer el seguimiento de la ciudad de detroit para la fundación ford durante casi una década. Allí pude ser testigo de primera mano de los desafíos sin precedentes que implicaba la tarea de revertir la suerte de la que fue la ciudad más poderosa e importante de los Estados Unidos de mediados del siglo XX. La magnitud de estos desafíos requirió la coalición de algunos de los mejores y más brillantes reconstructores de comunidades con los que he tenido el privilegio de trabajar. La calidad y el compromiso de este enérgico grupo de funcionarios públicos, líderes cívicos y comunitarios y visionarios del sector privado ayudaron a Detroit a recuperar un futuro brillante.

Uno de los proyectos distintivos llevados a cabo por esta asociación filantrópica pública y privada fue la planificación, la construcción y el financiamiento de la primera inversión de Detroit en obras de transporte público durante más de cinco décadas: el ferrocarril M1, que se inauguró en julio de 2014 gracias a una inversión de fondos privados combinados de más de US$100 millones. El liderazgo de este proyecto no sólo construyó una línea simbólica de ferrocarril liviano de 5,3 kilómetros a lo largo de la avenida Woodward, el eje de la ciudad, sino que también aprovechó la inversión privada para garantizar el compromiso del gobierno estatal y el gobierno federal de crear la primera autoridad para el transporte de la región.

Algunos filántropos líderes a nivel municipal y nacional también recaudaron más de US$125 millones para lanzar la Nueva Iniciativa Económica, un proyecto de 10 años destinado a revitalizar el ecosistema empresarial en la región a través de la incubación estratégica de cientos de nuevos negocios, miles de empleos nuevos y una duradera colaboración a largo plazo entre empleadores y desarrolladores de la fuerza laboral. Además, en lo que podría considerarse como el proyecto colectivo más controvertido y heroico de esta Iniciativa, estos filántropos trabajaron junto con el estado de Michigan para recaudar más de US$800 millones para The Grand Bargain (El gran pacto), mediante el cual no sólo se salvó la legendaria colección del Instituto de Artes de Detroit de la subasta, sino también las futuras pensiones de los funcionarios públicos de Detroit.

Increíblemente, mientras los empresarios sociales hacían lo imposible por recaudar cientos de millones de dólares para ayudar a Detroit, supuestamente la ciudad devolvía al gobierno federal sumas similares en concepto de subvenciones de fórmula no utilizadas. Una ciudad con más de 100.000 propiedades vacantes y abandonadas e índices de desempleo cercanos al 30 por ciento no lograba encontrar una manera de utilizar las subvenciones de las que disponía libremente: sólo debía solicitarlas y monitorear su uso. Los funcionarios públicos de la atribulada Detroit, que se vieron diezmados debido a la pérdida de población y a la insolvencia fiscal de la ciudad, no tenían la capacidad ni los sistemas para gestionar de manera responsable las normas sobre subvenciones federales ni para cumplirlas. Y, en este sentido, Detroit no es muy diferente a otras ciudades industriales históricas u otros lugares con problemas fiscales.

En un informe de marzo de 2015 elaborado por la Oficina de Rendición de Cuentas Gubernamental, denominado “Municipalities in Fiscal Crisis” (Municipios en crisis fiscal) (GAO-15-222), se analizaban cuatro ciudades que se habían declarado en quiebra (Camden, Nueva Jersey; Detroit, Michigan; Flint, Michigan; y Stockton, California), y se llegaba a la conclusión de que la incapacidad de estas ciudades para utilizar y gestionar las subvenciones federales se debía a una inadecuada capacidad del capital humano, a las reducciones de personal, a una capacidad financiera reducida y a sistemas de tecnología informática desactualizados. Los autores del informe también se lamentaban de que estas ciudades no sólo eran incapaces de utilizar las subvenciones de fórmula (por ejemplo, los subsidios en bloque para el desarrollo comunitario que se distribuyen de acuerdo con criterios objetivos, tales como el tamaño de la población o las necesidades de la comunidad), sino que también se privaban repetidamente de solicitar fondos competitivos. En un análisis independiente del año 2012, llevado a cabo por el senador Tom Coburn (Republicano de Oklahoma) y denominado “Money for Nothing” (Dinero para nada), se detectaba una suma de aproximadamente US$70 mil millones en fondos federales que no se utilizaron “debido a leyes mal redactadas, obstáculos burocráticos y mala administración, así como también a una falta generalizada de interés o de demandas por parte de las comunidades a las cuales se habían asignado los fondos”.

¿Cómo puede ser que las ciudades más necesitadas sean incapaces de utilizar la ayuda que tienen a su disposición? No es de sorprender que una ciudad como Detroit, que perdió casi dos tercios de su población en seis décadas, viera una reducción de personal y una disminución de las capacidades de los empleados en las oficinas municipales. Tampoco no es de sorprender que Detroit no tuviera sistemas de tecnología informática actualizados. Cuando un municipio enfrenta problemas fiscales, la infraestructura siempre queda en el último lugar. La incapacidad de utilizar los fondos asignados probablemente no es un pecado de comisión sino una lamentable omisión mucho más profunda que debe solucionarse. Pero ¿dónde comenzamos? Veamos lo que nos dicen los datos. ¿Qué programas de subvenciones de fórmula tienen el menor rendimiento? ¿Cuáles son las ciudades con el peor aprovechamiento? Sin lugar a dudas, no lo sabemos. Y si las agencias federales saben cuáles son los programas y las ciudades que se encuentran en las listas de los mejores y peores, evidentemente no están informando de ello. Además, la mayoría de los ciudadanos en Detroit, que soportan una de las tasas más altas del impuesto sobre la propiedad del país, no saben que su ciudad está desaprovechando millones de dólares en subvenciones federales cada año.

El verano pasado, sin bombo ni platillo pero con gran ambición, el Instituto Lincoln lanzó una campaña mundial para promover la salud fiscal municipal. Esta campaña centra su atención en varios factores que impulsan la salud fiscal municipal, entre los que se incluye el papel que desempeñan los impuestos sobre el suelo y la propiedad con el fin de brindar una base de recaudación estable y segura. En este número de Land Lines, analizamos algunas maneras en que las ciudades y regiones están desarrollando nuevas capacidades (tales como un monitoreo fiscal confiable y una administración transparente de los recursos públicos; comunicación y coordinación efectivas entre el gobierno federal y los gobiernos municipales, de los condados y de los estados; etc.) para superar las barreras económicas y medioambientales más importantes. Analizamos la forma en que las ciudades están mirando dentro y fuera de sus límites para obtener ayuda de otras fuentes. Esperemos que estas historias nos inspiren a trabajar para encontrar formas más amplias, más profundas y más creativas de progresar juntos, en lugar de luchar en soledad.

Dos herramientas tecnológicas que presentamos en este número están modificando la forma en que se organiza y se comparte la información financiera municipal. Estas herramientas permiten a los ciudadanos y al electorado pedir la rendición de cuentas a sus líderes comunitarios y asegurarse de que, una vez que se accione el interruptor de la ayuda económica, se complete el circuito. PolicyMap (pág. 18) se fundó con el objetivo de fundamentar la toma de decisiones públicas basada en datos. Los investigadores de PolicyMap han organizado docenas de bases de datos públicas y han desarrollado una sólida interfaz en la que los usuarios pueden visualizar los datos en mapas. Esta herramienta contiene miles de indicadores que rastrean el uso de los fondos públicos y el impacto que tienen. La ciudad de Arlington, Massachusetts, ha desmitificado sus finanzas municipales mediante el Presupuesto Visual (pág. 5), un programa de código abierto que ayuda a los ciudadanos a entender en qué se gastan los impuestos que pagan. Tanto PolicyMap como el Presupuesto Visual tienen el potencial de rastrear todas las fuentes de ingresos y gastos de una ciudad y hacer que la administración sea transparente para los contribuyentes. Para aquellas ciudades o agencias federales que desean divulgar este tipo de información, estos emprendimientos sociales están listos para rastrear e informar del uso (o la falta de uso) de los fondos públicos.

La alineación vertical de varios niveles gubernamentales para lograr la meta de salud fiscal municipal no sólo es una solución en este país. Nuestra entrevista con Zhi Liu (pág. 30) contiene información sobre las medidas tomadas por el gobierno central de la República Popular China para desarrollar una base de recaudación estable en cada gobierno municipal a través de la promulgación de una ley del impuesto sobre la propiedad; esta medida ayudará a los gobiernos municipales a sobrevivir a las arenas movedizas de la reforma del suelo.

En nuestro informe sobre Working Cities Challenge (Desafíos para Ciudades en Funcionamiento) (pág. 25), los investigadores del Banco de la Reserva Federal de Boston identifican lo que posiblemente es la capacidad más importante para promover no sólo la salud fiscal municipal sino también ciudades prósperas, sustentables y resilientes: el liderazgo. El liderazgo —que puede provenir de funcionarios públicos visionarios, emprendedores cívicos audaces o implacables académicos peripatéticos— está en la esencia de otros casos inspiradores que analizamos en este número. Los líderes en Chattanooga (pág. 8) hicieron una apuesta fuerte por la infraestructura (servicio de Internet de altísima velocidad a bajo costo, proporcionado a través de una red municipal de fibra óptica) con el fin de ayudar a la ciudad a pasar de ser una ciudad industrial retrógrada y contaminada a un centro tecnológico moderno y limpio. Y funciona.

Super Ditch (pág. 10) es otro ejemplo de cómo varios gobiernos pueden trabajar junto con el sector privado con el fin de encontrar soluciones creativas para los desafíos conjuntos. Super Ditch está innovando la gestión del agua urbana y agropecuaria a través de nuevos acuerdos entre el sector público y el sector privado que detienen las antiguas estrategias de “buy-and-dry” (comprar y secar) practicadas por las ciudades con escasez de agua y continúan supliendo la demanda municipal de agua sin despojar a las principales tierras de cultivo de este recurso.

Antes de que nos hallemos inmersos en una interminable polémica partidista acerca de si los gobiernos nacionales deberían rescatar a las ciudades en quiebra, tal vez deberíamos encontrar una forma de garantizar que, en primer lugar, estas ciudades no lleguen a la quiebra, mediante el uso de la ayuda que ya hemos prometido. Sólo un sádico o un cínico pondría intencionalmente estos recursos a la vista pero fuera del alcance de las personas o ciudades necesitadas. Si invertimos sólo una fracción de los fondos no utilizados con el fin de desarrollar las capacidades municipales adecuadas, las comunidades podrán solucionar sus propios problemas. Ya sea mediante una asociación filantrópica pública y privada, una herramienta tecnológica innovadora o una nueva forma de cooperación entre los gobiernos y el sector privado, los emprendedores sociales están ampliando la inventiva humana para ayudarnos a superar el mayor desafío que enfrentamos: encontrar nuevas formas de trabajar juntos para no perecer en soledad.

Over the past decade of transition from communist to market economies, property taxation has taken on economic, political and legal importance as the countries in Central and Eastern Europe have developed new fiscal policies and new approaches to property rights. Taxes on land and buildings have served not only as revenue instruments but also as adjuncts to decentralization and privatization. In spite of the complex and varied national differences in this region, a number of common issues have emerged in regard to property-based taxes.

A period of transition places a premium on revenue sources that impose a minimum burden on the functioning of nascent market economies. Many of these postcommunist nations seek to strengthen local government, and all must adjust their tax systems to account for emerging markets for land and buildings at a time when state administrative capacity is challenged by the introduction of new income and consumption taxes. There is often strong support for retaining a public interest in land as a fixed, nonrenewable element of the common heritage which, once sold, cannot be reproduced. This sentiment coexists with an equally strong impetus for development of private business and private ownership of property. Each of these concerns raises special questions with regard to the role of land and building taxes in the transition.

Such taxes on land and buildings have already been designated as local revenue sources in many nations of Central and Eastern Europe. As a tax base that cannot relocate in response to taxation, real property permits an independent local revenue source. Times of fiscal stringency at national government levels dramatize the importance of such revenue for local governmental autonomy. Moreover, the goal of eventual international integration through the European Union and other trade arenas encourages development of taxes not subject to international competition.

Two primary difficulties confront efforts to implement land and building taxes in these countries. First, in the absence of developed property markets, the tax base requires a choice among formulary values, price approximations, and non-value means of allocating the tax burden. Second, times of financial hardship present special problems in imposing taxes on assets that do not produce income with which to pay the tax. This dilemma has left many property taxes at nominal levels.

These problems are closely related because the lack of reliable market prices, together with the legacy of officially determined price levels, can encourage legislation that assigns specific, sometimes arbitrary values to various classes of property for tax purposes. Given these difficulties, it is particularly significant that many of these nations have either adopted or are seriously considering some form of value-based taxation of immovable property as a source of local government finance.

The Case of Lithuania

Since declaring its independence from the USSR in 1991, the Republic of Lithuania has made rapid strides in economic reforms, privatization and government reorganization. Its plans for market value-based taxation of land and buildings reflect the country’s transition to a market economy and private ownership of property. Municipalities will receive the revenues from the new tax and will have the power to choose the tax rate, subject to an upper limit set by the national government. The Lithuanian Parliament has recently prepared draft legislation for this tax which assigns responsibility for developing a valuation system to the State Land Cadastre and Register (SLCR).

The SLCR was created in 1997 to consolidate a number of functions: registration of property rights, maintenance of a cadastre of property information, and valuation of real property for public purposes, including taxation. Since then the agency has organized a central data bank for legally registered property rights, land and building information, and Geographic Information System (GIS) maps. The data bank currently holds information on more than four million land parcels and structures, and it is linked to mortgage and other related registers and to branch offices throughout the country.

The proposed market value-based real property tax will replace two existing taxes on real property commonly found in post-Soviet systems: a land tax on privately owned land and a property tax on buildings and other property (not including land) owned by corporate entities, enterprises and organizations. Taxable values are currently set by the SLCR through application of varying “coefficients” that adjust base prices to reflect land use and location. The resulting values do not reflect current market prices. The tax rate of 1.5 percent of the taxable value for land and 1 percent of the taxable value of property yielded represent approximately 7 percent of local budgets and 2.5 percent of the national budget in 2000.

Lithuania’s growing demand for market-based property valuation data requires an increase in professional appraisal skills and experience with assessment administration. To address these needs, an Association of Property Valuers and a system of professional certification were established in the mid-1990s, in collaboration with other international valuation associations. Lithuania has also joined Estonia and Latvia in publishing periodic reviews of real estate markets in the Baltic states. Information regarding market activity is posted on the SLCR’s website www.kada.lt.

Lincoln Course

The Lincoln Institute has taught courses on property taxation in transition countries for nearly a decade, and in February the Institute collaborated with SLCR to develop a curriculum for seven senior public officials from Lithuania. The week-long program was based on the course that the Institute presented, in cooperation with the Organisation for Economic Cooperation and Development (OECD), in the Lithuanian capital of Vilnius in December 1997, for government officials from Estonia, Latvia and Lithuania. Recognizing the importance of this year’s program to Lithuanian public policy, the United Nations Development Programme (UNDP) provided support for the delegation’s travel to Cambridge.

The program offered a policy-oriented analysis of issues relating to market-based tax systems. It included guidance in developing a strategic plan and a legal and administrative framework for a computer-assisted mass appraisal (CAMA) system suitable to Lithuania. Technical subjects were presented in the context of larger economic and political issues in land and property taxation. The course combined lectures, discussions with experienced practitioners, case studies, and field visits to state and local agencies in Massachusetts. Lectures addressing introductory, policy-focused subjects were supplemented by more specialized presentations covering market value appraisal techniques, mass appraisal, CAMA and tax law.

The Lincoln Institute will offer similar courses to public officials from other transition countries, and is continuing to develop other educational programs with Lithuania and its Baltic neighbors.

Jane H. Malme is an attorney and a fellow of the Lincoln Institute in the Program on Taxation of Land and Buildings. She has developed and taught courses on property taxation and has been a legal advisor to public finance officials in Central and Eastern Europe. She is co-editor with Joan Youngman of The Development of Property Taxation in Economies in Transition: Case Studies, a book being published in 2001 by the World Bank.

Public officials from Lithuania and Lincoln Institute faculty members met at Lincoln House in February to learn from each other about market value-based taxation policy and plans for introducing property taxation in Lithuania.

Delegates from Lithuania: Arturas Baksinskas, Vice-Minister of Finance; Dalia Bardauskiene, Advisor to the Prime Minister on Rural and Urban Development and Planning; Algirdas Butkevicius, Member of Parliament on Budget and Finance Committee; Rimantas Ramanauskas, First Deputy Director, SLCR; Albina Aleksiene, Advisor to the General Director on Property Valuation, SLCR; Arvydas Bagdonavicius, Deputy Director, SLCR; Algimantas Mikenas, Deputy Head of Property Valuation and Market Research Department, SLCR.

Lincoln Institute Faculty: Joan Youngman, Senior Fellow and Director, Lincoln Institute Tax Program; Jane Malme, Fellow, Lincoln Institute Tax Program; Dennis Robinson, Vice President, Lincoln Institute; Richard Almy and Robert Gloudemans, partners, Almy, Gloudemans, Jacobs and Denne , LaGrange, Illinois; John Charman, Consultant Valuation Surveyor, London; David Davies, Director of Information Technology, Massachusetts Department of Revenue; Jeffrey Epstein, Consultant, Quincy, Massachusetts; Sally Powers, Former Director of Assessment, City of Cambridge.

The demand for urban services surpasses the financial capacity of most cities around the world. To address this problem, many municipal governments successfully use the property tax, combined with other management instruments, to raise needed revenues. In Central America, El Salvador is the only country that does not currently have a tax on land and buildings. However, public officials, academic experts and business leaders have begun to discuss the necessity of establishing a property tax system and strategies for its implementation.

El Salvador’s taxation system is recognized as being inequitable and the amount of tax actually collected is very low, thus affecting the level of public investment. Decades of civil war and economic chaos left the country without an established tradition of fiscal management and controls. Changes in the taxation system began in 1993 when the former patrimonial tax on personal and business property, including real property, and the 5-percent sales tax were both abolished and replaced by a 13-percent sales tax. These taxes, and an ongoing income tax, are all collected by the central government.

The only municipal tax is an archaic and complex tax based on commercial, industrial, financial and services activities. Because of their limited capacity to raise revenues, municipalities have few opportunities to contract loans from national banks and no possibility of obtaining loans from international financial institutions. Administrative deficiencies, cadastral problems and limitations of the legal framework also contribute to the weak financial base of the municipal governments. Since metropolitan San Salvador encompasses such a large part of this small country, local taxation and other fiscal planning programs introduced there have a significant impact on the entire country.

In 1998 the Municipal Council of San Salvador proposed increases in its business activity tax, raising immediate debate among business organizations and municipal officials. Business leaders argued that the proposed tax program would generate additional costs, compelling them to raise the price of goods and services and possibly provoking inflation. They demanded incentives for new development in exchange for any changes in the tax system. The Municipal Council defended its proposal, arguing that the current tax structure was seriously inequitable because it punished smaller enterprises while offering advantages to larger ones.

The Municipal Council of San Salvador and the Trade and Industry Chamber of El Salvador formed a joint commission to investigate the complex issues involved in the proposed tax reform, and the preconditions such as updated cadastres, the legal framework and technical training that would be necessary. While no concrete mechanisms for implementing land and building taxation were incorporated into the discussion, it was significant that these key stakeholders reached consensus on the need for a property tax in the future.

Benefits of an International Perspective

In a precedent-setting meeting of public officials and private stakeholders in January 1999, the Lincoln Institute and the Planning Office of the Metropolitan Area of San Salvador (OPAMSS) examined many issues regarding the development and implementation of a property tax system. This was the third in a series of Institute-sponsored programs designed to share international expertise and to help develop a new framework for a more equitable tax system in El Salvador.

Particularly in a small country like El Salvador, an adequate property tax system can have positive and strategic effects not only on local finances but also on macro-economic policies and on the re-engineering of a country’s financial sector. Alven Lam, a fellow of the Lincoln Institute, explained that restructuring the taxation framework has been essential to allow some Asian countries, such as Japan, Thailand and Indonesia, to recuperate from their economic crises. The recent fiscal problems in Brazil and ongoing debate about the functioning of the financial sector in El Salvador added a sense of urgency to this discussion of the broader economic context of a local property tax.

The seminar also addressed the importance of integrating land and building taxation as a fundamental tool to promote effective urban land management. Vincent Renard of the Econometric Laboratory of the Polytechnic School in Paris commended the initiative taken by the San Salvador Municipal Council and other local governments to modify their taxation structures, but stressed that these policies can not be isolated from an overall understanding of real estate markets. He also criticized urban planning approaches, such as the current tendency in El Salvador, to over-regulate land use through legal measures without any link to land taxation and fiscal incentives.

A third area of concern to the policy debate was the political and economic implications of property taxation. Among other things, it is critical that those involved in establishing a property tax system consider the political culture of the society, the consolidation of municipal autonomy, the transparency of real estate markets, and the use of the property tax as a tool for economic and social development. Julio Piza, from Externado University in Bogota, described different applications of the property tax in Colombia. He highlighted a common problem, the difficulty of measuring the land and building tax bases due in large part to obsolete current cadastres and the lack of other land information systems.

Although discussion of property tax reform in El Salvador has been overshadowed by recent national elections, the new president has expressed interest in land and tax policy. Among the seminar participants were many municipal and national leaders from the political and business sectors who are committed to modernizing their municipal taxation and fiscal management programs. The fact that they met to openly discuss these difficult issues is a hopeful sign. Key factors for future progress include the political will to promote a local property tax, the continued involvement of the business community, and recognition that the tax is both a practical financial instrument to meet immediate needs and an important tool for economic growth and urban development.

A major challenge for El Salvador, as for other countries experiencing social and economic transitions, is establishment of equitable and effective provisions for property valuation and tax collection. Starting with a simple rate structure and gradually introducing more sophisticated instruments can ease the implementation process. Issues such as innovative urban land management and the possibility to capture increments in land value are also critical for the future fiscal growth of El Salvador.

Patricia Fuentes is subdirector of Urban Development Control and Mario Lungo is executive director of the Planning Office of the Metropolitan Area of San Salvador (OPAMSS).

Municipal Revenues

Metropolitan Area of San Salvador, 1993

Sources of revenue:

a) Municipal taxes 41%

b) Tariffs and user fees 36%

c) Transfers from central government 8%

d) Other municipal revenues 5%

e) Loans 4%

f) Other sources 6%

Revenues per capita (US $) $15.59

Capital investment per capita (US $) $1.04

Debt service as a percentage of total expenses 6.55%

Source: Indicadores Urbanos y de Vivienda, Vice Ministerio de Vivienda y Desarrollo Urbano, 1996, San Salvador.

Q. You have been at the helm of the Lincoln Institute since May 1. What aspect of the program has captured most of your attention in the past few months?

A. My first task has been to work with the staff to develop a more focused direction for the Institute’s programs over the next several years. Without question, we are going to continue the Institute’s commitment to quality research, education and publications programs. We want to both raise the level of debate through our research and publications and also meet our educational objective of directly helping public and private decisionmakers improve their understanding of land-related issues.

To both sharpen and narrow our program focus, we have identified three substantive areas or clusters where we will concentrate our efforts:

• taxation of land and buildings;
• land values, property rights and ownership; and
• land use and regulation.

Q. Can you elaborate on these topics?

A. Sure, although it is hard to do so in a few words. We are still working on the language to better describe these important areas of inquiry.

In the area of taxation of land and buildings, we are interested in the special nature of taxes on real property, particularly those based on market value. We address the economic effects of such taxes, their legal structure and interpretation, especially with regard to valuation. We are also interested in political aspects of implementing property taxes, particularly as instruments of fiscal decentralization. Our work provides practical assistance to policymakers dealing with existing tax systems and also explores current tax reform efforts around this country and overseas.

In the area of land values, property rights and ownership, we consider the elements that determine land value and what portion of that value may properly be claimed by various sectors of society, including the public sphere. This focus area, therefore, touches upon the larger issue of property rights, the operations of formal and informal land markets in creating and distributing land value, and methods for recovering the costs of public investment in land.

In the area of land use and regulation, we focus on the process, plans and policies that affect the development of land, especially in urban “fringe” areas most at risk from changing land uses. We also investigate issues around the reuse of vacant and underutilized land and the conservation of undeveloped land. While we are interested in the economic efficiency of the use of land, we take a more comprehensive perspective for evaluating land use and its regulation. We seek to understand how the development, reuse and conservation of land affect other public values and goals, such as access to land, fairness, the character of society and the quality of life.

Q. How do you implement specific programs to address these issues?

A. The Institute has three major program components, each of which is involved with all three focus areas. Through our research program, we support scholarly projects to improve our understanding of land and taxation issues and to develop new ideas that integrate theory and practice. The education program presents courses, conferences, seminars and policy discussion workshops taught by scholars and practitioners with varied academic backgrounds and professional expertise. The publications program develops and produces newsletters, books, policy focus reports, working papers, and other media to communicate the results of our own research and education programs and the work of other colleagues in the field of land policy.

Q. Who are your major constituents and how do you reach them?

A. The Institute’s major constituents are public officials and other citizens who are actively involved in making decisions about the taxation, regulation and use of land. As an educational institution, we bring together varying viewpoints to expand the body of useful knowledge about land and tax policy and to make that knowledge accessible and comprehensible. Our objective is to provide practical assistance to policymakers, while at the same time exploring alternative approaches, both in the U.S. and internationally.

We are in the process of establishing advisory groups composed of scholars and practitioners to help us continue to refine the three focus areas. They will offer valuable assistance in guiding and evaluating the collaborative research, education and publications programs in each area. We are also developing a more focused approach to outreach and marketing. This will benefit individual courses and publications, as well as our overall goal of sharing ideas and resources through a growing variety of face-to-face meetings and electronic opportunities, such as our World Wide Web Home Page and other multi-media delivery systems.

Q. Looking forward to the Lincoln Institute’s 25th anniversary in 1999, how would you characterize the organization’s mission for the twenty-first century?

A. The Institute owes its existence to two visionaries who came of age in the late nineteenth century, Henry George and John C. Lincoln. George was an economist and social philosopher best known for his book, Progress and Poverty, in which he argued that the ownership, use and taxation of land has far-reaching effects on economic growth, social relations and politics. His work captured the attention of Cleveland industrialist John C. Lincoln, who established the Lincoln Foundation in 1947 to support further study and inquiry into George’s ideas.

Many of the problems that George decried in the late nineteenth century are still with us at the end of the twentieth. This summer I commissioned eight scholars to review George’s writings and document his insights on land use and taxation problems in terms of their relevance for the next century. We will report more on this research in subsequent issues of Land Lines.

It is my hope that all of us connected with the Institute–Board members, staff, research and faculty associates, and the policymakers and citizens whom we reach through our education and publications programs–can make progress on understanding contemporary issues of property valuation, taxation and land use. In the process we will fulfill our mission of contributing to the ongoing debate over land and tax policies that can benefit all sectors of society.

Last October the Lincoln Institute sponsored the fourth annual symposium for recipients of David C. Lincoln Fellowships in Land Value Taxation (LVT). This fellowship program was established to provide funding for in-depth research by scholars and practitioners working on various aspects of the tax and to present a forum for continued learning and sharing among the fellows and Institute faculty.

The fellowship topics include theoretical or basic research as well as research on practical aspects of the administration and implementation of LVT in the U.S. and around the world. This focus on practicality is appropriate since these fellowships are named for David C. Lincoln, the chairman of the Lincoln Foundation and founding chairman of the Lincoln Institute, who has continually challenged the Institute and the fellows to answer such questions as, how can we get LVT put in place and how can we demonstrate the impact?

This year’s symposium presentations reflect the diversity of the work supported by the program. Richard England reported on his efforts to measure the feasibility of getting a two-rate tax adopted in New Hampshire (see page 8 of this newsletter). He developed a model to estimate the number of taxpayers who would gain or lose with various forms of the two-rate tax. His research suggests that to gain support from taxpayers a new two-rate tax needs to be coupled with some kind of tax credit.

David Brunori conducted a national survey of state legislators who sit on finance or tax committees to determine their familiarity with land value or two-rate tax schemes. To his surprise most were familiar with the two-rate tax and believed that a movement to use it would stimulate economic development. Given that favorable view toward LVT, he was hard pressed to explain why so few policy initiatives have moved in this direction.

Other fellows focused on LVT experiences outside the U.S. Frances Plimmer and Greg McGill reported on their updating of the classic case study of property values in the town of Whitstable in the United Kingdom. Riel Franzsen and William McCluskey reported on their cataloging of all of the LVT efforts in 37 of the 54 member states of the British Commonwealth. Yu-Hung Hong described the existing tax structure on property in the People’s Republic of China and suggested alternative schemes for introducing an expanded LVT system as part of the taxation reform presently being considered there.

On a more empirical track, Suzi Kerr reported on efforts to measure the revenue requirements of growing and declining communities in New Zealand, and Courtney Haff reported on econometric efforts to estimate land value in New York City. All of these papers will be available on the Lincoln Institute’s website when they have been completed.

The list of fellows and their research topics for 2003–2004 is shown on pages 16-17 of this newsletter. Again, the diversity of topics reflects the Institute’s continued support for investigations into viable experiments with the LVT and examples of how to measure the impact. I look forward to the results of this work and the discussion at the next symposium.