Since first holding democratic elections at the national and provincial levels in 1994, South Africa has undertaken far-reaching constitutional changes. Arguably, the most fundamental transformation is taking place at the local government level, where the divisions created by apartheid were most severe. These changes were set in motion by the Local Government Transition Act of 1993, and during 1994-1995 the formerly racially segregated urban local authorities were amalgamated into a variety of non-racial transitional councils:

• in metropolitan areas, transitional metropolitan councils (TMCs) with constituent transitional metropolitan local councils (TMLCs);
• in secondary cities and towns, transitional local councils (TLCs); and
• in rural areas where no primary municipalities existed in the past, transitional representative councils (TRepCs) or transitional rural councils (TRCs).

In non-metropolitan areas, the former regional services councils were transformed into district councils, thereby retaining a secondary tier of local government in rural areas.

In March 1998 the national government published the White Paper on Local Government, which set out its vision for the future of local government. The White Paper resulted in passage of the Local Government Demarcation Act and the Local Government: Municipal Structures Act. Under the Demarcation Act, the Municipal Demarcation Board was established to assign new boundaries for the different categories of municipal governments throughout the country. The present 843 transitional municipalities are to be severely reorganized after the local elections in November 2000 into 284 newly demarcated municipalities (see Table 1).

Within the six metropolitan areas to be established, single-tier metropolitan municipalities will replace the TMCs and TMLCs. In the non-metropolitan areas 47 district municipalities will replace the present 42 district councils. Each district municipality will consist of two or more (primary-tier) local municipalities to replace the present local and rural councils. A typical future local municipality will consist of a number of neighboring towns and their rural hinterland. In sparsely populated rural areas where the establishment of a local municipality is not viable (designated as district management areas), a district municipality will be the only form of local government.

Municipal Finance Reform

The structural reforms at the local government level also require reform of municipal finances. The government is currently preparing two important pieces of legislation in this regard, the Local Government: Property Rates Bill (dealing exclusively with property taxation) and the Municipal Finance Management Bill.

Section 229 of South Africa’s Constitution guarantees “rates on property” (i.e., the property tax) as an autonomous source of revenue for municipalities. It states that the “power of a municipality to impose rates on property…may be regulated by national legislation.” National framework legislation regarding the property tax is indeed needed for the following reasons:

• Property tax is currently levied in terms of four outdated provincial ordinances retained from the apartheid era (e.g., it is not presently possible to utilize computer-assisted mass appraisal (CAMA) because physical inspections of each rateable property is legally required).
• Property tax is presently levied only by urban municipalities.
• The future amalgamation of urban and rural councils (i.e., the structural changes to date and still to be effected) necessitates change.
• The amalgamation of racially segregated urban municipalities has resulted in a number of constitutional challenges.
• It is the most important own-tax instrument at the local government level, accounting for 19 percent of total local government operating income (Budget Review 2000).

Therefore, the Local Government: Property Rates Bill, currently in its 10th draft, is to be welcomed, at least in principle. It has not yet been published for public comment and may be further amended. However, when this bill is eventually passed into law, it will regulate the levying, assessing and collection of property taxes by municipalities.

Policy Issues in the Property Rates Bill

Diversity of Tax Bases

Urban municipalities generally have a choice between three tax bases, which are spread remarkably evenly throughout the country:

• Site rating (rating land values only) is prevalent in at least three of South Africa’s nine provinces (Gauteng, Northern Province and Mpumalanga);
• Flat rating (rating improved capital values) is dominant in the Western Cape; and
• Composite rating (rating land values and the value of improvements, but at different tax rates) is most commonly used in KwaZulu-Natal.

Earlier drafts of the Property Rates Bill retained this diversity as well as local choice. However, clause 5(1) of the 10th draft of the bill now states that a rate levied on property “must be…an amount in the Rand (South Africa’s currency) determined by the municipality on the improved value of the property.” Although it seems that government has opted for a single tax base (i.e., improved capital value), the bill goes on to provide that a rate levied on the “improved value of property may be composed of separate amounts on the site value of the property and the value of the improvements.” By implication, therefore, composite rating and site rating have been retained (if the amount in the Rand on improvements is set at zero).

Extension of the Tax Base and Possible Exclusions

In principle a municipality may tax “all property in its municipal area,” including areas where the property tax has not been levied before, such as agricultural and tribal land. However, the bill also allows a municipality to exclude a category or categories of property from rating. These excluded properties need not be reflected in the valuation roll.

McCluskey and Franzsen (2000) suggest several reasons why municipalities should include all properties in the valuation roll, and then allow specific exemptions rather than exclusions from the taxing process. First, it can be difficult to justify and defend exclusions constitutionally; second, it is politically easier to phase out an exemption than to introduce a tax on formerly excluded properties; and third, if properties are not valued and thus not reflected in the valuation roll, the extent of the tax base relinquished through exclusions is not known.

“Public infrastructure” is to be excluded from the tax base. This will have significant implications, particularly for municipalities with large tracts of land owned by public utility companies, and may need to be reconsidered in light of privatization. International practice suggests that public utilities should be rated at least on their operational land.

Differentiation and Phasing-in of Rates

Current legislation only provides for rate uniformity throughout a municipal area. However, municipalities sometimes achieve effective differentiation by granting arbitrary rebates to certain properties on the basis of zoning. For example, all improved residential properties in the Pretoria TMLC are presently granted a 35 percent rebate.

The bill provides that different rates may be levied for different categories of property according to use, status or location-a critical point in light of the extension of municipal boundaries into rural areas. For example, it would be possible for a future local municipality (comprising various small towns, commercial farmland and tribal land) to have the following different property categories (and therefore different tax rates):

• residential properties in a formal township in town A (consisting of generally low-value properties);
• residential properties in a formal township in town B (consisting of generally high-value properties);
• residential properties in an informal (squatter) settlement;
• commercial properties;
• industrial properties;
• commercial farmland;
• tribal land.

However, a municipality will have to justify its differential rate schedule in an annually revised rates policy document presented to all taxpayers. Although municipalities may be permitted to treat ratepayers differently, they must justify this action. The bill also allows for the phasing-in of rates over a three-year period with respect to property not subject to property taxation before 1 July 1999 (e.g., tribal land). In certain instances the period may be extended for a further three years.

Tax Rates

The bill (clause 5(2)) states that municipalities may set their own tax rates. However, the Minister for Local Government, in concurrence with the Minister of Finance, may set a limit or rate cap on the amount. Apart from reducing municipalities’ fiscal autonomy, rate caps set nationally may not reflect differences in taxing capacity that exist between municipalities (see Table 2).

An alternative, and more practical, “capping” measure that has been inserted in the 10th draft (clause 5(3)(a)(ii)) is to limit the annual tax rate increases, not unlike one part of Proposition 13 in California.

Extension of Property Tax to Tribal Land

Extending property taxation to tribal land is an area of major political concern and is fraught with practical problems. “Ownership” of tribal land is not uniform, and some tribal authorities are not prepared to accept any form of local government within their area of jurisdiction, let alone any form of taxation of “their” land. Identifying the taxpayer may be problematic. Furthermore, formal ownership of tribal land seldom reflects the complex system of tenure rights of the individuals entitled to the use of that land. Even if it were possible to identify a taxpayer and establish an assessed value for (tribal) “property,” the abject poverty and inability of residents in many tribal areas to pay any tax will have to be considered. In fact, few tribal areas presently receive municipal services that could justify the introduction of a property tax.

Rates Policy

Clause 13 of the bill requires municipalities to adopt a rates policy and then levy rates accordingly. This is a welcome change. The rates policy, which is to be reviewed annually, must explain and justify the provision of exemptions, rebates, reductions and relief for the poor. This policy should significantly enhance the transparency, efficiency and accountability of municipal councils, and perhaps encourage compliance.

Valuation Quality Control

Another welcome aspect in the bill concerns monitoring valuation quality for equity and consistency across the country. However, the bill (clause 64) confers this responsibility on the Minister responsible for local government. McCluskey and Franzsen (2000) suggest that an independent and professional valuation agency, preferably at the national level, should be established for this highly technical task. Such agencies exist in Australia, New Zealand and Canada. In South Africa, this type of agency should perform the following primary tasks:

• provide technical advice to government on valuation issues and the regulation of the valuation services sector;
• set minimum quality standards and specifications necessary to meet government outcomes;
• monitor and audit the valuations submitted by valuation providers (e.g., municipal valuers) against certain minimum standards; and
• certify to municipalities (and through them to ratepayers) that the resulting valuations meet the minimum standards for a fair and consistent property tax system.

The monitoring service could well be expanded to provide valuation advice, expertise and data to municipalities. Such an agency could also undertake valuations of property for other taxes levied at the national level, such as estate and gift taxes.

Conclusion

The Local Government: Property Rates Bill should provide a solid framework for property taxation as South Africa begins to implement its new local government structure. If municipalities adhere to the principles articulated in the bill, a more uniform, equitable and efficient property tax system will play an even more important role in the future.

Riël C.D. Franzsen is professor in the Department of Mercantile Law at the University of South Africa in Pretoria, South Africa. His research on property tax reform in South Africa has been supported in part by the Lincoln Institute.

References

Budget Review 2000: Chapter 7. South Africa Department of Finance. http://www.finance.gov.za/b/budget_00/default.htm

Franzsen, R.C.D. 1999. Property taxation in South Africa. In W.J. McCluskey (ed.) Property Tax: An International Comparative Review. Aldershot, UK: Ashgate, 337-357.

Local Government: Property Rates Bill. 2000. 10th draft. South Africa Department of Provincial and Local Government.

McCluskey, W.J., and R.C.D. Franzsen. 2000. Some policy issues regarding the Local Government: Property Rates Bill. SA Mercantile Law Journal 12: 209-223.

The Republic of Lithuania, which declared its independence from the USSR in 1990, is the largest and the southernmost of the Baltic countries, with a total area of 65,300 sq. km. and a population of 3.5 million. Although the other Baltic countries introduced market value-based land taxes earlier, Lithuania anticipates that its up-to-date real property information system and administration network, managed by the State Land Cadastre and Register (SCLR), will speed its implementation. SLCR has been assigned the task of valuing property for taxation, and will utilize its computerized real property information system of land and building data for this purpose.

Tax systems in Lithuania, established early in the post-Soviet period, are gradually being reformed to accommodate development of democratic institutions and market economies, and to advance negotiations for entry into the European Union. The Lithuanian Governmental Action Program for 2001-2004 identified the introduction of market value-based taxes on land and buildings as a priority, contemplating an expanded tax base and a greater role for local government in fiscal decision-making.

Taxes on Land and Buildings

Currently there are two national taxes: a 1.5 percent land tax paid by landowners and 1.0 percent property tax on the value of property (excluding land) paid by corporations and other legal entities. The tax proceeds are returned to the municipalities, where in 2001 they provided on average just over 8 percent of municipal budgets. The revenue from the property tax was nearly 10 times higher than the revenue from the land tax, and has increased annually, representing 2.3 percent of national budget revenues. Neither tax has a market value base at present, although some market elements have been introduced gradually in the land tax base.

Development of the Mass Valuation System

Information Systems

Lithuania initiated development of computer-based real property data 10 years ago. Since establishment of the SLCR in 1997, a fully computerized Real Property Registration System links land parcels and buildings, and cadastre and register data into one unified system. The computer network covers the entire country and links counties and districts to the central databank, so that computerized registration of real property can take place in any branch office or client service bureau throughout the country. Analysis of the data permits monitoring of changes in the real property market, statistical analysis, and utilization of computer-assisted mass appraisal techniques. Figure 1 illustrates the current operation of the Real Property Register and flows of information on real property.

As of August 2002 nearly 4.7 million properties were registered, including more than 1 million land parcels, 615,000 buildings, 1.6 million auxiliary buildings, 950,000 flats and premises, and 395,000 engineering constructions. The central databank is expected eventually to register 6 million properties, including 2.3 million land parcels and 3.7 million buildings of different types.

Sales Data

The SLCR has been collecting real property sales information since 1998, and there are a sufficient number of transactions of flats, garages and land parcels to support mass valuation modeling based on market principles. The SLCR has created a databank of real property sales, and when a new real property unit is formed, it is inventoried and described in the Real Property Cadastre and all property rights are registered in the Real Property Register. At the conclusion of a transaction, a new owner registers the ownership in the register, but the data in the cadastre are not changed. When the transaction is registered the sale price indicated in the purchase-and-sale agreement is recorded into the database, allowing the price information to be supplemented by descriptive (cadastral) attributes. Table 1 shows the number of property sales registered during 1998-2001.

Mass Valuation Pilot Project

To prepare for the implementation of value-based real property taxation, the Ministry of Finance assigned to SLCR the task of undertaking a pilot project using mass valuation techniques. The results will be presented to the Ministry of Finance and other interested state institutions.

SLCR’s objectives are to complete the development of a real property mass valuation system to accomplish the following goals:

• introduce data analysis and mass valuation technologies into practice;
• prepare property mass valuation methods, corresponding to Lithuanian conditions;
• train specialists to carry out mass valuation; and
• propose improvements to the real property database and adaptations for purposes of mass valuation.

  At the conclusion, SLCR will be able to analyze various possibilities for introducing a computer-assisted mass appraisal (CAMA) system in Lithuania, and to prepare proposals regarding ad valorem property tax administration and relevant institutional infrastructure development. The project involves 40 property valuers from both SLCR’s central and branch offices, who have been trained by specialists within SLCR and international experts, including the Lincoln Institute, Organisation for Economic Co-operation (OECD), Swedesurvey and the Finnish National Land Survey.

Progress of Project Implementation

Property valuations have been nearly completed in the 11 municipalities selected as demonstration projects, one located in the territory of each SLCR branch office. The experience gained from these pilot projects will be valuable in extending the valuation throughout the entire country. Table 2 summarizes the progress made by SLCR and the Ministry of Finance in completing various steps in the implementation of the mass appraisal system.

Kestutis Sabaliauskas is director general of the State Land Cadastre and Register (SLCR) of Lithuania and Albina Aleksiene is chief of the Market Data Analysis Group.

A History of SLCR and Lincoln Institute Collaboration

The Lincoln Institute and the Lithuanian State Land Cadastre and Register (SLCR) have been collaborating on a series of seminars and research studies since 1997, in preparation for the introduction of market value-based taxation of real property in this Baltic country. A May 2001 Land Lines article, “Market Value-Based Taxation of Real Property,” reported on a weeklong course presented in February 2001 at the Lincoln Institute for a group of senior-level public officials from Lithuania. Participants included representatives from Parliament, the Prime Minister’s office and the Ministry of Finance; the United Nations Development Program provided financial support for the program. Their visit was important both in developing knowledge of real property taxation systems and in creating a working group of representatives from different governmental institutions who were eager to cooperate in establishing an up-to-date taxation system in Lithuania.

In November 2001, the Institute conducted a follow-up series of programs on market value-based taxation in Vilnius for representatives from institutions including the Government of the Republic of Lithuania, several ministries, the Tax Inspectorate, the Association of Municipalities, and the Lithuanian Association of Property Valuers. A second seminar, “Value-Based Taxation Of Real Property in the Baltic Countries: A Comparative Review,” drew participants from Estonia, Latvia and Lithuania to discuss the progress of property tax reforms and shared experiences in undertaking mass valuations. A third seminar, organized in cooperation with the Committee of Budget and Finance of the Lithuanian Parliament, attracted many members of Parliament and top-level governmental officials involved in shaping various aspects of tax policy: policy considerations in introducing a real property tax based on market value; the challenges and benefits of value-based taxation; and ways of implementing an efficient real property tax acceptable to the general public in Lithuania. Over 100 representatives of various institutions of Lithuania and the Baltic States attended one or more of these November seminars.

In May 2002 a faculty group organized and sponsored by the Lincoln Institute visited Lithuania for another series of meetings and briefings organized by SLCR to explore effective approaches to implementing value-based real property tax system. SLCR staff presented extensive information on its activities and readiness to perform mass valuations at central headquarters as well as local offices, where most property valuers work. One outcome of the May meetings is development of an educational program on mass valuation using Lithuania as a case study, which may be valuable to other countries in economic transition. This case will be presented during the next collaborative program to be held in Vilnius in 2003.

Lincoln Institute faculty participating in these programs are Joan Youngman, senior fellow and chairman of the Institute’s Department of Valuation and Taxation; Jane Malme, fellow of the Lincoln Institute; Richard Almy and Robert Gloudmans, partners in Almy, Gloudemans, Jacobs & Denne, Phoenix; and John Charman, consultant valuation surveyor, London.

A major tragedy of empirical work is the low ratio of analysis to data, in part due to the lack of publicly available datasets. Many data collectors are reluctant to share data with other researchers until they have harvested all its new insights. Accordingly, researchers often collect new data because they cannot access existing information.

A new initiative of the Lincoln Institute is to compile data relevant to the analysis of land and tax policy, make it available on our Web site, and encourage new research. Three very different datasets are currently available, and a fourth is under development.

Significant Features of the Property Tax. This database title refers to the well-known publication, Significant Features of Fiscal Federalism, produced by the Advisory Commission on Intergovernmental Relations, which between 1959 and 1996 reported on the relationships among local, state, and national levels of government. This online and interactive database, produced and continually updated in partnership with the George Washington Institute of Public Policy, presents property tax data for all 50 states

Great care is taken to ensure that data reported across jurisdictions are comparable and similarly defined. Users may access property tax information and data online in standard tables or create new downloadable tables containing the specific data they seek. Unlike many interactive databases, Significant Features also includes many table entries in text that explain, for example, how each state categorizes property, defines taxable value, and restricts or caps rates and assessments.

Land and Property Values in the U.S. These more traditional tabular files contain numeric data on the values and rents of residential properties in the United States. The national ratio of rents to prices for the stock of all owner-occupied housing is available quarterly from 1960 to the present. National indices of prices and values of housing (land inclusive of structures), land, and structures are available quarterly from 1975 to the present and annually from 1930 to the present. For 46 metropolitan areas, quarterly indices of prices and values of single-family, owner-occupied housing (land inclusive of structures), land, and structures are available from 1985 to the present.

The implicit rents of owner-occupied housing, the value of structures, and the value of residential land are rarely observed directly, and therefore are estimated using techniques that are explained on the Web site. These data were created and are updated by Morris A. Davis, a fellow at the Lincoln Institute and faculty member at the University of Wisconsin School of Business, Department of Real Estate and Land Economics.

University Real Estate Development Cases. Many university real estate development projects involve the expansion of facilities, the upgrading of neighboring properties, and long-term investment in real estate. Such projects are often controversial when they displace current residents and businesses or transform neighborhoods. As part of the Lincoln Institute’s research on town-gown issues, this database presents quantitative and qualitative information on 897 projects that are outside traditional campus boundaries. These cases provide a useful composite picture of recent university real estate activities.

Digital Maps of Urban Spatial Extension. Visiting fellow Shlomo Angel is examining the spatial growth of a sample of global cities and has created a set of digital maps derived from satellite data and historic sources. Focusing on measures of developed versus undeveloped land, the maps form the basis for several Lincoln Institute working papers on the spatial growth of cities over time. The maps will exist as digital files that can be downloaded and analyzed by others who want to pursue related work.

These datasets are the Lincoln Institute’s first steps toward increasing the availability of data to researchers, analysts, policy makers, and concerned citizens with an interest in land policy and taxation. The information is freely accessible on the Tools and Resources section of the Institute Web site at www.lincolninst.edu.

Karl E. Case is professor of economics emeritus at Wellesley College, where he held the Katherine Coman and A. Barton Hepburn Chair in Economics and taught for 34 years. He is currently a senior fellow at the Joint Center for Housing Studies at Harvard University.

Professor Case is also a founding partner in the real estate research firm, Fiserv Case Shiller Weiss, Inc., and serves as a member of the Board of Directors of the Depositors Insurance Fund of Massachusetts. He is a member of the Standard and Poors Index Advisory Committee, the Academic Advisory Board of the Federal Reserve Bank of Boston, and the Board of Advisors of the Rappaport Institute for Greater Boston at Harvard University. He has served as a member of the boards of directors of the Mortgage Guaranty Insurance Corporation (MGIC), Century Bank, Lincoln Institute of Land Policy, and the American Real Estate and Urban Economics Association. He was also an associate editor of the Journal of Economic Perspectives and the Journal of Economics Education.

After receiving his B.A. from Miami University in Ohio in 1968, he spent three years on active duty in the Army and received his Ph.D. in economics from Harvard University in 1976. His research has been in the areas of real estate, housing, and public finance. He is author or coauthor of five books including Principles of Economics, Economics and Tax Policy, and Property Taxation: The Need for Reform, and he has published numerous articles in professional journals. Principles of Economics, a basic text coauthored with Ray C. Fair and Sharon Oster, is in its tenth edition.

Land Lines: How did you become involved with the Lincoln Institute of Land Policy?

Chip Case: I learned about the Lincoln Institute in the 1970s, when it was sponsoring conferences for the Taxation Resources and Economic Development (TRED) Committee. I had written my dissertation on property taxes and had been invited to attend one of those conferences. In the fall of 1980, I began my first sabbatical year from Wellesley College and needed a way to fund my research. I arranged a meeting with Arlo Woolery, who was executive director of the Institute at the time, and he agreed to support my work.

My relationship with the Lincoln Institute has continued over the four decades since then. I was on the Board of Directors in the mid-1990s and on the executive search committees for H. James Brown, the former president of the Lincoln Institute, and Gregory K. Ingram, the current president and CEO. I taught at many Institute-sponsored programs with the Land Reform Training Institute (now the International Center for Land Policy Studies and Training) in Taiwan for 15 years, and have participated in programs in Cuba and China multiple times as well.

Much of my research is in the spirit of what the Institute is about, and I continue to make regular presentations at various conferences and seminars. I was especially pleased to be involved with a conference on “Housing and the Built Environment: Access, Finance, Policy,” held in Cambridge in December 2007. The Institute later published the papers and commentaries as “Essays in honor of Karl E. Case” in a volume titled Housing Markets and the Economy: Risk, Regulation, and Policy, edited by Edward L. Glaeser and John M. Quigley.

Land Lines: What sort of work have you done for the Lincoln Institute recently?

Chip Case: Earlier this year I served as a discussant for the “Urban Economics and Public Finance Conference,” which was organized by Lincoln Institute visiting fellow Daniel McMillen with the Department of Valuation and Taxation. This annual program brings together leading scholars in the fields of urban economics and public finance to present and discuss their research. It’s a great forum and a good opportunity to showcase new empirical work.

I also recently returned from a Lincoln Institute program in Beijing, where I gave a series of lectures to planners and economists at the Peking University–Lincoln Institute Center for Urban Development and Land Policy. My role was to help decipher what has been happening in the U.S. housing market and to provide insight into the relationship between the housing market crash and the current financial crisis.

Chinese officials are very interested in learning from the market experience of the United States. To say that the housing market in China is in a boom period would be an understatement. In most cities, the market is straining under the limited amount of available land and insufficient infrastructure. The government has recognized that the rapid growth poses a challenge to its market authority and at the same time realizes that the growth can be harnessed as a source of potential revenue for the country’s cities.

Land Lines: What did you learn about the problem of local government finance in China?

Chip Case: Local governments in China own all the land inside their jurisdictions, and they have traditionally raised money by signing long-term leases on that land with joint ventures and other business interests that then use the land for development. The revenue from these leases has enabled local jurisdictions to provide the necessary public goods and infrastructure without ever collecting a tax.

Lately some jurisdictions are running out of new, undeveloped land to lease and thus are losing the source of revenues they need to support local schools, infrastructure, and health services. China has never had a property tax, but a property tax system has been recommended as a solution to falling local revenue. Convincing the local officials to implement a property tax, however, has proven to be a political challenge for many reasons.

Land Lines: How does your research relate to the work of the Lincoln Institute?

Chip Case: I have studied land and property tax issues for a long time. I published my doctoral dissertation under the title Property Taxation: The Need for Reform. My early interest in the property tax led me to think about the housing market, its inefficiencies and failures. I have written about the efficiency of the property tax and about the distributional effects of land prices and increases.

A significant component of my research deals with measuring land value and assessing how land value affects the location of labor markets and the allocation of resources and public goods. When someone buys a house, that person is buying access to a package of rights that is tied to the piece of land under the house. The value of the package of rights is capitalized into the cost of the house and is taxed as a component of the property’s assessed value. The package of rights–what is included and how it varies by location–is a hot issue right now, in no small part because of the current state of the housing market and its resulting impact on the financial stability of the country’s economy.

Land Lines: Tell us more about your interest in the property tax.

Chip Case: I’m an unabashed fan of the property tax. It has the potential to operate as a clear, transparent means of raising revenue. The fair market value of property is not a bad index of the ability to pay. Compare this to the federal income tax, which has become so complex as to be a bizarre means of allocating the cost of government, with very little intuitive connection to taxpaying ability.

Taxes should be neutral, and ideally not affect economic behavior. When taxpayers change their actions to avoid tax, they are worse off and the government has lost revenue at the same time. The hidden costs of these changes include higher prices and lower wages. The land portion of the property tax is one of the few taxes that does not distort economic activity, and that’s an extremely valuable tool for public finance.

The property tax offers support for local jurisdictions, self-government, and direct democracy. Local governments have a hard time imposing independent sales or income taxes if people can find a lower rate in the next city or town. Real estate is immovable property, and that’s a good base for a local tax.

The property tax is always under attack because it is highly visible. Almost no one knows how much sales tax they pay in a year, and for many people income taxes are withheld from their wages. But writing a large check for the property tax focuses taxpayer attention. That means controversy, but it also means accountability, and it allows local voters to decide whether their taxes are in line with the public services they receive. That’s almost impossible to judge at the state or federal level.

The property tax can always be improved, and that’s part of the important mission of the Lincoln Institute. But it needs supporters who can point to its strengths, and I’m always happy to take on that role.

Land Lines: What is the subject of your current research?

Chip Case: I am working on a paper with Robert Shiller about the effect of people’s expectations on the housing market in 1988 and during the period from 2003 to 2012. Shiller and I collected questionnaires from people who had purchased or sold a house at some point during those calendar years. We used more than 5,000 questionnaires to create a dataset that allows us to better understand the nature of the recent housing bubble and to pinpoint the beginning of shifts in expectations. It gives us a way to quantify and analyze various expectations about the housing market and to determine how those expectations play a role in decision making.

We can see, for example, that in 2005 the goal of owning a house began to fade from the American dream. This type of shift is culturally and economically significant. When it occurs in conjunction with the inertia of people’s expectations, we begin to see volatility in the housing market. And if the swing is strong enough, we also see that volatility may affect the national economy.

Since the price of a house includes all rights and resources tied to that piece of land, expectations about the market and access to future rights and resources play a role in determining the market value of the house. The market value in turn affects the amount of tax levied on the property. The relationship between market expectations and the property tax is complex; the research that Shiller and I are doing will provide some insight.

Land Lines: What do you anticipate will happen in the U.S. housing market going forward?

Chip Case: I am cautiously optimistic about the future of the housing market. The numbers seem to indicate that the housing sector is stabilizing and showing signs of slow but positive growth. The housing sector composes only about 6 percent of the country’s GDP, but it has been enormously important in the past. Its recovery would certainly help the economy come back from the devastating effects of the recession.

David Vetter (Ph.D., University of California) has worked for more than four decades on urban finance and economics issues in Latin America. He taught and conducted urban research in Brazil for 17 years at the Brazilian Institute of Geography and Statistics (IBGE), the Graduate Engineering Program (COPPE), the Institute of Urban and Regional Planning and Studies (IPPUR), and the Fundação Getúlio Vargas. In 1990, he joined the World Bank, where he developed subnational investment and reform programs for Argentina, Brazil, Chile, and Ecuador. To push for greater private-sector participation in urban financing, he joined Dexia Credit Local in 1998 as vice president and established lending programs in Argentina, Brazil, and Mexico. Since returning to Brazil in 2004, he has worked as a consultant and researcher for various clients, including the Inter-American Development Bank and the Lincoln Institute of Land Policy, where he has been a visiting fellow since July 2014. He recently authored two articles for Land Lines: “Residential Wealth Distribution in Rio de Janeiro” (January 2014) and “Land-Based Financing for Brazil’s Municipalities” (October 2011).

Land Lines: How did you become involved with the Lincoln Institute?

David Vetter: For many years—whether I was doing research, consulting, or working at the World Bank or in the private sector—I quite often found solid information to help me from the Lincoln Institute. More recently, the Institute financed my research on residential wealth and municipal finance in Brazil.

Land Lines: What will you research as a visiting fellow and why?

David Vetter: I will focus on strategies for financing urban infrastructure in Brazil. Like other Latin American countries, Brazil continually needs to make substantial investments to keep pace with the rapidly growing number of new households and to reduce the number of them without access to urban infrastructure. From 2000 to 2010, the number of households grew by more than 12 million—an increase nearly 7 times the 1.8 million households in the Boston-Cambridge Metro Area in 2010. Given this demographic pressure, the absolute number of Brazilian households without access to urban infrastructure remained high in 2010, despite sizeable investments over the previous decade. And the deficits of some types of infrastructure actually increased. From 2000 to 2010, for instance, the number of Brazilian urban households without adequate sewage systems rose by nearly 2 million—more than the total number of housing units in Metropolitan Boston in 2010.

Brazil’s Ministry of Cities estimated that basic sanitation (potable water, waste water, solid waste, and drainage) would cost more than US$80 billion just for 2014 to 2018. Highways, street paving, public security, health, and education demand similarly high investments, and the amounts required often greatly exceed existing sources of financing.

Land Lines: How could value captured by these infrastructure investments help to finance them?

David Vetter: The benefits of infrastructure investments are capitalized into land and building prices. The Lincoln Institute’s 2013 forums on Notable Instruments for Urban Intervention showed that many governments in Latin America are effectively using a wide variety of tools to capture value created by their infrastructure investments, as detailed in Martim O. Smolka’s comprehensive review of the literature (2013): sale of development rights; betterment levies for street paving, drainage, and other improvements; and public-private partnerships (PPPs) involving value capture, as in the financial structure of Rio’s massive port renovation (Porto Maravilha). More efficient collection of the real estate property and transfer taxes help as well.

Value capture can generate positive feedback, creating a virtuous circle that generates additional resources for further investments. For example, the increases in value generated would increase the base for the property tax if real estate assessments were conducted in a timely manner, and the resulting revenue could be used to finance further investment.

Land Lines: To what extent could Brazilian municipalities increase the use of value capture?

David Vetter: According to economic theory, the value generated by infrastructure investments should roughly equal their cost. Because the supply of infrastructure would seem to be inelastic due to public finance constraints, the market value generated can actually exceed the cost of the investments.

For example, Brazilian municipalities invested more than US$82 billion in infrastructure and equipment from 2006 to 2010 (about US$16 billion per year). But in 2010 alone, state and national governments also invested more than US$50 billion. Capture of even a relatively small percentage of the value created could provide significant resources for investment. For example, the Rio de Janeiro Metropolitan Region is receiving massive infrastructure investments from national, state, and municipal governments, as well as from private sector partners, for various projects including the new Arco Metropolitano beltway and a new Metro line. Some are concessions or PPPs with significant financing at below-market interest rates from the public development banks (BNDES and CAIXA).

Land Lines: What role could value capture play in housing policy?

David Vetter: Infrastructure investment creates residential wealth, as its value is capitalized into housing value. Residential structures represent about one third of Brazil’s total net fixed capital in the national wealth accounts, as is typical for other countries around the world. Given this importance, we ask in our own work on the Rio de Janeiro Metropolitan Region: What generates residential wealth? How much residential wealth exists? Who holds it? We found that there are winners and losers. For example, the increase in value generated by infrastructure investment increases the residential wealth of homeowners, but it raises prices for renters in the benefitted area and housing cost for homebuyers wishing to locate there.

Land Lines: Would a housing policy focused on generating residential wealth and the equity of its distribution differ from most low-income housing programs?

David Vetter: It would be quite different. Most low-income housing programs keep unit costs down by building on low-cost land. Land price is low when it lacks access to employment and basic urban services, so affordable units often end up in these poorly serviced areas. A housing policy focused on residential wealth would emphasize access to employment and basic services, as they are among the key determinants of housing value.

Land Lines: But isn’t this utopian? How could value capture help to increase the residential wealth of lower-income families?

David Vetter: The challenge is certainly great. But value capture from higher-income families could allow cross subsidies to lower-income ones, especially renters who wish to locate in the areas benefiting from infrastructure investments.

Let me illustrate. The number of households in the Rio de Janeiro Metropolitan Region increased by more than 600,000 from 2000 to 2010 (that’s twice the number of households in Washington, DC, in 2010). As a result, the region’s urban infrastructure deficits remain high despite high investments. A recent impact study of metropolitan Rio de Janeiro’s new beltway (Pontual et al. 2011) explored the possibility of developing whole new socially integrated and fully serviced neighborhoods to hold the huge expected increase in the number of households along the beltway. This development could be financed in part by capturing value generated by the massive infrastructure investments planned and being implemented. Part of the value captured from higher-income families could be used to finance lower-income ones.

This impact study analyzed where such neighborhoods might best be located. Which value capture instruments might work best in this case? It is interesting that the private sector is already developing what they describe as “green neighborhoods” in the outlying regions of metropolitan Rio. Does it make sense to plan individual housing projects when such large increases in households are involved?

Land Lines: Would lower-income families be able to pay for infrastructure?

David Vetter: In Latin America, the eligibility criteria for value capture programs almost always include a test for capacity to pay. Of course, value capture should only be applied to families who can afford it.

Land Lines: How do you respond to the Brazilian professionals working on urban issues who argue that it is impossible to capture value for legal or cultural reasons?

David Vetter: Although Brazil’s constitution provides broad powers for value capture, only the largest municipalities, such as São Paulo and Rio de Janeiro, appear to be using them. Other sub-national and national governments are doing much less to capture the value of considerable public investments.

This failure is probably due in part to resistance by some who think that value capture is legally impossible. Yet while betterment levies meet with similar resistance, Silva and Pereira (2013) estimate that total revenue from them exceeded US$300 million among municipalities in the states of São Paulo, Paraná, and Santa Catarina from 2000 to 2010, even though relatively few municipalities employed them. This amount is not very significant for states of this size, but it does show that betterment levies are feasible.

One reason why betterment levies were successful in Paraná and Santa Catarina was that the World Bank and Inter-American Development Bank have required cost recovery in their municipal development projects since the 1980s. This success supports the idea that incentives of a national or state program can encourage use of value capture at the municipal level.

In addition, many cases of value capture seem to go unnoticed. In the City of Rio de Janeiro, for example, the sale of excess land from the existing subway system partly financed the expansion of a whole new line, and developers provide water and sewerage trunk lines as a condition for project approval in a higher-income neighborhood, Barra da Tijuca.

Land Lines: How might national or state government programs encourage greater use of value capture?

David Vetter: One way would be to provide access to financing as an incentive for the municipalities that use value capture. Ecuador’s development bank (Banco del Estado) uses such access to encourage municipalities to employ betterment levies. Access to financing could be used to provide access to a broader range of value capture instruments, such as the sale of development rights and impact fees, as well as betterment levies.

Land Lines: How can the Lincoln Institute encourage infrastructure financing through value capture?

David Vetter: Lincoln has done an excellent job of generating knowledge about value capture through its research, forums, training program, and publications. The Institute could scale up its excellent work on value capture in the region through more forums and publications, and by directly advising policy makers regarding program design and implementation.

Una versión más actualizada de este artículo está disponible como parte del capítulo 4 del libro Perspectivas urbanas: Temas críticos en políticas de suelo de América Latina.

Estudiosos y funcionarios públicos preocupados por la justicia social consideran que la redistribución de los valores de la tierra es un objetivo especialmente importante de política urbana en los países latinoamericanos, donde las enormes diferencias de acceso a los escasos servicios e infraestructura urbana llevan a una injusta distribución de los valores del suelo. Sin embargo, las políticas e instrumentos de captura de plusvalías, utilizados en principio para “redistribuir la valorización del suelo” o para “promover la redistribución de los incrementos en el valor de la tierra”, son rechazados por algunos sectores progresistas que argumentan que, en la práctica, dichos instrumentos no están realmente destinados para la redistribución.1 Este artículo explora un número de interrogantes que deben analizarse a fin de mejorar el entendimiento del concepto de captura de plusvalías y de su potencial para desempeñar un papel verdaderamente redistributivo en América Latina.

El principio distributivo y la meta redistributiva

El principio básico de la captura de plusvalías2 es devolver a la comunidad los incrementos de valor de la tierra que resultan de la acción comunitaria. La manera más común de definir tales incrementos es enfocándose en aquellos aumentos particulares resultantes de acciones públicas específicas y fechadas. Así, los correspondientes instrumentos de captura de plusvalías podrían ser definidos como herramientas para recuperar para la población el incremento en el valor de la tierra asociado con acciones públicas, aumento que de otra manera sería capturado por entidades privadas. El objetivo de esta política distributiva es restablecer un estado previo de distribución que, en esencia, se considera como propio o como dado.

Una interpretación alterna se basa en el principio establecido por Henry George, de que todo valor de la tierra, sin importar su origen, es producto del esfuerzo de la comunidad. Bajo este punto de vista, la idea de la captura de plusvalías puede adquirir una perspectiva verdaderamente redistributiva únicamente si se considera todo el valor de la tierra, y si se introduce la meta de alterar el estado presente de la distribución de dicho valor.

La redistribución de los valores de la tierra es apenas una de varias metas posibles de la política de suelo urbano. Otras son el aumento de los ingresos públicos para financiar servicios urbanos, la regulación y el manejo de los usos del suelo urbano, y el control de manifestaciones indeseables que resulten del funcionamiento de los mercados de suelo urbano. Es decir, la redistribución puede ser una guía para políticas distributivas más progresivas, pero no es necesariamente el principio básico de la captura de plusvalías.

De esta manera, podemos distinguir entre el principio distributivo de las políticas de captura de plusvalías -para restablecer un cierto grado de distribución- y una meta redistributiva de políticas de suelo urbano -para alterar un cierto estado de distribución. Esta distinción nos permite aclarar la confusión existente entre la distribución y la redistribución, cuando aplicadas a los valores del suelo y a la idea de la captura de plusvalías.

La práctica de la captura de plusvalías en América Latina

En un sentido genérico, la idea de la captura de plusvalías se aplica a cualquier imposición o herramienta de planificación que tenga como finalidad distribuir los aumentos del valor del suelo. Casi todos los países latinoamericanos han experimentado con el impuesto predial, y muchos emplean otras herramientas de planificación tales como la donación obligatoria de tierras para propósitos públicos en proyectos de parcelación o subdivisión de terrenos. Históricamente el desarrollo de la idea de la captura de plusvalías ha estado asociado con un instrumento específico conocido como Contribución de Valorización/Contribución de Mejoras. Este mecanismo especial de tasación o valorización, incorporado en la legislación de la mayoría de los países latinoamericanos, tiene el objetivo de capturar una porción de los beneficios especiales (valorización del suelo) que resulten de las inversiones públicas en infraestructura y servicios públicos, para financiar tales inversiones.

Incluso bajo esta estrecha definición, la aplicación de la captura de plusvalías ha estado plagada por limitaciones y polémicas. Tanto la influencia política de los propietarios como las deficiencias técnicas -y a menudo también legales- para poder hacer avalúos adecuados de los valores del suelo, han sido identificadas por estudiosos y funcionarios públicos como entorpecedoras de su aplicación en muchos países. Colombia es quizás el único país que se destaca por su tradición establecida de uso del instrumento, pero incluso allí su aplicación ha tropezado con serias limitaciones. Algunos observadores defienden el argumento de la incapacidad del instrumento para la redistribución, mientras que otros señalan que frecuentemente pierde su vínculo con el principio distributivo, convirtiéndose simplemente en una forma práctica de pagar a la comunidad para subsanar los costos de una acción pública que genera beneficios sólo para ciertos individuos.

Una mirada más cercana a la experiencia latinoamericana en la aplicación de instrumentos de captura de plusvalías lleva a una conclusión inquietante: en vez de desarrollarse a partir del principio ético de justicia, según el cual el incremento del valor del suelo resultante de acciones comunitarias debe retornar a la comunidad, pareciera que la idea de captura de plusvalías ha sido adoptada en América Latina como un mecanismo pragmático de recuperación de costos para resolver la escasez crónica de ingresos públicos y poder financiar proyectos de infraestructura urbana. A la larga, la meta principal de tales instrumentos ha sido aumentar las rentas públicas, sin importar si se basan o no en un principio distributivo.

Vinculación entre la captura de plusvalías y la redistribución

Incluso si el principio distributivo está asegurado, la meta de aumentar los ingresos públicos puede diferir de, o incluso contradecir, otras metas de la política de suelo urbano, incluyendo la importante meta redistributiva. Por ejemplo, cuando aumenta el valor del suelo de una región muy valorizada debido a una inversión pública en infraestructura urbana, y entonces el ingreso derivado de la captura de plusvalía se reinvierte en la misma región, el resultado no sólo no es redistributivo, sino que puede llegar a ser regresivo.

A fin de poder entender las contradicciones que surgen entre el uso tradicional de los instrumentos de captura de plusvalía para aumentar los ingresos fiscales, y la necesidad de incorporar las metas de redistribución en tales políticas, debemos contemplar el concepto de la captura de plusvalía con una visión mucho más amplia. Aun limitándonos a su usual definición centrada en incrementos específicos del valor del suelo, es preciso que al menos tres acciones o decisiones públicas no autónomas estén asociadas con el principio distributivo de captura de plusvalía:

1. una acción pública original (regulación, inversión, etc.) que genere incrementos en el valor del suelo;
2. una segunda acción para capturar (parcialmente) este valor; y
3. una tercera acción relacionada con el destino o uso de los recursos recolectados.

Si bien la segunda acción implica el uso de un instrumento general o específico de captura de plusvalía, la primera y la tercera, aunque están relacionadas a decisiones específicas, están inexorablemente ligadas a dos preguntas básicas referentes a las decisiones públicas como un todo: ¿Cómo se asignan obras públicas en el espacio? y ¿Cómo se distribuyen los ingresos fiscales generales?

Asignación de las obras públicas

Cuando el sistema tiene las metas concurrentes de aumentar los ingresos y fomentar la redistribución, la segunda no sigue necesariamente a la primera. De hecho, en Latinoamérica estas metas son frecuentemente contradictorias. Dadas las enormes diferencias en la distribución de la riqueza y la escasez de fondos para financiar las obras públicas, habitualmente es más fácil garantizar el aumento de los ingresos si los recursos para obras públicas se asignan (acción original) a regiones en donde se puedan recaudar más entradas absolutas. Incluso con el uso de un instrumento de captura de plusvalía, cuando la decisión subsiguiente (destino de los recursos) mantiene el mismo estado de distribución de la riqueza, la acción pública entera se vuelve más regresiva.

Por otra parte, el rechazo de los instrumentos de captura de plusvalía tampoco combate la asignación inadecuada de las obras públicas, y de hecho sólo contribuye a mantener el status quo. Por ejemplo, los trabajos de renovación de Copacabana en Rio de Janeiro, con plantación de árboles nuevos y modernización de aceras, fueron financiados por el presupuesto general y no por un dispositivo específico de captura de plusvalías. Sin embargo, muchas de las zonas pobres de la ciudad carecen de aceras y no tienen un solo árbol en sus calles. Esta ironía impone la necesidad de establecer una nueva estructura de análisis para las políticas de captura de plusvalía, de manera que pueda hacerse una asignación más equitativa de las obras públicas.

Distribución del ingreso general

América Latina presenta diferencias extremas relativas y absolutas en la provisión de infraestructura pública, por lo cual se exigen criterios de equidad para evaluar las políticas distributivas. Pero los criterios de equidad son subjetivos y existen diversos criterios sobre lo que es o no justo. En vista de las disparidades en riqueza y acceso a suelos urbanizados, es importante considerar no sólo las diferencias relativas sino también las diferencias absolutas entre los niveles más altos y los más bajos.

Para ilustrar este punto podemos aplicar el clásico argumento redistributivo a la distribución de valores del suelo en una sociedad que tiene 10 unidades de riqueza (es decir, valor del suelo) distribuidas entre dos grupos: el grupo más alto posee 8 unidades u 80 por ciento de la riqueza, mientras que el más bajo posee 2 unidades (véase la tabla 1). Este ejemplo puede representar las típicas diferencias entre las áreas urbanizadas ocupadas por unos pocos ricos y las cuantiosas áreas desprovistas de servicios ocupadas por los pobres en las ciudades latinoamericanas. Un aumento del 50 por ciento en esta riqueza (5 unidades en total), si se distribuye en la misma relación, no cambiaría las diferencias relativas, pero la diferencia absoluta entre los dos grupos aumentaría en un 50 por ciento, de 6 a 9 unidades.

TABLA 1: Políticas distributivas de captura de plusvalía Riqueza total Grupo inferior Grupo superior Diferencias relativas Diferencia absoluta

Original: 10 unidades 2 unidades 8 unidades 1:4 6 unidades

Aumentada: 15 unidades 3 unidades

(2+1) 12 unidades

(8+4) 1:4 9 unidades

Otra consideración importante es el nivel del grupo en la posición inferior. Los instrumentos de captura de plusvalía se justifican como herramientas distributivas para devolver a la comunidad los beneficios especiales resultantes de una acción pública que sólo algunos individuos reciben. Pero esta justificación, a su vez, plantea la necesidad de separar claramente los beneficios especiales de las necesidades básicas. Si consideramos el acceso a la infraestructura urbana como una necesidad básica, la sociedad debe decidir sobre el nivel mínimo de acceso para el grupo inferior. Es necesario dar prioridad a las acciones que conduzcan a esos niveles mínimos antes de que el grupo superior acumule otros beneficios. Si esta sociedad decide que el nivel mínimo de riqueza debería ser de 6 unidades para el grupo inferior, entonces el aumento de 5 unidades de valor del suelo sería distribuido de tal manera que disminuya tanto las diferencias relativas como las absolutas (véase la tabla 2).

TABLA 2: Vinculación de la captura de plusvalía y la redistribución

Riqueza total Grupo inferior Grupo superior Diferencias relativas Diferencia absoluta

Original: 10 unidades 2 unidades 8 unidades 1:4 6 unidades

Aumentada: 15 unidades 6 unidades

(2+4) 9 unidades

(8+1) 2:3 3 unidades

Captura de plusvalía y equidad socioespacial

Las decisiones sobre planificación urbana, tales como las normas y los reglamentos sobre el uso del suelo y los derechos de desarrollo, afectan también la distribución de los valores del suelo urbano y deben integrarse a las políticas de captura de plusvalía. En América Latina, donde las diferencias de acceso a la infraestructura pública y servicios urbanos están marcadas por una acentuada segregación social y exclusión, esta integración trae consigo una dimensión socioespacial que puede hacer frente a las disparidades entre los centros urbanizados adinerados (para unos pocos) y las periferias pobres carentes de servicios (para la mayoría). Por tanto, las políticas de redistribución del valor de la tierra adquieren un contexto político particular en el cual la generación de incrementos en el valor del suelo y el destino de los fondos correspondientes se asignan a diferentes áreas socioeconómicas de la ciudad.

Sin embargo, incluso cuando se incorpora esta dimensión socioespacial, la mayoría de los instrumentos redistributivos de captura de plusvalía reúnen condiciones necesarias, pero no suficientes, para una mejor distribución de los valores del suelo. Mientras que la redistribución desde áreas ricas a todas las áreas involucra alterar la distribución del presupuesto general para lograr su objetivo de equidad, la redistribución de todas las áreas hacia las áreas pobres implica alterar la asignación de obras públicas y/o de los derechos de desarrollo del suelo para llegar a una mejor distribución de los valores del suelo.

Debido a que estos enfoques implican mayores cambios institucionales, surge una tercera opción que busca estimular la generación de incrementos en el valor del suelo de los sectores adinerados a fin de generar ingresos que puedan redistribuirse a los sectores pobres. Estas “políticas de Robin Hood” (como algunos las llaman) están siendo contempladas para tratar las necesidades urgentes de zonas necesitadas, en combinación con oportunidades y demandas específicas de las zonas pudientes. Un ejemplo son las “Operaciones Interligadas” recientemente popularizadas en muchas grandes ciudades brasileñas, donde la negociación de excepciones legales para el desarrollo genera pagos que se destinan para la construcción de viviendas de interés social. Sin embargo, un análisis detenido de esta herramienta de transferencia muestra que la estimulación de los incrementos en el valor del suelo de los sectores ricos, en realidad termina aumentando la diferenciación intraurbana y por ende puede ahondar la brecha entre las áreas pobres y ricas.

Éste y otros efectos negativos imprevistos evidencian que el desarrollo de políticas e instrumentos de captura de plusvalía para los países latinoamericanos no puede ser considerado independientemente de una política urbana orientada a reducir las desigualdades socioespaciales. Para lograr esa reducción de la inequidad, es fundamental emprender acciones directas orientadas a alterar la presente distribución de los valores del suelo. Esto significa que, aunque no está necesariamente involucrada en la idea de la captura de plusvalía, la redistribución debe ser incorporada deliberadamente en el desarrollo de políticas distributivas de captura de plusvalías en América Latina.

Pautas para la implementación de políticas de captura de plusvalías

Esta discusión refuerza el argumento de que, en América Latina, las políticas de captura de plusvalía deben estar precedidas por cambios en el proceso de distribución de los valores del suelo en el más amplio sentido, especialmente cuando se busca la redistribución como una meta prioritaria de la política urbana. Esta perspectiva ayudaría a considerar de manera integrada, en cada decisión pública asociada a la distribución de valor del suelo, las varias otras formas mediante las cuales el sector público contribuye a esa distribución, incluyendo:

• El diseño y la recaudación de los impuestos sobre la tierra;
• La asignación de los ingresos públicos para las obras públicas;
• La aplicación (o no) de instrumentos específicos de captura de plusvalía;
• La repartición de los recursos recaudados; y
• La definición de los usos y los derechos de desarrollo del suelo.

El potencial y los límites de instrumentos específicos de captura de plusvalía están condicionados por dichas acciones y decisiones públicas de distribución. Cuando los instrumentos de captura de plusvalía específicos se utilizan sin tomar en cuenta estas consideraciones, se puede arruinar el proceso entero debido a que: 1) usualmente se descuida la recaudación de los impuestos tributarios; 2) se hacen asignaciones injustas de las inversiones públicas; 3) abundan los impedimentos políticos para el uso de los instrumentos de captura de plusvalía; 4) los ingresos no se distribuyen de una manera socialmente equitativa; 5) los derechos de desarrollo se incorporan en los derechos de propiedad, etc. En consecuencia, no se puede conseguir la redistribución y se compromete el principio distributivo.

El desafío latinoamericano, por lo tanto, consiste en analizar las precondiciones para el uso mejorado de la idea de la captura de plusvalía, en vez de simplemente concentrarse en vencer las dificultades operacionales para la aplicación de los instrumentos existentes, o de rechazar aquellos instrumentos en favor de nuevas herramientas usualmente sujetas a problemas similares. Para que se pueda hablar de una verdadera redistribución, estas decisiones distributivas deben considerar todos los componentes del valor del suelo, incluyendo los incrementos acumulados, potenciales y específicos, y no sólo los incrementos de valor en el sentido más estricto. Los esfuerzos que se hagan en esta área contribuirá a una perspectiva redistributiva de las políticas de captura de plusvalía.

¿Cuánta captura de plusvalía es “suficiente”? La respuesta a esa pregunta puede variar según el país, pero desde un punto de vista general, las políticas deberían basarse en las siguientes directrices básicas:

• El mejoramiento y fortalecimiento del impuesto predial, especialmente de su componente “suelo”, basado en el valor total de la tierra (en vez de basarse en incrementos específicos de dicho valor);
• La universalización de la provisión de infraestructura pública y servicios urbanos (es decir, necesidades básicas en contraposición a beneficios especiales); y
• Las respuestas socialmente responsables a la definición y la reglamentación de los derechos de propiedad y desarrollo del suelo.

Estas directrices tienen una sólida asociación a los incrementos en el valor de la tierra urbana en el sentido más amplio, y pueden utilizarse para reducir las diferencias socioespaciales absolutas y relativas. Si continuamos descuidando estas diferencias y seguimos confinando la captura de plusvalía a los incrementos específicos en el valor de la tierra, fracasarán los intentos de redistribución en los países latinoamericanos. Además, la aplicación de los instrumentos de captura de plusvalía continuará sirviendo como un mecanismo antisocial que sólo exacerba el abismo ya existente entre ricos y pobres.

Fernanda Furtado, fellow del Instituto Lincoln, recibió una beca del Instituto para finalizar su tesis doctoral “La recuperación de plusvalías urbanas en América Latina”, en la Facultad de Arquitectura y Urbanismo de la Universidad de São Paulo, Brasil.

Notas

1 Ver Donald Shoup, “Is under-investment in public infrastructure an anomaly?”, en: Gareth A. Jones y Peter Ward, editores, Methodology for Land and Housing Market Analysis. Cambridge, MA: Lincoln Institute of Land Policy (1994). El artículo de Shoup contiene un análisis del debate efectuado en el “Fitzwilliam Workshop on Land Values and Land Valorization in Developing Countries” realizado en la Universidad de Cambridge en 1991. Allí se debatió sobre si los instrumentos de captura de plusvalías están destinados a redistribuir la valorización del suelo, o si son un simple mecanismo para fortalecer las finanzas gubernamentales.

2 Un término más preciso sería recuperación de plusvalías, porque además de representar mejor las intervenciones públicas a fin de devolver a la comunidad la plusvalía del suelo capturada inmerecidamente por entidades privadas, el término se refiere a la redistribución como una manera específica de desarrollar tales políticas. Sin embargo, en este artículo se utiliza el término más genérico captura de plusvalías.

As we complete one academic year and plan for the next, I am impressed by the richness and multidimensional nature of the Lincoln Institute’s educational programs. We have developed a strong curriculum in two departments and in our Program on Latin America and the Caribbean. Most of our planning efforts for 2003-2004 are focused on consolidating and improving what we have established, but I thought it might be instructive to discuss some new initiatives that illustrate our forward thinking. The program is described fully in the Institute’s catalog, which will be available by late summer (see page 4).

There are a couple of new efforts in the Department of Planning and Development that I find especially exciting. The first involves documenting the relationship between land price changes and problems associated with providing affordable housing, and then using that research in a variety of educational programs to explore the effectiveness of policies to improve housing affordability. The second effort seeks to develop links among several one-day courses so they can be consolidated into longer, richer experiences for both faculty and participants.

We have offered a basic curriculum in the Department of Valuation and Taxation for several years, and we are continuing to enhance the program by developing additional second-level courses to supplement the introductory offerings. One such course will help participants develop the statistical and economic skills necessary for using mass appraisal techniques to measure land value, as part of our two-rate tax program.

The faculty, participants and Lincoln staff have been so enthusiastic about the week-long seminars offered at Lincoln House for our Latin American colleagues that for next year we are scheduling some refresher courses in Latin America for former participants, as well as some short introductory sessions for those who would like some orientation before attending the full-length courses in Cambridge.

Finally, everyone on our staff is trying to find ways to use the new technology to improve our effectiveness in getting information to those who need it. Over the past year our website has been redesigned and enhanced to provide easy access to information about courses, publications and other educational products, as well as online ordering options. In addition we now have more than 330 working papers and more than 350 Land Lines articles in English and Spanish that can be downloaded quickly from our website. Our Planning Fundamentals course for local planning and zoning board members is available on the web, and companion versions have been modified to fit the special circumstances of Vermont and Montana. We are also investigating other ways to use technology to help participants prepare for our face-to-face courses, to interact after attending courses, and to provide course materials for those who are unable to attend the course sessions.

I am proud of the many ways the Institute is providing assistance to practitioners, professionals and others involved in land and tax policy so they can do their jobs better. If you have ideas about other things we can and should be doing, please let us know.

At the end of 2009, the United States faced an economic disaster of major proportions, with trillions of dollars of asset value lost, more than 16 million people unemployed, and four consecutive quarters of rapidly falling GDP. These events were the direct and indirect result of extreme volatility in the value of residential property that had served as collateral for the nation’s huge stock of home mortgages.

Between 2000 and 2005, the value of residential land and buildings increased from about $14 trillion to $24 trillion. About half of this increase reflected new construction, and half was due to rising land values, primarily on the coasts (Case 2007). But in late 2006 prices began to decline, and by mid-2009 they had fallen roughly 30 percent.

Measuring House Price Appreciation and Depreciation

The S&P/Case-Shiller repeat sales home price indexes were developed 25 years ago to track changes in the market value of existing homes. Based on observed values of properties that changed hands more than once, the indexes were proposed as an alternative to the prevailing measure of home price appreciation or depreciation, which was the median price of homes sold in a city or region. A simple median price will move up or down over time with changes in the mix of properties that sell, as well as with changes in the price or value of houses. This can cause the median price to shift even if no appreciation or depreciation occurs, particularly when new, higher-valued properties are part of the sales base.

In the repeat sales methodology we collect all available data on home sales and then determine if the same house has been sold in the past 20 years or so. Each pair of sales provides information on appreciation or depreciation. We then eliminate sales where the property has been changed significantly, or the sale was not arm’s length, such as purchases by a financial institution or sales where the buyer and seller have the same name.

Finally, we reduce the weight assigned to paired sales that are far apart in time, in part because there is a greater chance that those properties have undergone physical changes. We also eliminate paired sales that are less than six months apart, because they may represent purely speculative activity. We publish only results that are supported by strong statistical tests of confidence.

Home Prices: 1990–2010

Between 1975 and 2006 no measure of home prices showed a national decline. The S&P/Case-Shiller and OFHEO (Office of Federal Housing Enterprise Oversight) national house price indexes both show a continuous rise, accelerating around the year 2000 and peaking between 2006 and 2007 (figures 1a and 1b). However, Case and Shiller (2003) found that in 43 states the ratio of house prices to income remained low and constant between 1985 and 2002, even as house prices rose, suggesting that it was changes in per capita income that explained the increase in home values.

Figure 2 shows the ratio of home price to per capita income for 17 of the more volatile metropolitan areas between the first quarters of 1987 and 2009. After 2000, this ratio began to increase in virtually all of these metropolitan areas, with steep acceleration after 2002. The data suggest four distinct submarkets. The first consists of Las Vegas, Miami, and Phoenix, with a virtually constant price/income ratio until 2000, followed by a rapid increase in 2003 and 2004.

The California submarket was even more explosive. San Diego doubled its ratio from below 8 to above 16, with San Francisco and Los Angeles close behind. New York and Boston, in the third group, experienced accelerating ratios, but they were not as dramatic as those in the first two subgroups. In the Midwestern cities of Chicago, Charlotte, Portland, and Minneapolis, the increases were much lower than those observed on the coasts.

Figure 3 shows the volatility of home prices in the same 17 metropolitan areas based on sales in the lower third tier of sales prices. The number of these sales tripled in Miami, Los Angeles, Washington, DC, San Diego, and Las Vegas. In September 2005, Boston saw a price drop that later spread to every metropolitan area in the country.

Table 1 shows the S&P/Case-Shiller Index through September 2009, when prices began to stabilize and then rise. The bottom two lines show composite indexes for two sub-samples of the 20 available metropolitan areas. Both have fallen nearly 30 percent since the summer of 2006.

How Did It Happen?

Needless to say, a credit expansion of this magnitude had a major impact on the housing market. As noted earlier, between 2000 and 2006 prices in the bottom tier of the market increased the most—by 241 percent in Miami, 249 percent in Los Angeles, and 200 percent in Washington, DC, Las Vegas, and San Diego. The S&P/Case-Shiller composite indexes more than doubled, and the national index increased by nearly 90 percent.

At the end of 2005 and into 2006, the housing market began to soften. Interest rates rose, and the 30-year mortgage interest rate was back to 6.6 percent by the last half of 2006. Gluts of speculative building slowed markets in Florida, Arizona, and Nevada. Homes in California and in the Northeast had become very expensive relative to incomes, and the manufacturing base of the Midwest fell into recession. As expectations turned gloomy in 2006, 16 of the 20 S&P/Case-Shiller metropolitan areas showed price declines, and by 2007 all were declining. This had never happened before.

Then inventories of houses for sale began to increase. In the past, when markets rose too quickly, prices were slow to change and adjustment was orderly. With house prices falling nationally, and with the bulk of the newly written mortgage debt carrying high loan-to-value ratios, mortgage default rates rose sharply.

Underwriting standards changed over this period as well. Statistical models of default and foreclosure seemed to “explain” defaults as a function of borrower and loan characteristics. These models were used by all market participants, sometimes even without their knowledge. The most widely known underwriting tools were Loan Prospector and Desktop Underwriter, developed by Fannie Mae and Freddie Mac respectively. Their low cost and ease of operation made them the industry standard. As these models spread throughout the market, mortgage lenders and insurers that did not accept their results garnered little new business. The rating agencies also fell victim to the same statistical methods, which suggested a very low likelihood of rapidly rising defaults.

The stated goal of the new model of underwriting was to transform a patchwork risk-allocation process into a more efficient and accurate pricing system. But this proved to be not only difficult, but ultimately impossible. Analysts seeking to predict the likelihood of default had little choice but to look to the past: at what rate did mortgages with the same characteristics fail in the past?

But past experience dealt with a 30-year period of rising prices in which the collateral was in most cases sufficient to cover claims. Thus, outside of a few regional downturns, no experience provided data that could accurately measure the impact of falling house prices on delinquency, default, and foreclosure.

The historic housing boom of 2000–2005, together with the change in underwriting standards and credit market operations, made the period of 2000–2008 one of the truly important economic episodes of the last century. Its legacy is a flood of bad mortgages with millions of homes headed for foreclosure.

The Government Has Played a Big Role

One additional factor clearly played a role in all of this: the federal government’s strong efforts to promote home ownership for rich and poor alike. In 1977 Congress passed the Community Reinvestment Act (CRA) and the Home Mortgage Disclosure Act (HMDA), designed to increase bank lending to low-income and minority households. Even today, banks have a CRA exam every year to determine whether they are meeting the credit needs of their entire CRA area, which in almost all cases includes low-income neighborhoods that in previous years might have been rejected (“redlined”) for loans or insurance.

These programs reflect a belief that the nation has an interest in promoting home ownership as the American Dream, which is thought by many to lead to meritorious behavior. A homeowner is considered likely to be a better citizen, and more involved in local affairs. Home ownership was also thought to be a way of building wealth for low-income households, part of the social safety net (Case and Marynchenko 2002).

Home ownership was encouraged in a variety of ways. The federal subsidy in the income tax treatment of home ownership (the mortgage interest deduction, the capital gains exclusion, the property tax deduction, and the nontaxation of imputed rent on owner-occupied housing) amounts to about $140 billion annually. The Government Sponsored Enterprises (GSEs) including Fannie Mae, Freddie Mac, the Government National Mortgage Association (Ginny Mae), and the Federal Housing Administration (FHA) were all set up to channel capital into home mortgages.

The national housing boom had its roots in unprecedented events that unfolded in U.S. financial markets beginning in 2000. The rapid decline of high tech industries, the stock market collapse in 2000 and 2001, the slow level of technology investment resulting from Y2K, and finally, of course, the events of 9/11 led to a relaxed monetary policy as the Federal Reserve continually reduced interest rates in an attempt to stimulate the economy and prevent recession. In January 2001 the Fed cut the federal funds rate (the interest rate banks charge one another for the use of federal funds) from 6.5 percent to 6 percent, and by the end of 2002 had reduced the rate 11 times, to 1.75 percent.

When the easing of credit began, the 30-year fixed rate for a conventional mortgage was 7.17 percent, down slightly from the 8.3 percent average rate over the first nine months of 2000. By the time the federal funds rate fell to 1.75 percent in the fourth quarter of 2002, the conventional fixed mortgage rate was 6.39 percent. The federal funds rate continued its downward trend until it hit 1 percent in July 2003 and remained there for over a year. By that time, the conventional 30-year fixed-rate mortgage carried an interest rate of 4.6 percent. This easing of credit was the result of a massive injection of liquidity. The dramatic drop in interest rates reduced returns on many investments, placing pressure on yields around the world.

The expansionary monetary policy pursued during this short period reduced the cost of buying a home by almost a third. If its purpose had been to stimulate the mortgage and housing markets, the policy certainly worked, as lower interest rates reduced mortgage costs. Housing production and sales of existing homes boomed. In October 2001 there were about 1.52 million housing starts annually. By the end of 2003 housing starts had increased by a third, to well over 2 million.

Existing home sales were 5.2 million annually at the beginning of 2001 and 6.5 million by the third quarter of 2003. By 2005 they reached 7 million and stayed at about 6 million until 2007. There is little doubt that the housing market kept the economy out of recession through the turbulent early years of the decade.

Figure 4 shows the explosion in home sales and mortgage volume at the end of 2002 and into 2003. Low interest rates stimulated demand for refinancing, and between the fourth quarters of 2002 and 2003, $5.5 trillion in mortgages were originated, and $3.7 trillion were paid off. Over five quarters, the total value of new mortgages was about the same as the entire stock of mortgage debt outstanding in 2001. Seventy-five percent of the new mortgages were written for refinancings rather than purchases of new homes.

By bundling large numbers of mortgages into securities, Wall Street could offer an investment vehicle that combined the implicit government guarantees of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) with a history of very low default rates. As a result, much of the liquidity that drove the economic expansion was channeled directly into mortgages.

In June 2003, mortgage rates began to rise, moving from 4.60 percent to 5.97 percent by August. The third quarter of 2003 saw the highest volume of refinancings, with originations of $942 billion. The refinancing boom ended with the rise in interest rates, dropping 56 percent in the fourth quarter.

During this expansion of credit, the mortgage industry became highly profitable, collecting fees of about 2.5 percent of the $4 trillion in total originations in 2003 alone—over $100 billion. Greenspan and Kennedy (2008) estimate that fees for refinancings and home equity loans in 2004 reached $200 billion. With default and foreclosure rates low and housing prices high, lenders competed vigorously for the business of homebuyers.

Mortgages for home purchases doubled from $239 billion in 2004 to $478 billion in 2005. Much of this business was directed at low-income neighborhoods and sub-prime borrowers. Between 2002 and 2006, the market originated $14.4 trillion in mortgages, retired $10.3 trillion in debt, and increased the stock of outstanding mortgage debt to $10.3 trillion from $6.2 trillion.

This not-so-subtle pressure from the Congress was clearly accepted by Fannie Mae and Freddie Mac as the price they needed to pay to maintain the implicit guarantee of their debt, which they enjoyed as a result of their government franchises. There can be no precise division of responsibility between the GSEs and the private sector in expanding the housing bubble.

Several factors played a role in the ultimate collapse: the competitive battle for market share waged by Wall Street investment banks, the private securities markets, and some highly leveraged specialty firms; the high credit ratings that were distributed by the rating agencies; and the fact that default and foreclosure rates remained low. In fact, it took a partnership between public legislation, governmental regulation, private market exuberance, and an extreme increase in liquidity to bring the markets down.

Where Do We Go From Here?

By late 2009, housing markets seemed to be approaching a bottom with prices stabilizing, but many forecasts anticipate declines extending well into 2010. If that were to happen, numerous mortgages written in 2008 and 2009 would not be fully secured and could turn unprofitable.

A prolonged period of falling prices would prevent a significant increase in housing construction. Despite record low interest rates, housing starts have been in uncharted territory for more than a year, having fallen below levels seen in prior downturns. The last four recessions began with large declines in housing starts. At the end of 2008, starts were down from a peak of 2.27 million in 2006 to around 500,000, where they stayed for more than a year, well below the typical bottom of one million starts per year. This represents a decline of approximately $600 billion in aggregate demand.

Two market-clearing processes are currently underway in the housing market, operating side by side, often neighborhood by neighborhood, within metropolitan areas. First, there is the traditional search for a new equilibrium. Inventories remain high as risk-averse sellers seek to avoid sharp price reductions. Sellers without access to liquid capital can actually be among the most reluctant to sell, because they cannot afford to incur high transactions costs. Homeowners do not like to sell at a loss, and may postpone sales in hope of a rising market. This type of market-clearing process is slow and usually results in a long and costly period of quantity adjustment with relatively little change in sale prices.

Second, banks, loan servicers, and other market participants are left holding properties because of defaults and foreclosures. These houses are typically sold at auction, often at very low prices. In every past regional decline these two processes worked together to clear the market. The final result will be the product of a battle between them.

At the end of 2009, homes were selling at a rate of about 6 million per year, 5.5 million existing and 500,000 new homes, including between 1 and 1.5 million sales at foreclosure auctions. The bad news is that new properties are entering the foreclosure process faster than older cases are being resolved, suggesting that the portion of all sales accomplished through the auction process is likely to grow.

But a number of facts suggest that the current bottom could hold and eventually turn upward. First, prices have fallen substantially. In Boston, they have been falling for some time, and in California they are down over 50 percent. Eventually, when prices get low enough, people will start buying again. Furthermore, interest rates are remaining at all-time low levels, with the conventional 30-year fixed-mortgage rate below 5 percent.

In short, all housing market indicators are improving. Pending home sales, existing home sales, new home sales, and housing starts were all up during 2009; and prices actually stopped falling. The OFHEO price index and the S&P/Case-Shiller indexes for 18 of the 20 cities analyzed were up for several months in a row. New home inventories fell to 251,000 (7.4 months of inventory) in September, after having fallen for 13 consecutive prior months.

California represents about 25 percent of all the land value in the United States, and events there have major implications for the rest of the country. The good news is that for the last three months, the indexes for San Francisco, San Diego, and Los Angeles have led the nation in price appreciation. The California Association of Realtors reports substantial increases in home sales volumes except in the Central Valley.

It is important to remember that it takes only a relatively small number of buyers to move the market. Our measures of home values are based on observed sales, but only 5 to 7 percent of the total housing stock changes hands annually. Even with an unemployment rate near 10 percent, homebuyers continue to be very optimistic, and now there may be enough of them to change the market’s direction.

But, we are by no means out of the woods. Unemployment remains very high and jobs are still being lost. In addition, the foreclosure pipeline is moving very slowly, and foreclosures are spreading from the sub-prime market to the presumably more secure A-, Alt A, and prime loans. If the jobs picture does not brighten, and the market does not speed up the process of resolving foreclosures, the housing market could face a long period of stagnation and even a return to falling prices.

References

Case, Karl E. 1986. The Market for Single-family Homes in Boston. New England Economic Review May/June: 38–48.

———. 2007. The Value of Land in the United States: 1975–2005. In Land Policies and Their Outcomes, ed. Gregory K. Ingram and Yu-Hung Hong, 127–147. Cambridge, MA: Lincoln Institute of Land Policy.

Case, Karl E., and Maryna Marynchenko. 2002. Home Appreciation in Low and Moderate Income Markets. in Low Income Homeownership: Examining the Unexamined Goal, ed. Nicolas Retsinas and Eric Belsky. Washington, DC: Brookings Institution Press.

Case, Karl E., and Robert J. Shiller. 1987. Prices of Single-family Homes since 1970. New England Economic Review September/October: 45–56.

———. 1989. The Efficiency of the Market for Single-family Homes. The American Economic Review 79(1): 125–137.

———.2003. Is There a Bubble in the Housing Market? Brookings Papers on Economic Activity. Washington, DC: Brookings Institution. September 5.

Greenspan, Alan, and James Kennedy. 2008. Sources and Uses of Equity Extracted from Homes. Federal Reserve Board, Finance and Economics Discussion Working Paper Series 2007-20, October. http://www.federalreserve.gov/PUBS/feds/2007/200720/200720pap.pdf

About the Author

Karl E. “Chip” Case is the Katharine Coman and A. Barton Hepburn Professor of Economics at Wellesley College in Massachusetts. With Robert J. Shiller he developed the S&P/Case-Shiller Home Price Indices. Case is a former member of the Lincoln Institute of Land Policy board of directors.

Gran parte del consumo de energía del país se produce en las ciudades. En los Estados Unidos, alrededor de tres cuartas parte de la energía consumida está relacionada con las áreas urbanas. De acuerdo con esto, las ciudades ofrecen oportunidades significativas para ahorrar energía aumentando su eficiencia, pero sigue habiendo obstáculos importantes: ¿Las fuerzas del mercado bastarán para producir ganancias de eficiencia cuando corresponda, o estas soluciones de mercado se verán impedidas por fallas del mercado, tales como información imperfecta, falta de financiamiento o riesgos incomprendidos? ¿Cuánto valora la gente el ahorro de energía, y cuán sensibles son a los cambios en los precios de la energía? El Instituto Lincoln organizó una conferencia sobre la eficiencia energética y las ciudades en octubre de 2012 para tratar estos y otros temas relacionados. A continuación esbozamos algunos de ellos.

Valoración de la eficiencia energética

Los consumidores deberían estar dispuestos a pagar más por espacios de vivienda que usan menos energía. La evidencia demuestra que los usuarios de espacios comerciales valoran la eficiencia energética y están dispuestos a pagar más por ella, y muchos estudios confirman que el espacio de oficinas y comercial con certificación LEED se vende o alquila a precios superiores en comparación con el espacio tradicional. La evidencia de esta preferencia es claramente menor en lo que se refiere a las residencias, en parte porque la mayoría de los compradores de viviendas no puede determinar fácilmente la eficiencia energética de una vivienda, sobre todo si es nueva y no hay registro sobre su consumo energético.

Algunos desarrollos residenciales se están clasificando ahora mediante procedimientos similares a la certificación LEED o la clasificación Energy Star, como la utilizada en los equipos electrodomésticos. En California, las viviendas que tienen la mayor clasificación de eficiencia energética se venden por un precio de aproximadamente un 9 por ciento mayor que las unidades con eficiencia energética promedio. Similares diferencias de precios para casas certificadas con el nivel de eficiencia máximo, usando un procedimiento de certificación europeo, se han observado en los Países Bajos. Algunas de estas diferencias de precios se justifican por el mayor nivel de confort brindado por estos edificios, además del ahorro de energía. También parece probable que el aumento de precios por eficiencia energética que se observan en California sea tres veces mayor que incremento gradual del costo del aumento de eficiencia en dichas viviendas.

Cómo determinar el costo

El costo de integrar eficiencia energética en los edificios nuevos es menor que el costo de mejorar la eficiencia en edificios existentes. Una casa construida después del año 2000 usa alrededor del 25 por ciento menos de energía por metro cuadrado que una casa construida en la década de 1960 o antes. El potencial técnico para mejorar la eficiencia energética en casas más viejas parece ser obvio, pero sus propietarios enfrentan dos desafíos: determinar qué mejoras tienen el mayor beneficio por dólar invertido y obtener un contratista y financiamiento para realizar el trabajo. Si bien hay muchas herramientas de diagnóstico disponibles para evaluar las viviendas existentes, su exactitud es muy variable y depende completamente de las características detalladas tanto de la vivienda y como del estilo de vida de la unidad familiar. La obtención de un contratista y de financiamiento puede suponer altos costos de transacción para los propietarios, en términos de esfuerzo, tiempo y dinero. Muchas compañías de servicios públicos ofrecen soporte técnico y financiero para la modernización de la eficiencia energética, pero el progreso ha sido lento.

Cómo cambiar el consumo de energía

Quizá sea más fácil cambiar los estilos de vida residenciales que modernizar los edificios viejos, y muchas compañías de servicios públicos están experimentando con métodos para modificar el comportamiento de la unidad familiar. El programa más común consiste en “animar” a las familias a desarrollar hábitos más eficientes proporcionándoles informes periódicos del consumo doméstico de energía que comparan su reciente uso de energía con el de sus vecinos. Los análisis demuestran que estos informes tienen no solo un impacto a corto plazo en el consumo de energía del hogar sino también un impacto acumulativo a más largo plazo que continúa después de interrumpidos los informes. Los ahorros de energía de estos programas son pequeños, y oscilan entre medio kilovatio-hora hasta un kilovatio-hora por día para un hogar medio, pero el bajo costo del programa lo hace tan rentable como muchas otras estrategias.

Reconocimiento a John Quigley

Esta conferencia fue organizada conjuntamente con John Quigley, profesor de Economía de la Universidad de California en Berkeley, quien falleció antes de que ésta se llevara a cabo. Además de sus artículos originales sobre la energía y las ciudades, algunos de sus antiguos alumnos, colegas y coautores presentaron otros artículos sobre economía urbana. Todos estos trabajos serán publicados en una próxima edición especial de Regional Science and Urban Economics, que reconocerá las contribuciones de John Quigley a lo largo de su larga y sobresaliente carrera.

El impuesto sobre la propiedad es el tributo más impopular de los Estados Unidos. Los estados han respondido a esta oposición pública promulgando una serie de políticas de alivio fiscal, especialmente para propietarios de vivienda (Cabral y Hoxby 2012). Entre los programas más comúnmente adoptados se encuentran las exenciones para la vivienda familiar (en inglés, homestead exemption) y los créditos al impuesto sobre la propiedad; todos los estados salvo tres cuentan por lo menos con uno de estos programas. Pero a pesar de su uso generalizado y su impacto potencialmente grande sobre la distribución de la carga del impuesto sobre la propiedad, hay muy pocos datos disponibles sobre los ahorros tributarios generados por las exenciones y los créditos del impuesto sobre la propiedad.

Dos nuevos recursos, disponibles en Características significativas del impuesto sobre la propiedad, subcentro de la página web del Instituto Lincoln, comienzan a satisfacer esta necesidad. Estas tablas proporcionan información para cada estado sobre el porcentaje de propietarios elegibles para estos programas y el nivel de ahorros tributarios que reciben, además de un análisis de cómo la elegibilidad y los beneficios varían en función de la distribución de ingresos (ver recuadro 1, pág. 32). Este artículo utiliza estos recursos para proporcionar el primer estudio nacional de exenciones y créditos del impuesto sobre la propiedad, con estimaciones de los ahorros tributarios obtenidos de estos programas. Con esta información, los dirigentes políticos cuentan con una herramienta fundamental para evaluar y mejorar la efectividad de sus programas de alivio del impuesto sobre la propiedad.

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Recuadro 1: Detalles por estado de exenciones y créditos del impuesto sobre la propiedad

El subcentro del sitio web del Instituto Lincoln Características significativas del impuesto sobre la propiedad proporciona tres recursos clave de información sobre las exenciones y créditos del impuesto sobre la propiedad en los 50 estados de los EE.UU. Se puede acceder a este subcentro en www.lincolninst.edu/subcenters/significant-features-property-tax.

Ahorros tributarios por exenciones y créditos de impuestos

Este archivo Excel en línea incluye estimaciones de ahorros tributarios por programas en cada estado (ver el ejemplo abreviado a continuación) más tablas resumen que facilitan la comparación entre estados. El archivo proporciona estimaciones sobre la cantidad de propietarios elegibles y la mediana del beneficio para cada programa, así como un análisis distributivo por quintil de ingresos. Esta es la primera vez que se dispone de datos detallados para la mayoría de estos programas.

Tabla resumen de exenciones y créditos

Este archivo Excel incluye un conjunto de tablas de 167 programas que muestra el valor de las exenciones expresadas en términos de valor de mercado, criterios relacionados con la edad, discapacidad, ingresos, condición de veterano de guerra, el tipo de impuestos afectado (es decir, impuestos escolares o de condado), si la pérdida de recaudación tributaria es absorbida por el gobierno estatal o los gobiernos locales, opciones locales, etc. La tabla resumen permite efectuar fácilmente un análisis cuantitativo de estos programas o comparar rápidamente un estado con otro. La información de estas tablas se usó para generar las estimaciones de ahorros tributarios.

Alivio del impuesto sobre la propiedad residencial

Esta sección del sitio web Características significativas incluye descripciones detalladas de las exenciones y créditos del impuesto sobre la propiedad que se usaron para crear la tabla resumen sobre exenciones y créditos. También describe otros tipos de alivio del impuesto sobre la propiedad, tales como programas de desgravación y de prórroga tributaria.

Notas: Los ahorros tributarios totales de la exención del impuesto sobre la propiedad por vivienda familiar para adultos mayores y discapacitados (US$392 millones) es menor que el total combinado de los programas para adultos mayores (US$378 millones) y discapacitados (US$22 millones), porque los propietarios que tienen más de 65 años y están discapacitados no pueden reclamar la exención dos veces. La tabla resumen en línea muestra que la exención para adultos mayores y discapacitados es de US$25.000 para propietarios que tienen más de 65 de años de edad o están discapacitados; los dos programas retroactivos son exenciones porcentuales del 2,5% y 10% para todas las residencias ocupadas por sus dueños. Fuente: Instituto Lincoln de Políticas de Suelo (2015).

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Cómo funcionan las exenciones y los créditos del impuesto sobre la propiedad

Los programas de alivio del impuesto sobre la propiedad adoptan diversas formas. Las exenciones por vivienda familiar reducen el valor de la propiedad sujeta al tributo, ya sea por un monto fijo en dólares o por un porcentaje del valor de la vivienda. Los créditos del impuesto sobre la propiedad, en contraste, reducen directamente de la factura de cobro un monto fijo o un cierto porcentaje.

Como se ilustra en la tabla 1, los programas diseñados para proporcionar beneficios idénticos a propietarios de viviendas de US$200.000 tienen un impacto muy distinto en los propietarios de viviendas de alto valor que en los de viviendas de bajo valor. Dada una tasa tributaria del 1%, una exención de importe fijo de US$20.000 reduce el impuesto sobre la propiedad para cada hogar en US$200 (US$20.000 x 1%). Este programa tiene un impacto progresivo en la distribución del impuesto sobre la propiedad porque las unidades familiares de menores ingresos tienden a tener viviendas de valor menor, y la exención representa un porcentaje mayor del valor de sus viviendas. En este caso, la exención de US$20.000 reduce el impuesto sobre la propiedad un 20% en una vivienda de US$100.000, 10% en una vivienda de US$200.000 y un 5% en una vivienda de US$400.000.

Una exención porcentual, por el contrario, proporciona la misma reducción porcentual en el impuesto para los tres propietarios del ejemplo: 10%. En dólares, sin embargo, las exenciones porcentuales favorecen a los propietarios de viviendas de mayor valor: una reducción generalizada del 10% reduce el impuesto sobre la propiedad en sólo US$100 para una vivienda de US$100.000, pero US$400 para una vivienda de US$400.000.

En el caso de créditos de importe fijo, los propietarios con viviendas de menor valor en general reciben los descuentos tributarios mayores en términos porcentuales. Por el contrario, el crédito tributario porcentual proporciona al propietario de una vivienda de US$400.000 el mayor descuento tributario al calcularse en dólares.

Una característica importante de las exenciones y los créditos porcentuales del impuesto sobre la propiedad es que la reducción en dólares (pero no la reducción porcentual) del impuesto aumenta con las tasas tributarias. Por ejemplo, si las viviendas de la tabla 1 fueran objeto de una tasa tributaria del 2%, el ahorro en dólares para sus propietarios sería el doble bajo la exención de US$20.000, la exención del 10% y el crédito del 10%. Si bien el ahorro en dólares de los créditos de importe fijo no varía con las tasas tributarias, el ahorro porcentual para los propietarios disminuye a medida que crecen las tasas tributarias.

Características esenciales de las exenciones y los créditos

El diseño de los programas de exención para viviendas familiares y créditos del impuesto sobre la propiedad varía significativamente en los 50 estados. La figura 1 hace un resumen de la cantidad y el porcentaje de programas estatales con las siguientes características claves.

Cálculo del beneficio

Quizás la característica más importante de los programas de alivio del impuesto sobre la propiedad es cómo se calculan los beneficios. En 2012, el 59% de los programas estatales proporcionaban exenciones de importe fijo, el 19% proporcionaban exenciones porcentuales, y el quinto restante usó créditos del impuesto sobre la propiedad u otras fórmulas más complicadas para determinar la cantidad de alivio tributario para cada propietario.

Si bien los programas funcionan de manera similar, sus efectos difieren considerablemente. Como se muestra en los ejemplos de la tabla 1, las exenciones y créditos de importe fijo hacen que la distribución del impuesto sobre la propiedad sea más progresiva, mientras que las exenciones y los créditos porcentuales no lo son. En consecuencia, para proporcionar un cierto nivel de alivio tributario para la mediana de propietarios, las exenciones porcentuales son más caras que otros programas porque se traducen en descuentos mayores en el impuesto sobre la propiedad para los propietarios de viviendas de mayor valor. En vez de cambiar la distribución del impuesto sobre la propiedad entre los propietarios, las exenciones porcentuales son principalmente una manera de desplazar la carga tributaria de los propietarios, como grupo, a las empresas, los inquilinos y propietarios de más de una vivienda.

Financiamiento estatal vs. local

El impacto final de las exenciones y los créditos del impuesto sobre la propiedad en las facturas de cobro depende de cómo se financian los programas. La figura 1 muestra que en 2012 sólo el 28% de estos programas recibía un reembolso íntegro por parte del estado para cubrir las pérdidas de ingresos locales, mientras que en el 57% de los casos los gobiernos locales tenían que absorber las pérdidas de ingresos. En el 15% de los programas, el gobierno estatal y los gobiernos locales compartieron las pérdidas de ingresos de alguna manera. (Los programas generalizados para todos los propietarios o todos los adultos mayores tienen una mayor probabilidad de recibir financiamiento estatal que los programas para grupos más pequeños, como los veteranos de guerra o los discapacitados. En 2012, el 43% de los programas de alivio tributario para todos los propietarios o adultos mayores fue financiado por el estado, el 48% fue financiado localmente y el resto dividió la pérdida de ingresos [Instituto Lincoln de Políticas de Suelo, 2014]).

El argumento principal a favor del financiamiento estatal de las exenciones y los créditos del impuesto sobre la propiedad es que pueden ayudar a mitigar las disparidades de riqueza inmobiliaria entre distintas localidades. Las comunidades más pobres y aquellas sin una base tributaria significativa tienen tasas normalmente más altas de impuesto sobre la propiedad, y estas comunidades reciben más fondos por propietario de los programas financiados por el estado. Sin esta ayuda, las comunidades con mayores tasas tributarias experimentarán una pérdida mayor de ingresos debido a los programas de alivio tributario, a menos que aumenten sus tasas tributarias aún más.

Adultos mayores vs. grupos de todas las edades

Ciertos estados proporcionan alivio del impuesto sobre la propiedad a los adultos mayores. En 2012, más de un tercio de los estados favorecieron de alguna manera a los adultos mayores: siete tenían programas estatales exclusivamente para este grupo, mientras que 11 cubrían también a propietarios más jóvenes, pero proporcionaba más beneficios a los propietarios adultos mayores. Otros estados o bien proporcionaron la misma cantidad de beneficios a propietarios de todas las edades (15 estados), o bien no tenían programas generalizados (18 estados).

Los argumentos más comunes para beneficiar a los propietarios mayores son que el impuesto sobre la propiedad consume un porcentaje más alto de sus ingresos y que los gobiernos locales gastan menos en los adultos mayores que en propietarios más jóvenes con hijos en edad escolar. Si bien es cierto que el impuesto sobre la propiedad representa un porcentaje más alto de los ingresos para los adultos mayores que para los propietarios que son trabajadores activos, los dos grupos dedican una proporción casi idéntica de sus ingresos a gastos totales de vivienda, porque es mucho menos probable que los adultos mayores estén pagando una hipoteca (Bowman et al. 2009, 11). Además, el impuesto sobre la propiedad es un pago por servicios públicos, no un arancel de uso (Kenyon 2007, 36). Los hogares compuestos por personas más jóvenes sin hijos en las escuelas públicas no se benefician del alivio del impuesto sobre la propiedad bajo estos programas. El tratamiento tributario preferencial de los adultos mayores puede reflejar simplemente que los hogares formados por personas mayores forman un grupo políticamente poderoso que tiende a votar masivamente.

Estimación de los beneficios de exenciones y créditos

Para estimar los ahorros tributarios de las exenciones de la vivienda familiar y créditos del impuesto sobre la propiedad, el primer paso fue crear la Tabla de resumen de exenciones y créditos en línea, que describe las características clave de cada programa (ver el recuadro 1 para una descripción). Estos datos se extraen casi por completo de la sección Programas de alivio del impuesto sobre la propiedad residencial de la base de datos Características significativas del impuesto sobre la propiedad del Instituto Lincoln.

El segundo paso fue combinar esta información con los datos a nivel familiar de la Encuesta de Comunidades Americanas (American Community Survey o ACS) de 2008–2012. Esta encuesta nacionalmente representativa tiene datos sobre más de 6,5 millones de hogares en los EE.UU., incluyendo las características de las familias que determinan su elegibilidad para el programa (edad, ingresos, discapacidad, condición de veteranía de guerra, etc.) y el nivel de beneficios recibidos (valores de las viviendas y montos del impuesto sobre la propiedad). Para una explicación completa de la metodología utilizada para estimar los ahorros tributarios de exenciones y créditos, ver Langley (2015).

Es importante hacer notar que las estimaciones registradas aquí son ahorros brutos en el impuesto sobre la propiedad. Los programas de alivio tributario frecuentemente resultan en un aumento de las tasas del impuesto sobre la propiedad, sobre todo en los programas financiados localmente, en los que las jurisdicciones aumentan las tasas tributarias para compensar la pérdida de la base tributable debida a las exenciones. Las estimaciones de ahorros netos en el impuesto sobre la propiedad serían menores en aquellas comunidades, debido a que las mayores tasas tributarias contrarrestarían parcialmente el alivio tributario directo debido a las exenciones y créditos.

La figura 2 (pág. 35) muestra que el alivio total del impuesto sobre la propiedad debido a las exenciones de vivienda familiar y créditos del impuesto sobre la propiedad varía mucho entre estados, pero en general es pequeño con relación a los ingresos totales por ese concepto. En 14 de los 45 estados que tienen estos programas, los ahorros totales son menos del 0,5% de la recaudación total del impuesto sobre la propiedad; en 27 estados, los ahorros son menos del 2,5%. Por otro lado, los ahorros tributarios en nueve estados son mayores o iguales al 10% de los ingresos totales del impuesto sobre la propiedad. El programa de Indiana es particularmente generoso, ya que ofrece a todos los propietarios una exención de US$45.000, y después una exención adicional del 35% para los primeros US$600.000 de valuación fiscal y una exención del 25% para las valuaciones que superan los US$600.000.

Ahorros tributarios por distintos tipos de programas

La mayoría de los estados tienen más de un programa de exención o crédito del impuesto sobre la propiedad, dirigidos a distintos grupos de contribuyentes: normalmente, a todos los propietarios, a los mayores, a los veteranos de guerra o a los discapacitados. La figura 3 (pág. 36) presenta estimaciones de la proporción de propietarios elegibles para estos programas, junto con el nivel de ahorros tributarios que reciben.

Propietarios

En 26 estados hay programas que cubren a la casi totalidad de los propietarios, pero en general están limitados a la primera vivienda ocupada por sus propietarios. En los programas para un estado típico, la mediana del valor que cada propietario recibe es un descuento del 12,5% en su impuesto sobre la propiedad. En el extremo superior, sin embargo, la mediana del descuento del impuesto sobre la propiedad fue de al menos un 25% en más de un cuarto de los estados que tenían estos programas.

Adultos mayores

18 estados cuentan con programas de alivio del impuesto sobre la propiedad para propietarios mayores (normalmente a partir de 65 años de edad). Estos programas son mucho más generosos que aquellos que cubren a todos los propietarios, con una mediana de reducción tributaria de casi el 30% en un estado típico. Más de la mitad de estos programas proporcionan una mediana de descuento de por lo menos el 25%, y sólo un sexto de ellos tienen una mediana de descuento de menos del 10%.

En la mediana de los estados, el 19,6% de los propietarios son elegibles para los programas, pero las tasas de elegibilidad varían mucho entre un estado y otro, dependiendo de si hay un límite de ingresos. En los siete estados que proporcionan alivio del impuesto sobre la propiedad a los adultos mayores sin tener en cuenta el nivel de ingresos, normalmente un 25–30% de los propietarios son elegibles. Pero en siete estados con programas sólo para propietarios de bajos ingresos (límites entre US$10.000 y US$30.000), sólo del 5 al 10% de los propietarios son elegibles. Los otros cuatro estados con programas de alivio del impuesto sobre la propiedad para adultos mayores no se pueden clasificar en ninguna de estas dos categorías, porque marcan un tope de ingresos, ponen límites estrictos de riqueza u otros criterios de elegibilidad.

Veteranos de guerra

Los programas estatales para veteranos de guerra están más extendidos que para cualquier otro grupo de propietarios, aun cuando la elegibilidad frecuentemente está limitada a los discapacitados. En efecto, sólo 10 estados proporcionan exenciones o créditos del impuesto sobre la propiedad para todos los veteranos, incluso a aquellos sin discapacidades. En la mediana de los estados para estos programas, el beneficiario típico recibe un descuento en el impuesto sobre la propiedad de sólo el 3,2%.

Hay 31 estados que proporcionan exenciones o créditos al impuesto sobre la propiedad a veteranos de guerra con discapacidades relacionadas con su servicio en las Fuerzas Armadas. Debido al requisito de discapacidad, la mayoría de los veteranos de guerra no son elegibles para estos programas. En efecto, sólo el 15% de los veteranos de guerra son elegibles en el estado típico. En general, sólo el 0,6% de los propietarios son elegibles para estos programas en la mediana de los estados.

Más aún, la mayoría de los 31 programas determinan la elegibilidad y los niveles de beneficio aplicando la graduación de discapacidad del Departamento de Asuntos de Veteranos. Sólo siete estados tienen programas para todos los veteranos parcialmente discapacitados, y aquellos con un grado de discapacidad menor normalmente reciben descuentos tributarios modestos. Por otro lado, 18 estados restringen la elegibilidad a veteranos de guerra que sufren discapacidad permanente y total. Estos programas benefician a una proporción muy pequeña de veteranos de guerra, pero en general les proporciona una exención completa del impuesto sobre la propiedad.

Discapacitados

23 estados tienen programas para los propietarios discapacitados, pero en realidad están dirigidos a dos grupos distintos: los propietarios discapacitados y los propietarios invidentes. En 2012, 12 estados tenían programas para propietarios discapacitados, siete estados tenían programas para los invidentes y cinco estados cubrían a ambos grupos. Los programas para discapacitados normalmente exigen que los beneficiarios tengan una discapacidad permanente y total, pero los criterios exactos varían. En la mediana de los estados, el 2,3% de los propietarios son elegibles para estos programas y reciben una mediana de descuento en el impuesto sobre la propiedad del 21%.

Conclusión

Las exenciones para vivienda familiar y los créditos del impuesto sobre la propiedad son una parte importante del sistema de impuestos sobre la propiedad. Estos programas se usan en casi todos los estados y pueden resultar en una distribución de impuestos sobre la propiedad mucho más progresiva. Por lo tanto, es fundamental que los dirigentes políticos dispongan de datos fidedignos sobre el alivio del impuesto sobre la propiedad que estos programas proporcionan realmente.

Por primera vez, nuevas investigaciones permiten disponer de esta información. Mediante el uso del subcentro web Características significativas del impuesto sobre la propiedad del Instituto Lincoln, los dirigentes políticos pueden comparar fácilmente las características clave de los programas de exención y crédito del impuesto sobre la propiedad en los distintos estados, y consultar las estimaciones de elegibilidad y ahorros tributarios. Estos datos permiten evaluar el impacto de las exenciones y créditos del impuesto sobre la propiedad en cada estado en particular, así como encontrar ideas para mejorar los programas.

Adam H. Langley es Analista de Investigación Senior del Instituto Lincoln de Políticas de Suelo. Un agradecimiento especial para Andrew Reschovsky, quien proporcionó exhaustivos comentarios sobre este artículo y otros documentos relacionados.

Referencias

Bowman, John H., Daphne A. Kenyon, Adam Langley, and Bethany P. Paquin. 2009. Property Tax Circuit Breakers: Fair and Cost-Effective Relief for Taxpayers. Cambridge, MA: Lincoln Institute of Land Policy.

Cabral, Marika, and Caroline Hoxby. 2012. “The Hated Property Tax: Salience, Tax Rates, and Tax Revolts.” Cambridge, MA: National Bureau of Economic Research. Working paper 18514. November.

Kenyon, Daphne A. 2007. The Property Tax-School Funding Dilemma. Cambridge, MA: Lincoln Institute of Land Policy.

Langley, Adam H. 2015. “Estimating Tax Savings from Homestead Exemptions and Property Tax Credits.” Working paper. Cambridge, MA: Lincoln Institute of Land Policy.

Lincoln Institute of Land Policy. 2014. Significant Features of the Property Tax. Residential Property Tax Relief Programs: Summary Table on Exemptions and Credits in 2012. www.lincolninst.edu/subcenters/significant-features-property-tax/Report_Residential_Property_Tax_Relief_Programs.aspx

Lincoln Institute of Land Policy. 2015. Significant Features of the Property Tax. Tax Savings from Property Tax Exemptions and Credits in 2012. www.lincolninst.edu/subcenters/significant-features-property-tax/Report_Residential_Property_Tax_Relief_Programs.aspx