The following submission to the City of Monash was a tour de force in clear thinking, exposing the nonsense and skullduggery involved in Victoria’s final site value rating municipality switching to the inferior system of capital improved value rating: –
Don’t let land speculators do to Monash what they did to the rest of Victoria.
An open letter to the Monash City Council in defence of Site-Value Rating
by Gavin R. Putland * (Director, Land Values Research Group, Melbourne)
Contents
1. If it ain’t broke…
2. No penalty for building; no reward for wasting sites
3. The evidence is in
4. The people have spoken
5. Spurious arguments for CIV
6. Conclusion
Notes
Dear Councillors,
1. If it ain’t broke…
In Prosperity for the Next Generation (2001), the Monash City Council trumpeted the economic importance of Monash in the south-east region:
Monash has the largest number of both businesses and jobs among the 11 municipalities. It performs a key role in providing employment to people living in other parts of the region, particularly in the newly established and growing suburbs of the outer south-east…. It also is the least dependent local government area in the region on government transfer payments to residents, indicating on average a high degree of employment and wealth among its residents.
The “profile” which begins your Annual Report for 2006-7 further boasts:
Monash is an employment hub for residents in the municipality and Melbourne’s South-East Region with approximately 12,000 business establishments in the City providing around 90,000 jobs. This represents over 17% of the jobs in Melbourne’s South-East Region and about 6% of jobs in the entire metropolitan area. In fact, Monash’s share of jobs is the highest of the 11 municipalities in the South-East Region. The City also has a highly skilled and well-educated workforce with 20% of residents having a degree or higher education.
… City of Monash residents also enjoy a level of home ownership of 44%, which is considerably higher than the Melbourne Statistical Division at 33%.
Congratulations on that exemplary performance. How unfortunate that you intend to throw it all away by tampering with the rating system!
2. No penalty for building; no reward for wasting sites
Monash is the only remaining Victorian municipality in which Rates are levied on site value (SV) alone, so that ratepayers are not taxed on the value added to their properties by building, rebuilding, extending or renovating. Thus Monash is the only municipality in which ratepayers who add to the supply of housing, making it more affordable, are not penalized with higher Rates assessments, the only municipality in which ratepayers who allow their properties to deteriorate and become uninhabitable are not rewarded with lower Rates assessments, and the only municipality in which ratepayers pay in proportion to the full development potential of their properties as reflected in the site values, whether they use that potential or not, so that they might as well use it.
Indeed, Monash not only excludes values of buildings from the rating base, but also refrains from imposing any de facto building taxes in the guise of service rates or service charges on such things as water connection, sewer connection and garbage disposal, which are obviously correlated with the presence of buildings. Neither does Monash impose any Municipal Charge to dilute the influence of site values on Rates bills.
The resulting stimulus to construction helps to explain why such a high percentage of Monash residents can afford to own their homes. Obviously, all this construction directly creates employment and wealth. But the indirect stimulus is much greater, because there can be no job creation and no associated wealth creation unless:
the employer can pay the rent or mortgage on the business premises out of the proceeds of the business; and the workers can pay the rents or mortgages on housing within commuting distance of the premises, out of wages that the employer can pay out of the proceeds of the business.
In short, affordability of commercial and residential accommodation is necessary for job-creation and wealth-creation. Affordability requires an adequate supply, which in turn requires an adequate rate of construction, which in Monash is stimulated by site-value (SV) rating. Thus, your rating system is an essential ingredient of your economic success.
But please don’t confuse affordable accommodation with cheap-and-nasty accommodation. If you include building values in the rating base, you will: reward property owners who allow their buildings to deteriorate into eyesores, and reward commercial/industrial landlords who reduce the availability of employment, goods and services by reducing, or failing to expand, the supply of business accommodation.
These mechanisms would obviously tend to reduce property values in Monash. Your ratepayers would not thank you for that. At the same time, renters and first home buyers would not thank you for improved affordability, because the reduced property values would be caused by reduced amenity; they would not make it easier to afford accommodation of given amenity.
3. The evidence is in
The conclusion that site-value rating promotes construction and employment and enhances property values is supported not only by logic, but also by evidence. In 1995 the Site Rating Defence Group reported [1, p.16]:
According to Melbourne’s manufacturing and employment statistics for the 10 years between 1974 and 1984, as reported by the Australian Bureau of Statistics, the number of businesses in site rated councils increased by more than 10%, whilst in non-site-rated councils the number of businesses decreased by 20%.
So, if Monash abandons SV rating, it will drive away businesses and thereby become less of an “employment hub”. One advantage of this outcome would be to reduce the number of people in western suburbs who commute to jobs in the eastern suburbs, and hence to reduce the perceived need for certain controversial east-west transport links. Unfortunately, none of that “advantage” would accrue to Monash!
Melbourne is unique for having a large number of municipalities with different rating systems in a single metropolitan area. Hence it was in Melbourne that A.R. Hutchinson, founding director of the Land Values Research Group, pioneered the method of grouping the municipalities into zones according to distance from the CBD, and correlating economic activity with rating policy within each zone. He initially used six zones, of which zones 1 to 3 contained no SV jurisdictions, but zones 4 to 6 (the outer zones) contained a mixture of SV and non-SV. In the years 1928 1942, the number of dwellings constructed per available acre was 50% higher in the SV-rating areas than in other areas for zone 4, and more than twice as high for each of zones 5 and 6. Extrapolating these figures, Hutchinson concluded that if all municipalities in greater Melbourne had used SV rating, the additional construction would have eliminated Victoria’s housing shortage. His results were published in Melbourne in 1945, but also attracted attention in the USA [2].
In 1949 the Land Values Research Group surveyed per-acre increases in rate bases and yields for seven (then) outer suburban municipalities that used SV rating (site only) and ten that used Net Annual Value rating (site and buildings), over a 20-year period. The per-acre increase in aggregate Net Annual Value was 85 for the SV Councils, and 57 for the others [3]. In other words, the use of site-value rating was associated with greater gains in property values.
Dozens of later studies in Australia and elsewhere, including longitudinal studies on municipalities that changed their rating systems, confirm the correlation between site-value rating and building activity. The findings of some of them are summarized in references [1] and [4].
4. The people have spoken
Under the Local Government Act, Victorian Councils must levy rates on one of three bases: (i) capital-improved value (CIV), which is the total market value of the land plus buildings and other works; (ii) net annual value (NAV), which is the net annual rent of the property (defined by statute as at least 5% of the CIV for commercial property and exactly 5% for residential property); or (iii) site value (SV). Thus CIV and NAV include buildings in the rating base, while SV does not.
The City of Monash was created in December 1994 by merging the former City of Waverley with most of the former City of Oakleigh. Waverley had been on SV rating since 1956, when it switched from NAV to SV in a citizen-initiated plebiscite carried by 82% of the formal vote [1, pp. 34, 36]. Oakleigh had been on SV rating since 1921, when it switched from NAV to SV by Council resolution.
A plebiscite to reverse this decision could have been initiated by 10% of the voters, but was not. In 1945 and again in 1985, the Council attempted to adopt NAV by resolution, but had its decision reversed by a citizen-initiated plebiscite; the majorities for SV were 75% and 58%, respectively [1, pp. 33, 36].
These results were not isolated. In the years 1920 to 1986, there were 90 plebiscites in which the ratepayers of various Victorian municipalities had the opportunity to choose between two rating systems. Some municipalities had more than one plebiscite over that period, and many had none. But in 70 out of 90 plebiscites, the voters chose site value [1, pp. 33 36]. Nevertheless, in 1993 the Office of Local Government recommended that all newly amalgamated Councils adopt CIV. Under legislation subsequently passed by the Kennett government, Councils may apply an unlimited number of differential rates if, and only if, they assess property according to CIV [Local Government Act, ss. 161, 161A].
Thus, CIV became politically attractive because it afforded unlimited opportunities to buy the votes of particular interest groups by manipulating the Rates. Meanwhile the voter’s longstanding preference for SV was overcome by quietly abolishing the right to a plebiscite.
A similar usurpation occurred in New Zealand, except that site-value rating had an even stronger democratic mandate, which was violated with even less ceremony, and the offending central government was of the opposite political colour to that in Victoria [5]. Councillors may therefore rest assured that there is no political partisanship in this letter.
5. Spurious arguments for CIV
Searching the published Minutes of Monash City Council meetings, one soon discovers the long history of support for CIV rating among Monash Councillors. Apparently the only thing stopping the adoption of CIV is the perception that any change in the rating system would produce winners and losers, and that there would be a backlash from the losers. In this case the fear of change has been healthy, because the arguments offered in support of CIV range from the dubious to the ridiculous.
Let us begin with the Rating Strategy Review conducted by Macro Plan and debated at the Council Meeting of 27 April, 2004:
Spin: Under CIV rating, the “residential property sector” would pay less.
Fact: The catch is that the “residential property sector” includes not only homes but also vacant residential lots held by speculators, and land banks held by developers. In the absence of specific countermeasures (e.g. higher differential rates for vacant land), the speculators and land bankers would indeed pay less under CIV, because the inclusion of buildings in the rating base would increase the share of Rates paid by owners of usable buildings and reduce the share paid by owners of sites with no buildings or worthless buildings. In other words, ordinary homeowners, “Mum and Dad” property investors and owners of business premises would be taxed for the benefit of land-bankers and speculators.
Spin: CIV “is more easily understood, as it most closely resembles market value. Most people have an understanding of the market value of their properties but not the underlying land value. This gives the base greater integrity and transparency” [Rating Strategy Review].
Fact: While it is quite normal for political spin-doctors to assume that the voters are not very smart (as in the above claim designed to confuse “residential property” with homes), the suggestion that ratepayers cannot distinguish between the value of a house-land package and the value of the land alone is an insult to the intelligence of even the most ignorant ratepayer, and is all the more remarkable for being contained in a freely available document published on a Council website.
Insults aside, the CIV base has less “integrity and transparency” than SV, because:
similar-sized sites on the same street have similar values, whereas buildings on those sites can vary greatly in value; and the value of a site depends on obvious aspects related to its location, whereas the value of a building (and hence the CIV) depends on aspects that are not discernible from maps and not necessarily discernible from external views. Of course, the second point implies that the assessment of CIV is a greater invasion of privacy than the assessment of SV.
Myth: “It is more equitable to tax residents on the total value of their property rather than the notional value of their land alone” [Rating Strategy Review].
Fact: The value of the land alone is not merely “notional”, but is the reality behind the mantra “Location, location!” The locational value of (say) a house-land package is contained in the land value, not the building value, because the value of a building is capped by the depreciated replacement cost regardless of location, whereas land has a location, and hence a locational value, even if no building yet stands on it. Therefore Council services, insofar as they are location-specific, enhance land values in the serviced locations, not building values. It follows that rates levied on land values alone are better apportioned to the benefits of Council services, and hence more consistent with the “beneficiary pays” principle, than rates levied on the combined values of land and buildings. In that sense, SV rates are “more equitable”. If, on the contrary, equity is to be understood purely in terms of capacity to pay, then that capacity is better measured by the SV than by the CIVbecause:
(a) more valuable buildings tend to be newer, and newer buildings tend to be more heavily encumbered with mortgages that offset the owners’ capacity to pay;
(b) richer ratepayers tend to live in more expensive locations, and more expensive locations mean more expensive sites but not necessarily more expensive buildings;
(c) in consequence of (b), richer ratepayers tend to have higher ratios of land values to building values than poorer ratepayers [6], and hence to pay a greater share under SV than under CIV; and
(d) as already noted, the clear winners under CIV are land bankers and speculators, who by definition have assets to spare.
Moreover, as explained in section 2, site-value rating enhances housing affordability, which is an indispensable component of economic equity.
Spin: Under CIV, owners of flats and units “pay a more equitable share of the cost of delivering Council revenue” [Rating Strategy Review].
Fact: The mere permission to build a multi-unit complex on a site enhances the value of that site and is therefore captured by SV rating. That permission is contingent on the provision of sufficient infrastructure, the benefit of which is location-specific and therefore further enhances the rateable value under SV rating. Any attempt to achieve the same outcome by CIV rating would be not only superfluous, but counterproductive, because it would penalize the actual construction of multi-unit complexes and thereby restrict the supply of accommodation whereas under SV rating, those who have permission to build multi-unit complexes pay for the privilege whether they use it or not, and therefore have a healthy incentive to use it.
Spin: Under CIV, the “commercial and industrial sectors pay a greater share of total rates in line with the share these properties pay in other municipalities” [Rating Strategy Review].
Reality: Given that Monash has the healthiest economy of all municipalities in the region, why should “other” municipalities be regarded as normative?
Shouldn’t Monash, by reason of its superior outcomes, be the standard by which others are judged? In any case, rezoning land from residential to commercial/industrial increases the site value, and the consequent increase in the Rates bill is greater under SV rating than under CIV, which allows building values to dilute the rating base. The CIV option causes further damage by deterring the construction of commercial/industrial buildings, thus squeezing out businesses and destroying jobs.
At the Council Meeting of 27 February 2001, Cr Holdsworth rightly said that CIV would lead to business leaving Monash. But this effect is due, not to any increase in Rates bills payable by business (even if there would be such an increase), but rather to the inclusion of building values in the rating base. Insofar as Rates fall on site values, they do not deter the efficient use of business sites (whose values are not created by the affected ratepayers), but rather encourage efficient use (in order to generate income to cover the Rates).
But insofar as Rates fall on values of commercial and industrial buildings, they discourage the construction and maintenance of such buildings, causing a gradual deterioration in the quantity and quality of business accommodation (relative to SV). Therein lies the reason for the loss of business.
Half-truth: Under CIV, “Differential rates may be applied to different categories of property to achieve specific objectives” [Rating Strategy Review].
The other half: While CIV indeed allows more flexibility than SV in setting differential rates, this is not a property of CIV rating per se, but rather a peculiarity of Victoria’s Local Government Act (ss. 161, 161A). The legislators could have granted the same flexibility under all rating systems, but chose not to. Why? If the purpose of granting greater flexibility under CIV was to allow compensation for its shortcomings in other areas, shouldn’t one rather avoid the shortcomings by avoiding CIV?
Alternatively, if the purpose was to make CIV more politically attractive to Councils in spite of its economic shortcomings, what was the legislators’ ulterior motive? Could it be that the big land-banking developers, who are important donors to political parties at State level, also happen to pay lower Rates under CIV than under SV?
Moreover, as the Council itself noted in response to the Rating Strategy Review (27 April 2004), the opportunity for multiple differential rates under CIV further undermines the claim that CIV is more transparent.
Having disposed of the review by Macro Plan, let us now consider some statements by incumbent Monash Councillors.
Spin: “There is no reason at all why there must be such significant variances in individual rate assessments both up and down after biennial revaluation” [Cr Klisaris, quoted in the Monash Bulletin of 2 September 2008].
Fact: If your home site loses value, whether absolutely or by comparison with others in your municipality, the most you can get by way of compensation is a reduction in your Rates bill. That compensation is not adequate and cannot be adequate, because the fallen market value of the site already accounts for the effect of that value on the Rates bill. Similarly, if your home site gains in value, whether absolutely or by comparison with others in your municipality, the only thing that might offset your unearned gain is an increase in your Rates bill. Again the offset is only partial, because the risen market value of the site already reflects the offset. Rises and falls in Rates, far from being unfair, are the only compensation for the unfairness of falls and rises (respectively) in site values.
But if CIV rating is introduced, rises and falls in Rates will become unfair, because they will not only offset unearned falls and rises in site values, but also punish ratepayers for adding value to their buildings and reward ratepayers for neglecting or demolishing their buildings.
Chutzpah: “The current system produces financial distress amongst the losers…” [Cr Klisaris, continuing from above].
Reality: Presumably the “losers” are those whose Rates bills rise by more than the average. But that happens because their site values rise by more than the average; and, as explained above, the rise in the site value always outweighs the consequent rise in the Rates bill. People whose properties rise in value do not consider themselves losers when they borrow against their increased equity in order to pay for holidays and plasma TV sets. But as soon as they are asked to pay back a small fraction of their unearned gains through the rating system, those gains are suddenly and inexplicably deemed not to exist!
Faux pas: “Cr Lake emphasised that the revaluation, which was a legislative requirement, created a situation whereby many residents experienced significant increases in their rates. He noted that increases of this magnitude did not occur in other spheres, such as taxation, interest rates, etc.” [Minutes of 5 August 2008].
Reality: A 25-basis-point rise in the interest rate on a $300,000 mortgage amounts to $750/year. How often does a homeowner’s bill for Council Rates rise by that much? Moreover, interest rates can rise several times per year. Sometimes they rise by 50 basis points in one hit. In Monash, the entire rate on the site value is only 26.68 basis points; and in the case of a newly purchased home, the site is probably worth less than the mortgage. And what about rents?! At a rental yield of 5% per annum, Monash’s rate of 0.2668% of the site value represents less than 6% of the site rent. Hence, when site values increase, and especially when total site values increase by a greater percentage than total required revenue, ratepayers incur less than 6% of the corresponding increases in rental values at the next valuation whereas renters, by definition, are slugged 100% of the increase in the rental value when their leases are next renewed. In those circumstances, the fact that ratepayers are getting all the sympathy is an indictment of the political system, not of the rating system.
Error: “There is no other government charge or tax at any level of government in Australia which is prone to the same sort of wild changes that council rates in Victoria are subject to” [Cr Lake, quoted in the Monash Bulletin of 2 September 2008].
Fact: With only minor differences, all rating systems used in Victoria are also used in other States. Site-value rating, which Cr Lake apparently finds so objectionable, is mandated in Queensland and New South Wales. In Victoria and elsewhere, land taxes levied by State governments are subject to thresholds and (usually) progressive rates, and are not calculated backwards from total revenue requirements; consequently, State land taxes are subject to much wilder fluctuations than Council Rates.
Spin: “The [rating] system is crying out for reform to bring it into line with community expectations and to allow people the confidence to budget accordingly” [Cr Lake, quoted in the Monash Bulletin of 2 September 2008].
Reality: If property owners cannot budget for increases in Rates caused by revaluations, how are renters, who are almost always poorer than owners, supposed to budget for the much greater increases in rents that would occur if the supply of rental accommodation were choked off by the introduction CIV rating?
Error: The effects of Victoria’s system of rate revaluations are “totally unable to be managed or smoothed by councils” [Cr Lake, quoted in the Monash Bulletin of 2 September 2008].
Fact: Under Victoria’s Local Government Act [ss. 142, 170, 171, 171A], Councils have wide powers to defer or waive payments of Rates. These powers are available for site-value rating or any other system, and nothing prevents their use for the purposing of cushioning variations in Rates if such cushioning is thought desirable.
Red herring: Council can also give consideration to ratepayers who are under financial hardship and who make an application to defer the payment of their rates or charges under section 170(1) of the Local Government Act. This provision is only available when a ratepayer makes an application and is considered by Council to be experiencing significant financial hardship. [Attributed to Cr Lake in the Minutes of 26 August 2008.]
Reality: Here we go again: property owners experiencing “hardship” because their asset values have increased by more than the average! In any case, Cr Lake’s statement does not mention waivers, which do not seem to require individual applications [see s.171]. Furthermore, nothing prevents the Council from making a local law specifying a low threshold of “hardship” for the purpose of assessing applications for deferrals; for example, the local law could say that any increase in the Rates bill over and above a specified percentage shall be accepted as “hardship” for the purpose of deferrals.
Gaffe or misunderstanding? “The Mayor has written … suggesting that the State Government … consider a longer period between revaluations to stagger the effect of any increases or decreases” [Monash Bulletin, 2 September 2008].
Reality: It is to be hoped that the Mayor’s suggestion has been garbled in transmission. The truth, of course, is that a longer period between revaluations would result in bigger changes in assessed values, hence bigger changes in Rates bills, hence a bigger political headache at each revaluation!
Missing the point: Rates are a system of taxation and it is difficult to change a system. [Attributed to Cr Dimopoulos in the Minutes of 27 April 2004.]
The point: Because site-value rating reserves a fraction of the rental value of the site to the Council, and because that reservation of rent is reflected in sale prices, site-value rating is not strictly a tax but rather a recognition that part of the value of the site is not, and never was, privatized; in other words, under site-value rating, the Council is not an external taxer, but a passive minority shareholder who has not yet been bought out. In contrast, the rating of a newly constructed building under CIV or NAV rating does not reduce the cost of construction, but merely expropriates part of the result. Thus CIV or NAV rating really is a tax: an uncompensated public expropriation of a privately created value. If SV rating were suddenly replaced by CIV, thereby shifting some of the load from land to buildings, owners of buildings would see part of their value expropriated, while owners of vacant land would receive some of the public share of its value, without any obligation to compensate their fellow ratepayer who previously owned it. That is why it is difficult and should be difficult to change the “system”.
Spin: “That Council … directs the Mayor to write … to the Minister for Local Government and the Premier … expressing Council’s concern that the current legislative council rating framework is inflexible, arbitrary, archaic, unfair and unjust because of the significant increases and decreases from one year to the next resulting for many ratepayers following a revaluation” [Motion carried at the Council Meeting of 5 August 2008].
Reality: It has already been noted that under site-value rating, increases and decreases in Rates bills are not “unfair”, but are partial compensation for the real unfairness of decreases and increases in site values. It has also been noted that site-value rating complies with the two main principles of fairness in public finance, namely the “beneficiary pays” principle and the “capacity to pay” principle. The word “unjust” is redundant beside “unfair”. The word “inflexible” seems designed to elicit a reply pointing out that Councils are free to choose between three rating systems and that one of them, namely CIV, allows additional flexibility for setting differential rates. Why the adoption of CIV would be an unmitigated disaster has already been explained at length.
Now consider the other two emotive epithets in the above quote:
Arbitrary? Rates, at worst, are taxes on asset values. There is no prima facie reason why taxes on asset values should be considered any more arbitrary than those on income or consumption, let alone payrolls. But when the assets in question are sites, all resemblance of arbitrariness disappears, because the benefits of government services are location-specific and are therefore manifested in site values. As Adam Smith put it, “Nothing can be more reasonable than that a fund which owes its existence to the good government of the state should be taxed peculiarly, or should contribute something more than the greater part of other funds, towards the support of that government” [7].
In contrast, the introduction of CIV rating would depart from the “beneficiary pays” principle at the cost of penalizing productive activity; that really would be arbitrary. Furthermore, as explained above, Rates on site values alone are not strictly taxes.
Archaic? Rates as we know them, i.e. revenues collected by local authorities for local purposes, date from the 17th century [1, p.6]. By way of comparison, excise taxes have been with us at least since the 2nd century. Of course Rates as we know them are also charges on land, and as such are even older than excises. But the idea of apportioning the charge to the value of the land, as opposed to its actual produce or income, is modern. Originally the rule was:
“No income: no tax.” Hence Adam Smith, writing in defence of taxes on “ground-rents”, and having just explained why such a tax cannot be shifted onto tenants, abruptly and illogically wrote that “The ground-rents of uninhabited houses ought to pay no tax” [7] an exception which would allow the tax to be shifted onto tenants, because the tax would then be a cost of letting the land rather than merely owning it. CIV rating, which taxes the market price of property rather than the income derived therefrom, was invented to stop landowners from avoiding tax by withholding land from use.
The redefinition of NAV in terms of the CIV, rather than the actual income from the property, achieved the same purpose. But even CIV rating raises the rents of buildings because it discourages construction. The solution, as was realized in the late 19th century, is to rate only the site value. The invention of service rates was a retrograde step, because service rates can act as de facto taxes on buildings or the letting of buildings. Note the implication that Monash has the most modern rating system in Victoria!
Claim: The move to CIV would provide an average reduction of 15% in Rates to households across the municipality. [Attributed to Cr Klisaris in the Minutes of 27 February 2001.]
Fact: Under CIV, and only under CIV, the Local Government Act allows households (or indeed any other interest group) to be charged a different rate from other categories of ratepayers. But there is nothing in the Act to say that the rate (% per annum) applicable to “households” would be lower than others; the only constraint is that the highest differential rate shall be at most four times the lowest [s.161, par.(5)]. Assuming, however, that there would be a single CIV rate for all ratepayers, and assuming that there would be no Municipal Charge or service rates or service charges to complicate the picture, there is a simple method by which any ratepayer can determine whether he/she would have paid higher or lower Rates under CIV. According to the 2008 Municipal Valuation, the rateable land in Monash had a total SV of $25,175,706,500 and a total CIV of $39,715,460,000. The budget of 2008-9 imposed an annual rate of 0.2668% on the SV. To raise the same total revenue from the CIV would have taken an annual rate of 0.1691%. So, get out your most recent Rates bill and valuation, multiply the stated CIV by 0.001691, and that’s what the annual bill would have been under CIV rating. How’s it compare??
Claim: There is support in the community for a change to Capital Improved Value. [Attributed to Cr Manzie in the Minutes of 5 June 2007.]
The acid test: First send mail to every ratepayer, explaining how to calculate what his/her most recent Rates bill would have been under CIV. Then see how much “support” there is!
6. Conclusion
Monash is the last bastion of sanity in municipal rating in Victoria. the last remaining municipality that does not penalize property owners for supplying accommodation or otherwise improving their properties for the benefit of the City, the last remaining municipality whose rating system does not give favoured treatment to mere hoarders of land. If Monash changes from site value to CIV, its status as the employment hub of the south-east will be lost, the growth in its residents’ property values will be slowed, and the conquest of Victoria by land-bankers and land-speculators will be complete.
Notes
[1] P. Anderson, Victoria’s Municipal Rating System (Melbourne: Australian Institute of Urban Studies [Victoria Division], 1996).
[2] Harry Gunnison Brown, “The Challenge of Australian Tax Policy”, American Journal of Economics and Sociology, vol.8, no.4, pp. 377 400 (July 1949), Part I, reprinted in Selected Articles by Harry Gunnison Brown (New York: Robert Schalkenbach Foundation, 1980), pp. 158 163.
[3] “Rising Municipal Costs: A Comparison of Relative Abilities of Alternative Rating Systems to Provide Increased Rate Yield” (Melbourne: Land Values Research Group, 2008), cited by Anderson [1, p.12].
[4] G.R. Putland, “Why Site-Value rating is better, and how to implement it with no losers” (Melbourne: Land Values Research Group, 2008).
[5] G.R. Putland, Submission to the Royal Commission on Auckland Governance (Prosper Australia, 2008).
[6] See e.g. M. Gaffney, “A Cannan Hits the Mark”, American Journal of Economics and Sociology, vol.63, no.2, pp. 273 290 (April 2004), reprinted as ch.21 of Robert V. Andelson (ed.), Critics of Henry George, 2nd Ed. (Blackwell Publishing, 2003), vol.2.
[7] The Wealth of Nations, bk.5, ch.II, pt.2, art.I.
Yours faithfully,
Gavin R. Putland.
* The author is not a lawyer and this letter is not legal advice