Land value tax, known as LVT, is a tax on the value of land. This is similar to property tax, but instead of taxing the property as a whole, only the land is taxed. This means a plot of land with nothing but grass and gravel would pay the same land value tax as a property with a 10 story retail/apartment complex.
My proposal to fund a high speed and connected bus network is to implement a ~1% land value tax on non-residential properties.
Why Land Value Tax?
Unlike property tax, property owners are not inflicted with higher taxes by building up or renovating a property. In fact, in some cases, property owners will be punished for *not* improving their property. As an area becomes more desirable and higher value, the land value tax will increase. This increase in land value tax will become a burden for owners of dilapidated properties, which will encouraged owners to either renovate or sell their property to someone willing to improve the property.
For property owners whose property is productive and earns income, this increase in land value tax will be minimal. With the tax going to fund public transit, these property owners will benefit from increased connections to their property.
Lets gives some examples to show how this would work
Here, we a parcel of undeveloped land in downtown Huntsville. Lets call it parcel A.
Parcel A, as far as I can tell, has never been developed. Being in downtown, and across from the new Constellation development, the land is valuable. Back in 2009, the land was appraised at $100,000. Today, in 2026, it is appraised at over $600,000. The entire time, it has been held by the same investment group. This investment group has gained $500,000 in wealth while keeping empty land unproductive and paying only $71,000 in property tax over 17 years.
Land is the most valuable resource in a city, especially highly desirable land. Keeping land unproductive is not only bad for the city, its also bad for all the people living nearby too. Land that could be used for more housing, grocery stores, or even a dog park is instead left empty so investors can gain wealth by doing nothing.
LVT helps address this. A simple 1% LVT will bring in an additional $6,016 from this parcel, increasing the total property tax from $6,978 to $12,994 per year. At nearly $13,000 per year, this heavily discourages land holding and encourages the development of the land or the selling of the land to someone willing to develop something productive.
Well, you may say, $13,000 sounds like a lot of money! Thats too much to impose on people!
But remember, these are highly desirable commercial properties. This proposed 1% LVT will not apply to residential properties.
To give further context at what property taxes look like on developed parcels in downtown, lets look at 2 parcels right next to each other, Parcel B and Parcel C.
Parcel B has a land value of $2,098,900 and a total appraised property value of $3,278,700. Because this is a simple small bank in the heart of downtown, this means 2/3rd of this property value is from the land itself. The land is worth twice as much as the building (and surface parking) on top. They pay an annual property tax of $38,032.92. A 1% LVT would bring in an additional $21,000. Thats a 50% increase in tax
Now lets compare this to Parcel C, which is a slightly smaller property, but hosts a large 10 floor office building and 6 floor parking deck. This parcel has a land value of $1,804,000, and a total property value of $22,686,600. They pay an annual property tax of $263,164. A 1% LVT would be $18,040. That would increase their annual taxes by a meager 7%.
These 3 examples showcase whats so special about LVT. In downtown, an undeveloped property would see its tax increase 100%, an under-developed property would see it’s tax increase 50%, and a fully developed property would see its tax increase by a mere 7%. Unlike property tax, which sees property owners paying 10 times more taxes when the property sees 10 times the development, land value tax remains the same and does not punish land owners from further developing land. Property with the least development and most amount of dilapidated structures will be affected the most, while properties that are highly developed will see relatively little percent increase.
LVT is a fantastic tool for ensuring land remains productive for the community to use and not left empty or under-developed just so an investment firm can get rich.
Why use LVT to fund Huntsville Transit
What makes land so valuable and what makes transit most effective are the same two things; high demand and density. Land that is the most valuable is also naturally the areas with the highest density. High density is what allows transit to excel at moving the most amount of people most efficiently.
What this means is, LVT and transit are symbiotic. Areas with the highest land values, which pay the most LVT, will also see the most significant improvements to the transit system. With funding from LVT, more people than ever before will be visiting these areas, such as downtown. People will be willing to spend more money at local businesses since they won’t have to spend money on parking or ride-hails. They will by more alcohol since they don’t have to drive home. People who can’t drive, or who avoid downtown due to struggles with traffic or parking, will be able to quickly get on and ride a bus stress-free. Office workers will see rapid bus transit as a huge perk and be more willing to work in these areas, as they’ll save money not needing a car for their daily commute. With more connections, faster speeds (less than a 12 minute wait for a bus), and greater accessibility, more people will choose businesses in these improved transit corridors. Businesses in these high value areas will see huge returns on their annual LVT payment.
LVT will increase taxes for most businesses by a marginal amount, but the improvements from increased retail sales and increased ease of recruiting office workers from the improvements to transit will be huge.
How you benefit from improved public transit
Whether you want to ride the bus or plan to never take transit in your life, you will benefit from an improved transit network.
On the Strong Towns Huntsville website, I recently wrote an article titled This is how you benefit from improved public transit in Huntsville. In this article, I explain that young teenagers, children, the elderly, and people with certain disabilities are all people unable to drive. With improved transit, they will no longer rely on other adults to drive them around. That means more free time for those adults and more independence for those unable to drive. Transit also allows you to get around the city when your car inevitable fails to start one day. Improved transit means you aren’t stranded when you have no functional car.
Revenue and expenses
Without being able to analyze and categorize every parcel in the city to exclude residential and city owned properties, a very rough estimate of expected revenue from LVT would be between $7 million and $15 million.
This will more than double or triple the budget for transit services in Huntsville, but only be a small increase in overall revenue, with Huntsville having a total revenue of $555 million.
According to a 2022 study commissioned by Huntsville, the initial cost of creating a Bus Rapid Transit (BRT) line along University/hwy 72 to downtown and the medical district would cost $55 to $65 million. At least 50% of that would expect to come from federal funding.
Annual operating costs were estimated to be between $2 to $3 million per year.
Bus tickets are currently $1, but with revenue from LVT, some or most routes could be free. Free transit greatly reduces the barrier to using transit and encourages more people to use it, reducing traffic. Chattanooga, TN is a city with a smaller population than Huntsville and offers free shuttles. LVT would more than enough pay for current transit plans and future expansion.
Who pays for LVT
LVT will be paid by owners of non-residential property who currently pay property tax. This means those who do not pay property tax (such as charities) and those who own residential land will not pay a LVT.
These exceptions mean homeowners will not see their taxes increase. It also means renters will not see their rent increase. By giving exceptions to residential property, this encourages land owners to build housing on their property. More supply to the housing market helps keep rent low. Huntsville has among the cheapest rent in the US for a city of our size and growth. By keeping housing supply high, we’re apply to continue the trend of affordable housing costs.
To be considered residential land, the land must be one of the following: zoned as residential, occupied at least 25% of the year, or under active construction as a residential property 25% of the year. Land not zoned as residential and that goes without any tenants or active construction for 1 year will have land value tax applied.
Improving Huntsville without raising debt or costing you more
A core component of my vision for the future of our city is ensuring the city grows in a sustainable way. This means continuing to improve the daily lives of those who live here while also lowering debt and not raising taxes on those most vulnerable.
Keeping a balance budget is extremely important for any large project. Debt is not bad, but its not a crutch the city should rely on and hope it can eventually be paid off. Infrastructure projects and transit are great for the city, but they should not be paid for by raising taxes on your groceries and home. We can have more, without taxing you more.
This can only happen if I’m elected as city council. Please consider donating or subscribing to the newsletter to get updates and learn more ways on how you can help the campaign.