News Flash: High taxes on valuable land puts land back into use in Montreal
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Incentive Taxation

News Flash: High taxes on valuable land puts land back into use in Montreal

Montréal's tax on parking lots: cause-and-effect

Montréal: land of the lots no more?

One thing city governments ( and most people) can't stand but feel helpless to remedy is the ubiquitous and metastasizing presence of surface parking lots on the most valuable land in town: center city (or Centre Ville in this case).  

Almost the definition of parasitism, think of the parking lot business model as a twisted Seven Pillars of Wisdom. 

1. Buy an old business building downtown.  If occupied, let the leases lapse
2. Make a choice about the fate of the building (other taxes on structures, wages and business entail too much work to fix it up).
3.Knock down the building.
4. Pave it put up the plywood shack.
5. Suck off money from all the surrounding businesses, their employees, and their customers.
6. Repeat as needed throughout the city center to make tons of money with little investment.
7. Take advantage of all the taxpayer provided roads and infrastructure and pay not even a pretty penny for it.

We therefore tip our humble chapeau to the city of Montréal, which has doubled the tax rate on commercial parking lots.  UrbanTools would only wish that an additional tax would be imposed upon residential parking spaces as well.

Yet, we'll take the good news. Happily, land speculators figured out exactly what was going on immediately, and provided the requisite sob stories about passing the cost onto consumers, losing money, or cashing out now.  Lot owners being rational economics beings, we will bet that cashing out now will be the outcome.

One of the truisms of classical land economics is that a land tax cannot be passed on. Often, people don't believe that to be true. However,quoting from the Montréal Gazette article the operators of the lots see that economic theory meets their reality:

“It’s a major problem,” said David Cohen, who runs Modico Parking Inc., which operates outdoor lots in downtown Montreal. “You just can’t keep passing (the higher taxes) on.”

Couple this with a new effort to dramatically increase metered rates for public parking on the streets broached by Councillor Marvin Rotrand, Montréal stands a very good chance of becoming a city for buildings, people, commerce, and wealth creation.  

Councillor Rotrand: There is no free parking

Québec needs to become economically competitive, and these moves toward collecting publicly created land values can point the way not just for the cities, but the province. Allez!

5 Comments to News Flash: High taxes on valuable land puts land back into use in Montreal:

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