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On October 19, 2004, the Federal Home Loan Bank of Boston (the
Bank) was a sponsor of the New England Smart Growth Leadership Forum
at the Lincoln Institute of Land Policy in Cambridge, Massachusetts.
The daylong event explored whether current property-tax structures
are contributing to sprawl in New England communities. Speakers
included Richard W. England, a professor of economics and natural
resources at the University of New Hampshire, who discussed the
use of fiscal policy to promote smart growth, and Barry Bluestone,
director of the Center for Urban and Regional Policy at Northeastern
University, who discussed Massachusetts' new Chapter 40R measure
to create overlay-zoning districts to promote smart-growth developments
on smaller lots.
David Parish, member services representative of the Bank, chaired
a roundtable discussion on smart-growth efforts in the six New England
states, and Carl Dierker, regional counsel of the Environmental
Protection Agency New England, led a discussion of New England's
experience with property-tax reform.
In his presentation, Mr. England suggested that tax policy has
been underutilized as a tool to mitigate sprawl in metropolitan
areas. Instead, many communities have focused on using local zoning
and design standards to manage land-use change. "For the most
part, fiscal approaches are secondary," he said.
Mr. England discussed a two-rate property-tax formula in which
land is taxed at a higher rate than buildings. This kind of tax
appears to have worked effectively in Pittsburgh, which experienced
a major increase in building permits despite a sharp decline in
the city's steel industry.
"Heavier taxation of land values in Pittsburgh permitted lighter
taxation of capital improvements," Mr. England said, adding
that heavier taxes on land provided an incentive to develop on urban
land rather than in nearby suburbs. He suggested there was a correlation
between this type of taxation and the revival
of declining urban areas.
Armando Carbonell, cochair of the department of planning at the
Lincoln Institute of Land Policy, suggested that the two-rate approach
provides an incentive to develop urban land and reduce sprawl. "I
see it more as an urban strategy," he said. "If you invest
in property, you're not hit with higher taxes."
Representatives from the six New England states provided forum
participants with an update on smart-growth efforts in each state.
"I see the glass as half-empty in Vermont," noted Mark
Sinclair, of the Conservation Law Foundation. "One person's
sprawl is another person's economic development."
The Bank has participated in the smart-growth forum since its inception.
"The Bank has been involved in all the important activities
around housing and land activities in the Commonwealth," noted
Mr. Bluestone. "I think having the Bank there really makes
a difference. We're getting a lot of support from the Bank."
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