It is always a fraught exercise to try to anticipate the overall impact of an event before that event has even concluded, and so it is with COVID 19. However, this has not stopped plenty of people from trying. A growing chorus seems to be concluding that fear of future pandemics will encourage more people to abandon urban life and move to less dense suburbs. The apparent vulnerability of New York City, they argue, will be used (right or wrong, depending on the perspective of the pundit) to smother discussion of denser urban cores and may even put new impetus on the growth of suburban areas. This has, in turn, seemed to darken the chances of a Land Value Tax; after all, a tax that penalizes the use of land should lead to more capital occupying the same space – density.
These prognosticators have faced some pushback and may ultimately prove correct. However, if that is the case, such a move will have been wrong headed. The evidence we have so far is that the key factor in the spread of COVID 19 was crowding, not density. Unfortunately, the two are often used interchangeably in media headlines. Residential crowding, defined as people sharing limited residential spaces in close proximity, is more often a feature of insufficient density of local construction, and thus could be mitigated by an LVT. The same number of people living in a given space can be crowded or comfortable, depending on how well that acreage is used. Impediments to density push development to use acreage more poorly, and thus creates more residential crowding and more danger than necessary.
To avoid the unclearness and imagery attached to the word ‘density’, perhaps a different term is needed – ‘efficiency of land use’ doesn’t roll of the tongue, but it’s a more accurate descriptor. A city prepared for a dense population, with multi-story buildings and incentives to build new housing when needed, looks very different from an increased density in a city without the built environment ready to absorb it – where new arrivals crowd together in limited housing.
It is crowding, not simply density, that makes the biggest difference when addressing epidemic disease and public health. In New York City, it was the most crowded borough – the Bronx – that was hit the hardest by COVID 19, not Manhattan, which is nearly twice as dense. Overcrowding and insufficient housing provision has contributed to the terrible impact of the disease on the Navajo Nation in the U.S. Southwest; the particular severity of the disease in McKinley County, New Mexico, to use one example of a community struck nearly as hard as New York City, is almost undoubtedly linked the high levels of residential crowding there – nearly triple the U.S. average.
The impacts of residential crowding, go well beyond COVID 19. Other respiratory diseases are also spread more easily in crowded environments, and even cognitive childhood development suffers when children are raised in these circumstances. By contrast, healthy density – that is, density that nonetheless provides adequate living space for each individual – can allow for greater concentrations of education, health, and other services, while preserving relatively undisturbed landscapes outside of built up areas.
This distinction is particularly important for Georgists, because a Land Value Tax is likely to have opposite impacts on density and crowding. If landowners are taxed essentially by the square foot of land, the tax creates an incentive to invest in more capital. This would allow each square foot to be used more efficiently – with higher buildings, the minimization of surface parking and other low-value uses of space. There would be strong disincentives to holding onto undeveloped land and economic reasons to develop parking lots and lawns into usable living space. All else equal, a greater amount of usable floor space means at least the possibility of more rooms and less crowding – creating the opportunity for improved public health.
Like with so much of the economy, a major factor in making our communities less susceptible to epidemic disease lies in changing the use of resources. Housing requires the investment of three inputs – land, labor, and capital. To some extent they are interchangeable; investing more capital into a two story rather than a one-story building, for example, can create the same amount of housing on less land.
One problem is that initial decisions are made largely based on input costs at the time of construction. If land is cheap when a building is being constructed, its use is rarely optimized. Even if the population grows and land becomes more expensive over the course of a city’s development, these initial decisions are difficult to reverse. As land becomes less available – because it has been developed and because landowners use it to speculate – it becomes more difficult to achieve higher densities without crowding.
Moreover, as cities and counties make tax assessments, they frequently use ‘cost of construction’ as a stand in for the value of a given property. Since both building higher structures and building underground tend to cost more per square foot, these tax payments have the effect of decreasing the value of such buildings by raising their operating costs for owners. This means that the living space available per acre tends to be smaller than it would otherwise be, making crowding all but inevitable.
A land value tax in place of a traditional property tax can help correct this. Those purchasing new properties would have a strong incentive to purchase those properties that use less land, knowing that they won’t be taxed on more expensive buildings, but may find excess land uneconomical if land becomes scarce in the future. This preference on the part of property buyers should, in turn, drive developers to get more use out of each acre, even if land is currently cheap.
This increased efficiency of development can decrease residential crowding. Most people have a limited spatial area where they can live, based generally on their work as well as social support networks and other factors. This creates location-specific demand for housing. Whether that location experiences overcrowding as a result, is a function primarily of whether there is enough housing in that spatial area. In this way, a greater density of housing can actually alleviate residential crowding.
The reality is that cities and counties have little control over how many people want to live within their borders, and similarly cannot control their physical size past a certain point. Diminishing overall population density is not within their control, even if it was a good policy goal. Instead, policies with a tendency to maintain low density living, like height regulations, single family zoning, and taxes on buildings, instead diminish the density of building and thus the amount of livable area in a city. This has the opposite of the intended impact, leading to unnecessary crowding and the accompanying health effects. Cities should instead focus on policies that can improve the efficiency with which they use land, so that more people can be safely housed, and the desirability of the city does not become an overcrowding liability.