Land Value Tax Endorsements

EarthSharing has compiled a comprehensive database of high-quality research into Land Value Taxation. Use this page as a resource for your own advocacy or to enhance your working knowledge of the fairest tax, and please reach out to us with any suggested additions to this page.


Prosper Australia Research Institute (2016)
THE FIRST INTERVAL: Evaluating ACT’s Land Value Tax Transition

Dr Cameron Murray

In 2012 the Australian Capital Territory (ACT) began a multi-decade task of major land tax reform to exchange taxes on transactions for taxes on the economic rents that accrue to landholders. The report evaluates the economic effects of these changes at the first interval, 2016, to tease out potential lessons from this policy experiment.

  • Increasing land tax rates appears to have deterred housing speculation
  • Future land tax obligations are already capitalised into lower land prices
  • Because of this, new home buyers save between $1000 and $2000 per year on mortgage costs
  • New housing construction has remained strong during the tax transition period
  • Residential rental growth is at historical lows, benefiting renting households
  • The distribution of land tax obligations between different types of land holders is the main political sensitivity
  • In sum, the clear aggregate economic efficiency gains from transitioning towards land value taxes are also associated with a substantial redistribution of wealth: away from the wealthiest and most politically-connected groups see a higher tax burden, towards average homebuyers and renters.
Australian Dept. of Infrastructure & Regional Development (2016)
USING VALUE CAPTURE TO HELP DELIVER MAJOR LAND TRANSPORT INFRASTRUCTURE

Australian Government discussion paper. Its purpose is to outline a range of value capture approaches, and seek feedback on how the Australian Government could use its various policy and funding levers to stimulate the use of value capture in the development and delivery of transport infrastructure. It sets out evidence of the relationship between transport infrastructure and the benefits that flow from it, before turning to a consideration of different mechanisms to implement value capture, including those used in other countries. It highlights the challenges and opportunities value capture presents and seeks feedback on some potential responses to those challenges.

The core idea of ‘value capture’ is that a new piece of infrastructure such as a freeway or railway line creates economic value – for example, the value of land located near a new station will typically increase – and tapping into part of this value increase offers a source of funds to contribute towards the cost of the project. [p. 4]

Understanding the theory and evidence of value creation presents an opportunity for governments to better leverage value increase as a means of funding the capital cost of infrastructure, while sharing the costs with those that benefit the most. Value capture is an approach to project development that requires integrated land use planning and a sharper focus on end benefits and public objectives leading to better infrastructure and services. It achieves this by aligning value creation to project funding in a way that means that those who benefit most contribute to the infrastructure cost. [p. 4]

OECD (2015)
REFORMING THE TAX ON IMMOVABLE PROPERTY: TAKING CARE OF THE UNLOVED

Hansjörg Blöchliger

“The tax on immovable property recently started to regain its former significance, but the tax yield still remains low, with slightly more than 1% of GDP and wide variation across countries. Against this background this paper surveys property tax policy in OECD countries and analyses the efficiency, distributional and stabilisation properties of property tax.

The efficiency effects of the property tax depend on whether the tax base includes land, investment, such as buildings, or both. A pure land tax is considered most efficient since it hardly affects households’ and firms’ behaviour. The tax on investment may reduce capital spending, especially of businesses. Still, the property tax affects growth less than other taxes. [p. 5]

Property taxes can underpin sustainable land use. A pure land tax can help contain urban sprawl and foster the conversion of developed land instead of greenfield development. The land-use effects of property taxes – which also tax investment – are more ambiguous. Specifically designed “green” property taxes (soil-sealing taxes, development charges, etc.) can further help internalise land-use externalities [p. 5]

National Tax Journal (2015)
THE ORIGINS OF INEQUALITY, AND POLICIES TO CONTAIN IT

Joseph E. Stiglitz

The paper critiques the notion that unfettered inequality is an inevitable consequence of contemporary capitalism, and provides an alternative, new framework for analyzing changes in income and wealth distribution. By thinking of these distributions as the result of changing centrifugal and centripetal economic and political forces, we can identify changes in our economic and social structure that may have played a central role in the creation of today’s high level of inequality, and we can analyze the potential impacts of alternative policies. Specifically, it is suggested that much of the increase in inequality is associated with the growth in rents — including land and exploitation rents (e.g., arising from monopoly power and political influence).

Much of the growth in inequality and the increase in the wealth-income ratio are related to an increase in rents and land values.In the middle of the last century, land was essentially dropped out of the models used by economists. After all, agriculture, the source of the major demand for land, had shrunk to a very small fraction of GDP. But as I noted earlier, housing services is an
important component of GDP, and land values, especially in our urban areas, are an important part of housing services. Indeed, with urbanization, one would expect an increase in land values. [p. 439]

But there is more going on: land is a store of value. The value of land today is largely dependent on its expected value tomorrow, ad infinitum. This means that land prices are largely untethered. Rising expectations can, at least for a while, be self-fulfilling. Land bubbles have marked capitalism from its early days, and we have been going through just the latest instance.23 But even when there is a “correction,” there is no assurance that the economy is not off on another bubble-path. [p. 439]

International Monetary Fund (2013)
Taxing Immovable Property: Revenue Potential and Implementation Challenges

John Norregaard

The tax on immovable property has been characterized as probably the most unpopular among tax instruments, in part because it is salient and hard to avoid. But economists continue to emphasize the virtues of the property tax owing to its relatively low efficieny costs, benign impact on growth, and high score on fairness. It is, therefore, generally considered to be underutilized in most countries. This paper takes stock of the arguments for using real property taxation, and presents an updated data-set for high-and middle income countries to illustrate its use. It also reflects the renewed and widespread interest in property tax reform globally, and discusses the many policy and administrative issues that must be carefully considered as prerequisites for successful property tax reform.

Land (or site) value systems tax the market value of land alone, and is used in a variety of countries (Australia, New Zealand, Denmark, Estonia, Jamaica, and Kenya). Apart from raising revenue, it could be argued that the land value tax provides the strongest incentive for the most efficient use of land, although the nominal tax rate must be higher to yield a given amount of revenue due to the smaller base. It has been held that this tax also implies lower administrative costs than a capital value tax. The system suffers from the same type of administrative shortcomings as the capital value tax, in addition to the complexities of assessing land only in highly urbanized areas. [p. 24]

Institute for Fiscal Studies (2013)
Tax by Design

James Mirrlees et al.

Tax by Design, the final report from the Mirrlees Review, presents a picture of coherent tax reform whose aim is to identify the characteristics of a good tax system for any open developed economy, to assess the extent to which the UK tax system conforms to these ideals, and to recommend how it might realistically be reformed in that direction. Drawing on the expert evidence in Dimensions of Tax Design (the first half of the Mirrlees Review), it provides an integrated view of tax reform.

The economic case for taxing land itself is very strong and there is a long history of arguments in favour of it. Taxing land ownership is equivalent to taxing an economic rent—to do so does not discourage any desirable activity. Land is not a produced input; its supply is fixed and cannot be affected by the introduction of a tax. With the same amount of land available, people would not be willing to pay any more for it than before, so (the present value of) a land value tax (LVT) would be reflected one-for-one in a lower price of land: the classic example of tax capitalization. Owners of land on the day such a tax is announced would suffer a windfall loss as the value of their asset was reduced. But this windfall loss is the only effect of the tax: the incentive to buy, develop, or use land would not change. Economic activity that was previously worthwhile remains worthwhile. Moreover, a tax on land value would also capture the benefits accruing to landowners from external developments rather than their own efforts. [371]

The economic case for a land value tax is simple, and almost undeniable. Why, then, do we not have one already? Why, indeed, is the possibility of such a tax barely part of the mainstream political debate, with proponents considered marginal and unconventional? One issue, no doubt, is the simple lack of political attractiveness. If a land tax is seen as a new and additional tax, then it is likely to be about as popular as any other new tax. So it should be seen as an alternative to other existing property taxes, not as a way to raise additional revenue. Moving from a property-based tax to a land-based tax would also create numerous gainers and losers. This is politically difficult. But then a major revaluation exercise just to bring current domestic property taxes up to date would also create winners and losers, which is perhaps why politicians have avoided doing it and why relative domestic property tax liabilities in England and Scotland bear increasingly little relation to relative property values. [373]

Land Values Research Group (2013)
Economic rent of land as a fraction of Australian GDP

Gavin R. Putland

An update of Terry Dwyer’s “The Taxable Capacity of Australian Land and Resources”. Excellent graphs showing the change in the land rent share of GDP in Australia through the decades, and the implications of ATCOR.

As Gaffney (2009) puts it, “All Taxes Come Out of Rents” (ATCOR), and “Excess Burdens Come Out of Rents” (EBCOR). Under the EBCOR heading we might include the suppression of public investment in infrastructure, due to the failure of the tax system to capture uplifts in land values. The benefit of infrastructure, net of user charges (fees, fares, tolls), is shown in prices of access to locations where that benefit is available — in other words, land values. If the responsible government, through the tax system, receives a certain fraction of every uplift in land value, infrastructure projects whose cost/benefit ratios are less than that fraction are profitable for the government and will therefore proceed. They are profitable because they expand the revenue base without any increase in tax rates.

But if the government fails to capture uplifts in land values, some infrastructure projects do not proceed, so that the associated uplifts in land values do not occur, while other projects proceed at the cost of unnecessarily high tax rates and ensuing deadweight costs. By itself, the ATCOR principle would imply that if existing taxes were abolished, the resulting increase in the economic rent of land would be just enough to replace the forgone revenue, in which case, if the forgone revenue were indeed replaced by a charge on land, the remainder of the economic rent of land (hence its capitalized price) would be as before.

Together, the ATCOR and EBCOR principles would imply that if existing taxes were abolished, the resulting increase in the economic rent of land would be more than enough to replace the forgone revenue, in which case, if the forgone revenue were indeed replaced by a charge on land, the remainder of the economic rent of land (hence its capitalized price) would be more than before.

Prosper Australia Research Institute (2013)
Total Resource Rents of Australia

Karl Fitzgerald

Study quantifying the total resource rents of Australia. The report finds hat the influence of monopoly is 10 times greater than mainstream economists acknowledge and that economic rents are a significant component of the Australian economy, comprising 23.6% of GDP.

Under a land tax system, the rural sector would enjoy a lower tax burden, encouraging decentralisation.

The Australian Housing and Urban Research Institute (AHURI) states: Economic theory predicts that a broad based land tax is shifted to landowners who receive lower after-tax rents that are in turn capitalised into lower land values. We find that the average plot with a land value of $335,000 (at 2006 prices) will decline by $24,000, or approximately 5 per cent. [p. 18]

As a revenue-raising mechanism, a resource rent system (of which land tax is the most prominent tool) does not distort market prices. The taxes charged cannot be passed on in prices. Rather, a resource rent harnesses what would have been easy profits – unearned income that had little to do with productive skill or entrepreneurial activity [p.18]

A well-designed land tax will deter the pursuit of capital gains over rental income, pushing the majority of the 90,730 vacant properties onto the market. Competition will see rents fall. Renters will look for cheaper accommodation. The added competition would demonstrate that the land tax cannot be passed on (when set at a rate of significance). Vacant land will be subdivided according to its highest and best use, further adding to supply side pressures. Any landlord who tries to pass on the land tax will see his tenant vacate the premises for cheaper options. [p.20]

Those who own the earth have a natural advantage over those running a business or earning a wage. A yearly land rent (or land tax) based on the locational value was the mechanism Classical economists hoped to rebalance the advantage land owners have over workers and employers. The current system of land tenure gives an owner permanent property rights for that location via a fee simple contract. It is a ‘one-off’ deal which locks out future generations from competing (who, by definition cannot attend the sale or auction). The philosophy behind land tax is the titleholder owns the house but leases the land in recognition that the earth is a gift to all. The methodology sees property owners maintain title over the land for as long as they are willing to pay the market-based land rent (a fee annual contract). Property valuers determine land valuations, just as they do for our municipal rates. This infers the sharing of land rent in place of most other taxes. [p.21]

Romney Institute, Brigham Young University (2012)
Land Value Capture in Policy and Practice

Lawrence C. Walters

The paper examines and evaluates efforts to implement land value capture and finds available tools wanting. It is then argued for an alternative approach using a restructured annual land tax.

Land value is socially created, and often with little effort on the part of the landowner. The whole basis for LVC is the argument that the community should be able to share in that socially created value. Thus, the argument for taxing improvements is that they create the majority of demand for public services. The tax rate should therefore reflect the cost of those services. The argument for taxing land is precisely so that the community can share in socially created land values. The tax rate on land should reflect the policy choice regarding the proportion of land value to be captured for public purposes. [p. 11-12]

In putting forward this new approach to land value capture, it is not expected that cities will recalculate the overall land tax rate every year, though such recalculation is possible if deemed
desirable. Rather, the expectation is that the overall rate will be based on policy choices about the base rate and the desired value capture rate, and a longer term average rate of increase in land prices. While land prices should be monitored every year, it is likely that the overall rate will be adjusted only every three to five years based on longer term market trends. [p. 15]

United Nations Human Settlements Programme (2011)
Innovative Land and Property Taxation

Remy Sietchiping (ed.)

In this publication we learn that land is at the core of the urban wealth creation. We learn that land and property taxation is an effective means for the positive transformation of a city in the quest to build wealth, create jobs and tackle development problems.

Land value taxation tends to ensure the use of valuable land. This is not hard to see in that it is a holding charge on land. One has to pay to keep vacant or neglected land idle. What
are called “land banks” become harder to maintain. This increased supply of land must in itself tend to make land cheaper. This easier access to land encourages useful economic
activity. In a context where government takes land values rather than individual profit-takers, land value taxation discourages those who simply buy property to capture its increasing
value. That in itself reduces the demand for land and is another reason why it reduces land price. In other words, land value taxation can act as a brake on increasing land prices. [p. 55]

As indicated above, land value taxation tends to put a brake on increasing land prices. What happens to land prices without that brake is illustrated during the period of 1990 and 2008. Recovery after 1990 brought a greater demand for land and enhanced benefits to land. In other words, land prices quite naturally increased as a measure of demand and these increasing benefits. However, availability of land did not expand. As it is often observed, unlike other things, the greater demand for land does not often increase its supply. This is because increasing
price tends to increase expectations about its price going even higher. This relative scarcity adds a general scarcity price to land. Then, the speculative phase tends to send prices still higher (Anderson, 2008). [p. 56]

It can be argued that the initiating cause of recessions is rapidly rising land prices that eventually produce some significant reduction in housing and other construction. In
response, land value taxation, by putting a brake on this rising price of land, can help to ward off recessions. [p. 58]

SERC, London School of Economics (2011)
If We Build, Will They Pay? Predicting Property Price Effects of Transport Innovations

Gabriel M. Ahlfeldt

“Development of a model to predict property price effects of transport network extensions. The model is calibrated to the Greater London Area and is used to predict
property price effects of the 1999 Jubilee Line and DLR extension. A considerable degree of heterogeneity is predicted both in terms of the magnitude as well as the spatial extent of price effects around new stations.”

Increasingly, compensations from property owners who receive an external benefit from publicly funded transport projects have been discussed as a potential source of revenue. Furthermore, increases in property values naturally induce property tax revenues. Thus there is a substantial public interest in property price effects of transport improvements, which could be considered in viability studies. [p.2]

Lincoln Institute of Land Policy (2010)
Assessing the Theory and Practice of Land Value Taxation

Richard F. Dye and Richard W. England

An examination of the experience of those who have implemented the land value tax in the United States and in more than 30 countries around the world.

The land value tax is a variant of the property tax that imposes a higher tax rate on land than on improvements, or taxes only the land value. Many other types of changes in property tax policy, such as assessment freezes or limitations, have undesirable side effects, including unequal treatment of similarly situated taxpayers and distortion of economic incentives. Land value taxation would enhance both the fairness and the efficiency of the property tax. Raising the tax rate on land has few undesirable effects, while lowering the rate on improvements has many benefits. Land is effectively in fixed supply, so an increase in the tax rate on land value will raise revenue without distorting the incentives for owners to invest in and make use of their land. By contrast, the part of the property tax that falls on structures or other improvements discourages investment. The burden of the tax on land falls entirely on landowners, who have no opportunity to shift the tax to others (such as renters). The land value tax is neutral with respect to the choice of when to develop a parcel and the density of its development, whereas the taxation of improvements is likely to increase lowdensity sprawl. [p. 2]

There is strong theoretical support for land value taxation, in particular for reducing the tax on real estate improvements, and realworld experience offers evidence that has been used to test the economic theory supporting the land value tax. A number of studies have attempted to draw statistical comparisons between jurisdictions with and without land value taxation, or before and after the adoption of a land tax, although the results are generally inconclusive. [p. 3]

Kingston University School of Planning & Surveying (2009)
Visualising Landvaluescape for Britain

Tony Vickers

PhD thesis. An investigation into the technical and policy issues relating to implementation of land value mapping for Britain. The research looked at the links between property tax adminstration and land value data usage in five other countries and contrasted their policy environment with that of Britain.

Location matters in the siting of almost any human activity. Competition for land sites arises when there are conflicting uses for them, or competing users for the same use and insufficient time slots to allow suitable sites to accommodate many or various occupants without conflict. This creates a potential market in land rights, which gives rise to the need for mediation and to the concept of ‘land value’. One of the earliest and most important functions of governments in all societies is to mediate between those claiming right of land use, leading to codes of land rights and eventually land and property laws and markets (Powelson, 1988). Because access to land and its natural abundance is essential for human survival, in every society before long “dominion over land was the basis for power over the lives of people” (Powelson, 1988:26) and out of such power arose many – if not all – forms of government, nationhood and statehood. [p. 8]

Motu Economic and Public Policy Research (2009)
Fiscal, Distributional and Efficiency Impacts of Land and Property Taxes

Andrew Coleman & Arthur Grimes

Exploring the evidence regarding the distributional impacts of land and property taxes including potential fiscal implications or about the taxes’ impacts on asset values and debt positions. The results provide a basis for considering alternative taxation options involving land or property taxes.

The proportionate drop in property price that results from a land tax will be relatively large for properties with relatively small value of improvements relative to land. In other words, land-extensive properties will fall in price by more than land-intensive properties. This result is consistent with the result cited in the previous section that, on balance, imposition of a land tax is likely to have a limiting effect on city sprawl. [p.12]

One reason for focusing on the potential addition of a land tax to the central government’s fiscal armoury is that such a tax has favourable efficiency properties relative to other taxation options. To a first order approximation, the economy’s supply of land is fixed and a tax therefore does not alter the aggregate allocation of this resource. Landowners must pay the tax wherever they are located and whatever the land is used for. By contrast, consumption and income taxes distort allocations by altering labour supply, investment and savings choices and even a poll tax can affect the allocation of resources via migration decisions. Unlike a land tax, a property tax distorts behaviour by changing the net return on improvements, so impacting on investment in structures and other improvements. A switch of some of the existing tax burden from distorting taxes to a land tax may be considered if improvements in allocative efficiency, and thence per capita incomes, are sought. [p.42-43]

Land Values Research Group (2007)
Unlocking the Riches of Oz

Bryan Kavanagh

A CASE STUDY OF THE SOCIAL AND ECONOMIC COSTS OF REAL ESTATE BUBBLES 1972 TO 2006. The report collates Australia’s real estate sales since 1972 to create ‘The Barometer of the Economy’. A delayed inverse relationship between property bubbles and the economy is demonstrated which indicates the extent of the deadweight costs of taxation.

Revenues sourced from other than the capture of annual land and natural resource values all offend against at least one of the four classical canons of taxation, namely, that revenues should (1) bear lightly upon production, (2) be cheap and easy to collect, (3) be certain, and not able to be passed on and, (4) bear equally, giving advantage to none (Progress and Poverty, chapter 33). Therefore, the almost complete lack of interest in establishing a community claim to the land values generated by public infrastructure and the existence of community as the primary source of public revenue is curious. It is perhaps best understood in terms of a media bias thought to favour its real estate advertisers, even though they too can be shown to benefit from land-based revenues. Amazingly, the forces of both left and right have fallen under the spell of this blinkered mind-set, and the idea of extending land value capture has rated little discussion. [p. 1]

Hence, as taxes in other areas of the economy act to increase prices, policymakers should consider greater land value capture as the most effective way to reduce land prices and improve ‘housing’ (read land) affordability, because there would remain less annual site value to be capitalised into land price. [p. 2]

Oxfordshire CC & Vale of White Horse DC (2006)
The Oxfordshire Land Value Tax Study

Tony Vickers et al.

Study into the practicalities of implementing Site Value Rating including valuation methodology, how practical LVT would be and how the resulting values would compare with the present system.

Dave Wetzel, chair of the Labour Land Campaign, argues (September 20 2004) that “a Land Value Tax on economic rent – the amount of money the land would generate if leased – is the only fair way to ensure that we all share nature’s bounty. All land would be valued and a tax rate applied (although parks freely open to all would pay no LVT), including empty urban sites on which landowners now pay no rates or taxes. Site values grow as the result of community activity – new roads, transport links, shops, offices, policing and other services. So why should the community not be repaid for the benefit it creates for the landowner? [p. 29]

“Why accept a one-off payment when LVT can provide annual revenues? Why lose out on increases in land values created by the activities of future generations? Development land, in any case, accounts for less than 5 per cent of all land. LVT has supporters across the political spectrum: socialists, liberals and conservatives. The Scottish Parliament is researching it; Liverpool City Council has asked to be a trial area for site value rating; Oxfordshire County Council is assessing land values in a trial area. It is an idea whose time has come. And the government should now assess the gains from applying LVT across the country. Then it should act on the results.” [p. 29]

“It is therefore not difficult to see why a means of taxing land is central to Green taxation policy. Without a fiscal instrument that values the use of land, and the minerals it yields, it is impossible to maximise the efficient use of resources and thus effectively manage the transition towards a more environmentally sustainable and equitable society.” [p. 30]

Lincoln Institute of Land Policy (2004)
Land value taxation in Britain : experience and opportunities

Owen Connellan

An examination of the practical operation of LVT in Britain, its moral background and ethical rationale. An historic account is provided as well as a view of future prospects.

The community can capture in land taxes some of the values it has created, including those resulting from streets, schools and other facilities. This, it is maintained, would be a more equitable way of financing local government. Another argument is that the revenue from a tax on land would permit reducing taxes on buildings, which tend to deter new construction. A third argument is that higher land taxes would make for a more efficient use of land. [p. 12]

George originally advocated replacing all existing taxes with a single tax upon land values. Supporters of George argued that since land is a fixed resource, the economic rent is a product of the growth of the economy and not of individual effort, and society would be justified in recovering it to support the costs of government. (They accepted Ricardo’s view that a tax on economic rent could not be shifted forward; as we have already noted, the main attraction of such a tax is that the whole of the tax would fall on the landowners.) George’s supporters also argued that a single tax on land would eliminate taxes on buildings, which would stimulate construction and economic growth, and that a single tax would be very simple to administer. [p. 17]

Australian Tax Forum (2003)
The Taxable Capacity of Australian Land and Resources

Terry Dwyer

Previous work on measuring Australia’s land wealth is reviewed and a time series of Australian land values constructed for most of the twentieth century. Estimates are made of Australian land income and compared to Australian tax revenues. It is demonstrated that Australia could finance tax cuts and international tax competition for labour and capital tax bases through higher fiscal contributions from land revenues.

At the same time, owner-occupied residential land is outside the scope of income tax (but not necessarily of rates or land taxes). Hence, the existing tax base is excluding part of land income while the tax revenue from it is being used in part to push up land values. Given the importance of residential land in overall land value statistics, such phenomena may explain why land income has risen so strongly in line with tax revenues. [p.38]

The logical implication is that Australia could choose to make a fundamental shift in tax policy. Australia could increase Federal reliance on land revenues46 and use the proceeds to make substantial cuts to marginal personal and company income tax rates. Australia could become a tax haven and out-compete Hong Kong and Singapore in attracting regional or international headquarters or investment. There is nothing inevitable about Australia being a generally “high tax” country which discourages investment nor is it inevitable that Australia becomes a branch office economy. Australia may have different forms of land resources to Saudi Arabia or Brunei but, like Hong Kong and Singapore, Australia’s land is worth a fortune as a tax base. Australia is as well positioned to finance large cuts in personal, corporate and consumption tax rates (or even abolition of one or more of these) through taxing land incomes. [p. 41]

Lincoln Institute of Land Policy (2001)
An Empirical Evaluation of Alternative Land Valuation Models

Robert Gloudemans et al.

A technical study to answer the question: “can vacant residential land be modeled with improved residences, avoiding the need to determine separate valuation models?”

The results of the research project are encouraging, indicating that vacant land can be effectively modeled with improved properties with very little, if any loss, in accuracy for the latter. A combined approach lends stability to vacant land values and provides much needed market benchmarks where vacant land sales are lacking. However, modelers must exercise care as service levels may not be the same and vacant and improved lots may be concentrated in different areas (even within the same neighborhood). Thus, while vacant and improved land can be modeled together, modelers should compute separate sales ratios by neighborhood for each and stand ready to make indicated refinements. [p. 6]

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