Pyradius Berning
Sep 7, 2018 · 1 min read

Mason Gaffney makes the point well:

“ Site value taxation is oriented towards encouraging and goading landowners to use land more economically. It implies the inclusion of a “succession premium” in the tax base. The succession premium has two elements: a current latent capacity to serve in a higher use than the present one; and an unripe capacity expected in the future. I will refer to the capacity-to-serve premium as the “ripe premium” and the succession premium as the “green premium” to underscore this distinction. The succession of land from a lower to a higher use could and should take place in an orderly, peaceful fashion, but it rarely does. Zones of transition (“ecotones”) become “combat zones”. Land value in these zones develops a green premium in anticipation of conversion. It is sometimes referred to as “speculative”. That is misleading, for “speculative” suggests that conversion to higher use is uncertain when, in fact, it may be more certain than a repeat of the present use. It is rather, simply, a green premium because the time is not yet ripe to change the use.”

http://www.masongaffney.org/publications/G44Philosophy_of_Public_Finance.CV.pdf