In response to a suggestion about raising taxes on parking lots in the City of Hamilton, I wrote the following comment in Raise the Hammer.
Yes, taxes could change behaviour if people were acting in their best self-interest.
In my opinion, destroying more buildings and creating more parking lots makes everyone worse off –developers, business owners and the city.
Parking lots generate less tax revenue than keeping a building in place a filling it with a successful business. As we lose more buildings, we lose more opportunities to fill those buildings with small and independent businesses.
Without those businesses, the need to increase taxes discourages both existing and future economic activity.
With less tax revenue, the city’s ability to support existing services or to provide new services to attract people to the core further declines.
Without places to shop or activities to entertain, the people increasingly go elsewhere. This further strengthens a negative feedback cycle that will continue until we start looking like parts of Detroit.
Just ask yourself, how attractive does Gore Park look now compared last year?
So, who wins in such a situation? Does a developer really advance his financial interests by making properties vacated wastelands?
I really don’t see how you get from point “A” (empty lands) to point “B” (profitable development).