Taxing land and buildings at different rates can discourage land speculation and encourage housing development.
Property taxes, which tend to increase along with home prices, are often painted as drivers of unaffordability. Following years of strong real estate market growth, a vocal anti–property tax movement has taken shape, and officials in states like Florida, Idaho, Illinois, and Kansas have made moves to curtail and even eliminate it completely for certain classes of taxpayers.
“Communities and governments across America are awakening to the realization that structures they’ve historically relied upon have not been serving them,” explains Jack Farrell, a research attorney with YIMBY Law. “In fact, many of these legal and societal structures are making affordability worse. That’s causing them to reexamine ideas they wouldn’t have touched previously, [including] basic principles of taxation.”
While the appeal of immediately lowering the carrying costs of people’s homes and businesses is obvious, throwing away the baby that is property taxation with the bathwater of unaffordability would be immensely unwise. The property taxes of today actually have a lot to recommend them—and with just a small change in how they are calculated, property taxes can go from a mostly do-no-harm measure to a powerful tool in the fight for affordable housing.
Critics of the anti–property tax movement are quick to point out the most obvious reason for continuing to tax property: the centrality of the resulting revenues in funding local public goods and services. “We all need more money to achieve the things that we want. For most local municipalities, the main tool to generate that funding is the property tax,” explains Daryl Fairweather, Redfin’s chief economist.
Fairweather is not wrong. Today, 70 percent of all local tax revenue in the U.S. is generated by property taxes. If Americans were to suddenly stop “pay[ing] rent to the government,” as Florida Gov. Ron DeSantis put it, the resulting shortfalls would be staggering. And, barring some as yet undiscovered fiscal stopgap, those shortfalls would likely be made up through increased reliance on other, less transparent, more distortionary, and regressive revenue sources like fines, fees, and sales and income taxes.
(Ed Note: Read the rest here, including a soundcloud of the article: https://shelterforce.org/2026/04/08/property-taxes-arent-the-cause-of-our-housing-crisis-theyre-a-solution-to-it/