Tax Shift Accelerated Allentown’s Growth

The contiguous cities of Allentown and Bethlehem in eastern Pennsylvania are very comparable as to size and economy. In 1997, Allentown started taxing buildings less than land; Bethlehem did not.

Allentown’s new private construction & renovation thereupon grew by 32% in dollar value in the three years after the shift to land value taxation as compared to the prior three years. That was 1.8 times more than Bethlehem’s increase in private construction & renovation during the same time period, even though Bethlehem (but not Allentown) received much federal grant money in the prior three years.

These figures come from a study of building-permits on file in the Allentown and Bethlehem city halls by Benjamin Howells (science researcher and one-time Allentown councilman), William Kells (science-oriented businessman), and Steven Cord (professor).