Australian Experiences
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A few hundred people owned large areas of cow paddock and market garden and vacant land and refused to sell them for housing partly becuase they believed the speculative value of the land would rise. Such people blocked Camberwell's growth and contributed little to its municipal revenue. At Camberwell junction and other shopping centres, owners of old woodon shops were paying smaller rates than the enterprising landlords who built expensive shops and attracted business to the centre. In residential streets, landlords who allowed houses to go unpainted paid smaller rates, while the landlord who improved his property and therefor the neighbourhood's appearance and land values was penalised for his enterprise with higher taxes. The reformers argued that a new method of municipal taxation would accelerate the pace of Camberwell's growth and improve the quality of the suburb. Calling for a referendum, they carried the poll after a fierce campaign and Camberwell and Caulfield became the first Victorian municipalities to tax the land and not the buildings. From 1922, the new method of taxation undoubtably forced many large landowners to release vacant land for house building..." Geoffrey Blainey, A History of Camberwell, 1980, Lothian Publishers, p86 |
Australian Experience #1
In the five years prior to 1923 (the introduction of site value) the total number of dwelling permits issued in Camberwell was 2051. In the following five years the number increased to 4373. Camberwell tops suburban local government areas building statistics until 1943.
Australian Experience #2
The Land Values Research Group in 1949 ("Rising Muncipal Costs. A Comparison of the Relative Abilities of Alternative Rating Systems to Provide Increased Rate Yield") conducted a twenty year survey on the per acre increase in rate yield for seven (then) outer suburban areas using site value and ten which used net annual value (site and buildings). Unimproved Value local governments included Brunswick, Coburg, Camberwell, Caulfield, Essendon, Oakleigh, Sandringham. Net Annual Value local governments included Brighton, Footscray, Hawthorn, Kew, Malvern, Northcote, Moorabin, Preston, Williamstown, Heidelberg. The per acre increase in rate yield was 9L 3sh for SIV councils, and 6L 2 for NAV councils. In other words, the use of site value rating led to greater economic development and greater improvements in land values.
Australian Experience #3
The American Institute of Economic Research conducted a study of construction activity in Victoria from 1927 to 1951; an empirical analysis of data on building during this twenty five period. "All councils that had changed from NAV in the 1940s [to site value] were shown to have experienced marked increases in building activity immediately after the rating change, above what would be expected."
Consturction activity was found to be in the cities at or near the centre of the Melbourne municipal area, and among suburban councils greatest in those councils rating site value.
Australian Experience #4
After 1945 some 22 councils changed from NAV to site value. Increases in building activities were followed:
Ararat 60%, Benalla 39%, Castlemain 55%, Cohuna 25%, Horsham 12%, Kerang borough 20%, Kerang shire 119%, Kilmore 24%, Korumburra 168%, Maryborough 48%, McIvor 69%, Mildura 41%, Moe borough 50%, Sale 39%, Swan Hill 111%, Towong 90%, Traralghon 7%, Wangaratta 49%, Warnabool 89%, Wondonga 34%, Wonthaggi 209% (anderson, p13)
Historical Experience #5
The Land Values Research Group in 1963 conducted a "A Study of the effects of local government rating systems upon the social and economic development of the Australian states". The results showed that those states which had greater use of site value had greater improvements in the amount of acreage being used for crops. In other words, where site value existed, farmers were encouraged to put the land to use, and where site value did not exist, land was used by speculators.
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Site rating (1929-38)
Queensland +68% |
NAV Rating
SA -5% |
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Site Rating (1946-58)
Queensland +76% |
NAV Rating
SA +7% |
N.B.: During the war years agriculture was under government direction.
