Please preserve our village aura | Letter
Published 12:00 pm Thursday, May 26, 2016
The following words are those with which I addressed the Mercer Island City Council on May 9:
Please preserve our village aura. No more than two stories.
A Mercer Island landowner informed me, “The value of the land justifies more than two stories.”
It also generates a greater revenue stream, which is unearned income, from which capital accumulates. There is no risk for the landowner or his banker.
Land is a natural resource, just as the air we breathe. At some point, some enterprising person staked out a plot and put his name on it. It was the inception of the real estate industry and the rent, capital and wealth that accumulates from it.
Rent pays interest to the banker and management fees. Any revenue above that goes to the landowner. It’s an unearned revenue stream, which receives preferential taxation.
John Stuart Mill wrote, “The great landowners get rich while they sleep.”
Should not a portion of it go to the city, which pays the maintenance and invests in the roads, streets, bridges and utilities that render value to the land? Asked about a land tax, Adam Smith said, “Nothing could be more reasonable.”
Winston Churchill said the landlord “contributes nothing to the process from which his enrichment is derived.”
Our tax system treats increases in the land value as decreases. You know about depreciation. Landowners are also beneficiaries of capital gains tax. These preferences allow them to become wealthy. It’s a great system for the landowners and unlikely to change. It also drives the development of the Town Center.
The system also allows for advice and consent. I’m advocating for a village aura with a two-story limit on buildings. I hope this advice makes your consent less difficult.
Cy Baumgartner
Mercer Island
