The High Fiscal Cost of Short Buildings

(cc photo by cbowns)

I continue to agree with Ryan Avent on the (lack of) merits of DC’s super-strict restrictions on building height (though I think he’s a bit too optimistic here about the possibility of deregulation substantially altering the mix of business functions found in the city), and was glad to see him point to the existence of a study indicating that a modest 30-foot increase in the height limit “could generate an additional $10 billion in tax revenue over 20 years if it raised the height limit to 160 feet.”

To get a sense of the scale of that, the Fiscal Year 2011 budget (PDF) anticipate $0.9 billion in revenue from the city’s 10 percent sales tax. In other words, a very modest increase in the size of downtown office buildings would probably let us cut sales taxes from 10 percent to 5 percent. That would be an absolute boon for the city’s poor residents, to say nothing of making it easier for local entrepreneurs to start successful businesses.

And that would be a very modest increase. The tallest building in Providence, Rhode Island is 428 feet tall and Providence is hardly a town where the sun’s been blotted out. Pittsburgh has an 841 foot building.

I’m not sure a free-ish market in downtown office buildings would generate anything as tall as the US Steel Tower, but it would certainly generate buildings taller than 160 feet and far more than $10 billion in additional tax revenue over a twenty year window. That would finance not only a cut in the retail sales tax, but construction of a streetcar system, more frequent buses, more cops, and better-maintained streets and sidewalks to say nothing of additional employment opportunities for the city’s working class residents or the enhanced ecological sustainability of the entire region.

On the other hand, some people’s view of the Washington Monument would be messed up.