PROPERTY-TAX RATE CHANGES AND RATES OF DEVELOPMENT

Theoretically, unanticipated and anticipated property tax rate increas es should reduce and increase, respectively, residential development r ates. A discrete-time event history analysis of 224 originally undevel oped parcels presents a first empirical test. Property tax rate change s one year in the future are anticipated; increases strongly increase the probability of development in the current year. Rate increases in the current year reduce the probability of development in the current year but with somewhat less certainty, probably because they are only partially unanticipated. Accordingly, pre-announced property tax incre ases might accelerate the underlying rate of development as effectivel y as would tax concessions. (C) 1994 Academic Press, Inc.