A few years ago I wrote a post here, rather in the abstracr, on an idea then being touted in some circles for Wellington City Council to shift to a land-value rating model.
I ended that post this way
Three years on and the Council has a consultation document out. Submissions close on Sunday.
It is a rather odd document. First, it is astonishingly lightweight. There are five separate proposals – some apparently at odds with others, in a way never fully explained or reconciled – and yet the body of the document (the proposals) is only 13 well-spaced pages long (several of which are graphics or pretty pictures). One of the proposals is to up-end the existing rating model and replace it with land-value based rating. That gets five pages, but with almost no supporting analysis. It is the sort of document that perhaps might be a shop-window easy-to-read document for a household with no more than a vague interest (that was probably the two-page version that turned up in everyone’s letterbox), but there appears to be nothing else (there is no more-substantial document at all). A proposal this lightweight from a central government agency would surely be laughed out of court, the authors sent away to come up with something more in-depth, more comprehensive, and more rigorous.
Stranger still, a couple of months ago the Wellington City Council voted that it should go out of existence, merged into one or other of the amalgamation schemes that people have suggested. Why then would you consult on major changes in the rating system that may well a) never be implemented anyway, or b) quickly be reversed? The centrepiece of the consultation document is land-value rating, but as the document notes all the other Wellington TLAs use capital-value rating, so the proposal is to deliberately diverge just before (what councillors would prefer) an eventual convergence. As the document also notes, there has been a trend across the country for more TLAs to adopt capital-value rating (many have moved over the last 20 years), but the document neither engages with this revealed preference, nor makes any attempt to use those experiences to shed light on the likely impact of change, or of a different model over time.
I haven’t had a great deal of free time this week so my submission is more rushed than I would have liked. I lodged it this afternoon and a copy is here.
Of the five proposals, my focus was on two of them. The first was to begin to reduce the extraordinarily high commercial rates differential. Here is what I said on that one.
(“Appropriate starting point” that is if there is any commercial rates differential at all. It is difficult to see a robust case for one.)
The second, and the one that has made more attention, is the land-value rating proposal. It is extraordinary to be proposing such a disruptive shift when WCC’s own future is up in the air
And, after discussion of various specific points, notably that capital value rating is almost certainly better aligned with demand for, and use of, those council services that are not, and perhaps cannot be charged directly, I ended
(Again, two posts in a week is not a marker of any sort of return to regular blogging.)
