Zahirovic-Herbert and Sunderman Receive Land Economics Foundation Research Award

Will investigate how property taxes impact development in Memphis

Two University of Memphis Department of Finance Faculty, Dr. Velma Zahirovic-Herbert, professor and Martha and Robert Fogelman Family Chair in Sustainable Real Estate, and Dr. Mark Sunderman, professor and holder of the Morris Fogelman Real Estate Chair of Excellence in the Fogelman College of Business and Economics, were recently awarded a research project grant from the Land Economics Foundation (LEF).

The project entitled “A Barrier to Affordability: How Current Property Tax Policies Impact Land Development,” will study how property tax regulations contribute to the development of the Memphis Medical District (MMDC, which includes St. Jude Children's Research Hospital, the University of Tennessee Health Science Center, Regional One Health, Methodist University Hospital, Le Bonheur Children's Hospital, the Southern College of Optometry, the Baptist College of Health Sciences, and the Memphis VA Medical Center). The study will investigate the impact of the different tax rates imposed on residential vs. commercial properties in the context of the per unit residential cap, which is currently a 4-unit cap for developers in Tennessee. This study will determine if the per unit residential cap may potentially impact the development of the MMDC and whether this impact is unique to MMDC or a more general problem across the state. The analysis of the tradeoffs between taxes on land value and improvement value will inform policymakers on whether a revenue-neutral movement away from improvement taxation toward land taxation is beneficial and supports development. The findings will add to the discussion on the connection between urban spatial expansion and property tax and the potential tax barriers to medical districts or other special use districts.

About the Land Economics Foundation (from the LAI website)

The Land Economics Foundation (LEF) is a not-for-profit charitable foundation organized to administer an investment fund providing grants to advance the application of land economics. LEF was established in 1965 by Lambda Alpha International (LAI), a global land economics society where top professionals connect, share knowledge, and advance best practices. The LEF is focused on the following key research priorities:

• Renewal and Resiliency of Urban and Rural Areas in Face of Climate Change
• Changing Work and Commuting Patterns and Impact on Workplaces and Transit
• The International Economy and Its Impact on Cities and Industrial Development
• Equity and Inclusion, the Legacy of Racism, and Increasing Diversity
• Land Entitlements, Planning Approvals, Housing Legislation and Cost Impacts.
   

If you have questions or further interest in this research, contact Zahirovic-Herbert at velma.zahirovic-herbert@memphis.edu or Sunderman at msndrman@memphis.edu.