How to Escape the Land Trap

Reading The Land Trap by Mike Bird (2025), I had a sense I had read it before. This often happens when I read a large number of books in the same genre and subfield—the same arguments get explored again and again. In this case, the main thesis of The Land Trap is: When you make a place nicer, the land gets more valuable.

It then seeks to answer the question: What, as a society, should we do about this?

It shares that thesis and question with books like Land Is a Big Deal by Lars Doucet (2022), Capital City by Samuel Stein (2019), and Progress and Poverty by Henry George (1879). In urban economics, it is adjacent to the “Henry George theorem”: beneficial expenditure on local public goods is captured by an increase in land values. The question is old. So is the answer.

People want to live close to jobs and amenities. Companies want to locate close to materials and labor and markets to sell their goods. Firms that offer services to people want to be located close to people. All of these forces push towards agglomeration (read Triumph of the City by Ed Glaeser).

Pushing against agglomeration are pollution, traffic, congestion, and the costs of building taller. More people bidding more money for the same amount of space makes that space more expensive. Some people then trade the convenience of the short trip to jobs, amenities, and marketplaces for the cheaper space and lower pollution of living or working further away—out in the suburbs or boonies (read Order without Design by Alain Bertaud).

The supply of land is constrained. An increase in demand for a location thus means higher land prices. If zoning and building rules also constrain the supply of buildings and housing, then increased demand for a location will also make those buildings and housing expensive (read Arbitrary Lines by M. Nolan Gray).

Mike Bird in The Land Trap explores these relationships with a gallop through history starting in ancient Babylon, arriving in the late 19th century in western Europe and the United States—he pays appropriate homage to George—then ends the book with chapters on Japan, Hong Kong, China, and Singapore.

Bird says the purpose of his book is to illustrate why land is so important and how it shapes and threatens our future. As an economist, I think the book could have benefited from a few graphs and equations here and there. Instead, the book takes the form of a series of anecdotes involving specific countries and times. These places used the rising value of land, usually in connection with rising industry, technology, and incomes, to finance spending and further investment. When most of the value of the land became caught in private hands and therefore difficult to extract, when the society ran hard into the constraints of the limited supply of land, something ended up crumbling. Either the quality of life of the average citizen took a hit (Hong Kong), or there was a sudden stop in the financial sector (China), or the country entered an extended period of economic stagnation (Japan). Or the society was a weirdly authoritarian city-state that went from villages to skyscrapers and seems to offer few practices to emulate anywhere else but its leasehold system kinda, sorta, somewhat mimics a land value tax (Singapore).

Bird does not, in the end, propose a solution to what he deems the “land trap,” the idea that the unique features of land—both permanently constrained in supply and of only increasing utility as incomes and technology advance—make it a type of wealth unlike any other. He toys with the idea of a land value tax. He recognizes that it solves the trap. But he seems to believe that it is permanently politically unviable. Perhaps this is because he is British and the scars of 1909 run deep. As recounted at the start of the book’s third chapter, the United Kingdom’s Budget of 1909 attempted to implement a rather modest land value tax. It did not take.

To Bird’s credit, he does spend a fair amount of ink on the land value tax, grappling with it for most of chapters 3 and 4, and occasionally returning to it, even in the epilogue. His last word on it is rather dismissive, saying on page 291: 

“Today, any effort to tap the enormous wealth in land for the benefit of the broader public would run afoul of the interests of millions of small landowners who have benefited from a windfall that has lasted decades.”

This is a far better performance than Samuel Stein in Capital City. Stein rightly captures the meat of the problem, as on page 10: “A private land market is essentially a spoils system—whoever owns the land keeps the accrued benefits, whether or not the owner is responsible for them." But he manages to not even mention a land value tax until page 167: 

“The portion of profits a property owner generates from land itself—the value that comes from land’s location, preparation, proximity to transit and public infrastructure connectivity—would be understood as socially produced and therefore no one’s to own. A steep tax could expropriate that value and thus prevent landowners from profiting off the collective work of city making. This approach to land and taxation is at least as old as the nineteenth-century political economist Henry George—and therefore as old as the planning profession itself—but it remains relevant today.” 

Stein, after that brief, positive mention of a land value tax, which conveniently solves the entire problem Stein’s book grapples with, manages to carry on an additional 32 pages without mentioning it again once.

To Mike Bird’s discredit, however, The Land Trap has already been written successfully, twice. The first time was nearly 150 years ago in a monumental bestseller, George’s Progress and Poverty. The second time was Lars Doucet’s recent Land Is a Big Deal (2022), which began as a lengthy online book review of Progress and Poverty that was extended into three more parts (1, 2, 3), before finally becoming its own website, book, and then think tank.

Both books successfully answer the question: What, as a society, should we do when land gets more valuable?

With the simple, obvious, and completely correct answer: Tax the land.

The land trap has been solved by land value taxes. So why does the political problem of implementing land value taxes remain?

Personally, I think the most interesting example in exploring this question is the rise and fall of land value taxes in Pittsburgh, Pennsylvania. The City of Pittsburgh had a land value tax from 1913 to 2001. Pittsburgh’s land value tax’s initial success and broad popular support eroded away due to degraded state capacity. Disentangling the value of land from the value of the building on it requires administrative work. But over time the quality of Pittsburgh’s property assessments deteriorated. Newer generations of policy makers either forgot or never learned the benefits and requirements of the land value tax. Two excellent essays on Pittsburgh’s land value tax history are “Why So Little Georgism in America?” by Mark Allan Hughes (2006) and “LVT—Found and Lost” by Ian Hopton (2018).

Other interesting, recent examples of wrestling with the political problem of land value taxes can be seen in the 2023 debate in Michigan over whether to allow Detroit to have a land value tax, the 2025 adoption of land value taxes in Baden-Württemburg in Germany, and here in 2026 the proposed land value taxes in cities in Kentucky, Virginia, and Maryland.

In the US, at least, the political problem seems to remain because:

1. Homeowners (and therefore small landowners) are an extremely large constituency that votes.
2. Said median homeowner puts almost zero thought into property taxes other than an instinctive response of “they’re bad and I hate them.”

Thus property tax debates are a political third rail that no one wants to touch. The degradation of state capacity that destroyed Pittsburgh’s land value tax is in fact now eating away at its property tax system. For while property sales provide a baseline of property value, if a property has not been sold in a long time, say ten years, that baseline must be updated. That requires administrative capacity. Modern computational tools, combined with electronic property sale databases, make good administration doable even for small municipalities. Land value calculations may be arrived at via the same method. Either way, the system must still be implemented.

The good news is that if you make changes to property taxes slowly, gradually, and steadily, it appears that no one notices or cares. Forty-nine out of fifty states mandate regular property tax assessments. Rarely do complaints about such assessments build into consequential political pressure. The exception is in my home state of Pennsylvania, the one state that doesn’t mandate regular property tax assessments, and here assessments are a very big deal. If we did them regularly, no one would care.

When Pittsburgh introduced its Split Rate Tax in 1913, when it began to tax land at a separate rate from buildings, it made the change in small, gradual increments over the course of twelve years. The tax remained in place and popular for the following nearly eighty years.

The lesson we can draw, then, is this. How do we escape the land trap? Shift the tax burden onto land in small, gradual, incremental steps over many years so no one notices or cares.

Featured Image is Dense Tokyo Shot, by Ajay Suresh