The article (and Sidewalk’s blog post https://medium.com/sidewalk-toronto/sidewalk-toronto-project...) has few details, so everyone is only responding to the suggestion that tax increment will be paid to Sidewalk Labs. It’s odd to see the outrage over that; it is one of only a couple ways that a government can pay a developer for public works:
1. Government buys land (including surrounding land), pays for development, and takes the risk that the increased rents don’t pay back the bonds
2. Private developer buys land (including surrounding land), pays for development, and takes the risk that the increased rents don’t pay back the bonds
Property taxes (and tax increment) let the government take partial equity in the surrounding land rents, allowing the government to make any linear combination of how much ownership to give to existing landowners, the developer, and the government. It seems odd that there should be moral outrage over having the developer take more of the risk vs. the government taking more of the risk.
1. Government buys land (including surrounding land), pays for development, and takes the risk that the increased rents don’t pay back the bonds
2. Private developer buys land (including surrounding land), pays for development, and takes the risk that the increased rents don’t pay back the bonds
Property taxes (and tax increment) let the government take partial equity in the surrounding land rents, allowing the government to make any linear combination of how much ownership to give to existing landowners, the developer, and the government. It seems odd that there should be moral outrage over having the developer take more of the risk vs. the government taking more of the risk.
Alon Levy wrote a related blog post discussing taxation vs. ownership in regards to subways here: https://pedestrianobservations.com/2017/09/07/meme-weeding-l...