Center for Land Economics

Center for Land Economics | June 2026

Taxing Land, Not Homes: A Revenue-Neutral Path to Unlock Spokane’s Underused Land

Nearly $1 billion in Spokane land value sits vacant or significantly underdeveloped, much of it concentrated downtown and in other high-demand locations where housing and economic activity are needed most.

This report models a revenue-neutral shift in the property tax structure — exempting a portion of building value from taxation and raising the overall rate to collect the same revenue. The result shifts the tax burden off homeowners and developers and onto landowners who leave valuable parcels vacant or underused.

The reform is progressive, preserves existing taxpayer protections and revenue constraints, and is supported by decades of evidence from Pennsylvania cities that adopted similar land-focused reforms.

Download Full Report (PDF)
Spokane report cover

Key Findings

  • •The median single-family home sees about a 4 percent tax decrease; the median small multifamily property sees a 10 percent decrease.
  • •Vacant land and surface parking lots see median tax increases exceeding 110 percent, raising holding costs on speculative and low-intensity uses.
  • •The reform is progressive: lower-income neighborhoods experience larger median tax reductions than higher-income ones.
  • •About $917 million — roughly 11 percent of Spokane’s non-exempt land value — sits in undeveloped or underdeveloped parcels concentrated in the most valuable locations.
  • •Pennsylvania cities that adopted similar land-focused reforms saw higher housing production, stronger infill development, and measurable growth in business activity.