The Investment Decision in the Central City: A Consideration of Property Tax Abatement

摘要

Dilapidated and deteriorated housing in the large central cities of this country continues to be a largely unresolved social problem. Property tax abatement is one of several proposals that have been put forth and implemented to stem the tide of central city decay. This article develops an investment decision model which stipulates the conditions and circumstances under which a property tax abatement program will motivate investment in central city housing. The tax abatement program for the city of Pittsburgh is reviewed in light of this model and general recommendations are made for the successful implementation of such programs in the future.