The social system of real property ownership: Public and nonprofit property tax exemptions and corporate tax abatements in city and suburb, 1955--2000

This dissertation studies the social system of real property ownership and three sub-systems: taxpaying industrial, commercial, residential and agricultural sectors; exempt property owned by governmental, public school, charitable, private educational and religious sectors, and corporations with property tax abatements. The dissertation asks whether the growth of exempt property has had significant unanticipated consequences for urban areas. Using property tax records of 17 cities and their suburbs, evidence for two competing theses derived from Charles Perrow's society of organizations perspective is assessed: a displacement thesis (a negative externality, associated with removing developed taxable property from the tax rolls) and a development thesis (a positive externality, associated with the acquisition and development of land and under-developed property). Chapter two discusses the history of exemptions and abatements in Ohio and recent demographic trends. Chapter three reports that exempt property increased from 14% to 24% of real property in the cities, but this change is linked to lower annual average growth rates for taxable property in the cities, compared to the suburbs.;Chapter four introduces an original method of displacement-development analysis utilizing a displacement-development index and a percentage displacement statistic. Results show that newly exempt residential property involved more development than displacement. Results for commercial-industrial property are inconclusive, but estimates indicate that exempt property grew due to inflation and new construction, not displacement. These results are reinforced in chapter five by a case study of public and nonprofit charitable parcels showing that 80% of exempt parcels and 93% of exempt value was in parcels that originated in development not displacement.;The final chapter concludes that the predominance of evidence supports the development thesis. The results affirm the value of displacement-development analysis for further research on property tax exemptions. Consistent with Perrow's perspective, large public and nonprofit organizations were the driving force in carrying out the bulk of exempt property development. Although it was more often smaller organizations which were responsible for the externalization of costs associated with the small displacement effect, Perrow's theory was shown to have value at the institutional level of analysis. The dissertation contributes to a growing economic sociology of externalities.