The Problem of Idle Urban Real Estate. Foundations of a regulation proposal for Argentine municipalities.

Abstract

The problem of idle urban land appears as a central issue in Latin American cities, since they limit the consolidation and densification of the urban plot, generating social costs. In this article we analyze the legal, urban and economic foundations that justify the creation of a tax in Argentinean local governments that burdens the possession of idle urban land, in order to induce conduct changes and to mobilize land supply. We propose that the charging of this tax will promote compatible land uses with its social and economic role. In addition, it will help to limit the increase of the urbanization costs, which restricts the access to land and housing and unbalances municipal finances. It will facilitate the channeling of savings to more socially productive investments than real estate ones. These factors may improve local competitiveness and population’s quality of life, promoting social welfare.