Abolish Property Taxes?
Florida Republicans propose not one, not two, but seven different constitutional amendments to cap, cut, or even eliminate property taxes.
Happy Tuesday, and welcome to another edition of Rent Free. Since Halloween is upon us, this week's newsletter zeroes in on some of the spookier elements of housing policy.
Rent Free Newsletter by Christian Britschgi. Get more of Christian's urban regulation, development, and zoning coverage.
First up is our lead item on the scariest of them all: property taxes and the increasingly popular, potentially even scarier idea that we should eliminate them entirely.
Next, we cover a truly frightful tale about the continued spread of vampiric rent control policies in Minnesota. Technically, these can't hurt you if you don't invite them into your city, but politicians inexplicably keep making that mistake.
To avoid things getting too dark this week, we also have an update on a New Jersey property owner triumphing over the forces of darkness that attempted to seize his family's farm via eminent domain.
Lastly, we'll consider whether President Donald Trump is preventing the next haunted house by knocking down the East Wing of the White House or simply awakening slumbering spirits best left undisturbed.
Florida Revolts Against Property Taxes
In a 1978 speech on tax reform, Milton Friedman noted that property taxes were, somewhat unfortunately, a lot more unpopular than comparatively more ruinous income taxes.
The property tax "is not unpopular for good economic reasons," he said. "It's unpopular in my opinion for one simple reason. It's the only tax left on the books for which people have to write a big check."
In the nearly five decades since his speech, his observation has become only more true, as evidenced by the brewing property tax revolt in Florida.
In the run-up to the 2026 legislative session, lawmakers have proposed placing not one, not two, but seven constitutional amendments on the November 2026 ballot to cap, cut, or even eliminate most property taxes.
The two most radical measures would eliminate nonschool property taxes on owner-occupied housing in their entirety. The other five would make more modest changes, like raising the cap on untaxed assessed property values, exempting seniors and fully insured homeowners from nonschool property taxes, and capping yearly growth in property taxes.
Realtor.com provides a good, brief summary of each proposal.
Gov. Ron DeSantis, while critical of putting more than one property tax reform on the ballot, has made clear his opposition to property taxes as a concept.
"Your personal home, you shouldn't rent it from the government, you should own it," said the governor in a Fox News interview.
???? BREAKING: Governor DeSantis to allow Floridians vote to ABOLISH PROPERTY TAXES on 2026 midterm election ballot!
"That's coming to a ballot near you in November of 2026. We need 60% of Florida voters to do it."pic.twitter.com/3Zkxj41mFo
— Publius (@OcrazioCornPop) October 22, 2025
I assume that Rent Free readers' opinions on taxes generally span the political spectrum. I myself confess a very Friedmanite enthusiasm for cutting taxes anytime, anywhere, for whatever reason.
Nevertheless, Florida Republicans, in their rush to eliminate property taxes for homeowners, could well end up leaving the state with a much more inefficient tax system and make housing a lot more unaffordable for first-time homebuyers in the process.
Lost Revenue
The most immediate problem with Florida's various proposals to slash property taxes is that they include no plans to replace the lost property tax revenues.
As the Tax Foundation's Jared Walczak dryly notes in a lengthy white paper on property tax reform published earlier this month, these measures would "charge the legislature with working out minor details like how to replace the lion's share of local tax revenue."
According to research from the Florida Policy Institute (FPI), eliminating homestead property taxes (that is, taxes on owner-occupied primary residences) would cost local governments and school districts a combined $18.5 billion in lost revenue each year.
Preserving school property taxes, as Florida's most far-reaching proposals would do, would still leave local governments with a collective $10.8 billion revenue hole to fill.
Florida currently has no income tax, so the most immediate way of paying for property tax cuts would be a hike in sales taxes. And they'd have to be hiked a lot.
The Tax Foundation estimates that the average statewide sales tax rate would have to more than double, from the current 7.05 percent to 15.34 percent, to cover the costs of eliminating the property tax.
Given that some places have more taxable sales than others, local sales tax rates would vary widely. The Tax Foundation estimates that counties with lots of highway-side retail and few residents would see property taxes rise only modestly. In lower population rural and bedroom communities, sales taxes would have to rise as high as 32 percent to make up for the lost property tax revenue. This analysis does not account for any reduced sales volume caused by rising sales taxes.
One could well say that Florida's local governments should simply slash spending to make up for any revenue losses from property tax cuts. Surely there's plenty of fat that could be cut from municipal and county budgets.
But the most far-reaching property tax proposals on offer would impair local governments' ability to pay for property tax cuts with spending cuts.
Both HJR 201 and HJR 203, the two proposals that would entirely eliminate homestead property taxes, would also forbid localities from cutting spending on law enforcement. The only difference between the two measures is that HJR 203 would phase in over ten years, while HJR 201 would go into effect on January 1, 2027.
So, at a minimum, police spending would have to be covered via other tax increases.
Lost Efficiency
Friedman's qualified support for property taxes (and specifically property taxes on the value of unimproved land) was premised on the idea that the taxes that would replace it, namely sales and income taxes, are more economically destructive.
All taxes reduce the amount of productive economic activity associated with the thing being taxed and change people's behavior in distortionary ways.
The same is, of course, true of property taxes, which can be expected to reduce spending on maintaining buildings and developing property.
But economists generally view sales and income taxes as having a greater negative impact on productive economic activity.
That's particularly true when one compares local property taxes with local sales and income taxes.
It's easier for people to move to avoid income and sales taxes. That might sound like a good thing. But if people and businesses move away from places where wages and sales volumes are higher in order to avoid taxes, economic productivity takes a hit.
Since property is immobile, less productive activity is lost by people moving their investments to less desirable locations.
Over at the American Institute for Economic Research (AIER), Jason Sorens notes that in addition to being a "capital tax" on investment, property taxes can also act as a "benefit tax" that pays for local government services.
Provided that property tax revenue is spent within the jurisdiction that levies the tax, these taxes are closer to a user fee paid by the consumers of government services.
Sorens also notes that property taxes encourage more transparency and accountability in the provision of government services.
Sales and income tax regimes tend to be levied by state governments, which then distribute revenue to localities. That makes it harder to hold politicians accountable for inefficient provision of government services. It also largely eliminates the ability of people to choose between high-tax, high-service jurisdictions and jurisdictions that keep taxes low and provide minimal services.
Friedman was right to note that people hate property taxes because they have to pay them all at once. But that's a feature, not a bug. Having to write a big annual check to the government focuses the mind on the actual cost of government and whether the benefits it provides are truly worth it.
Lost Affordability?
The primary factor driving Florida politicians to want to reduce or eliminate property taxes is that they've gone up a lot in recent years, putting financial pressure on homeowners.
The most straightforward conclusion is that cutting property taxes would make housing more affordable. But that view may well be too simplistic.
Writing in Works in Progress in 2023, Manhattan Institute scholar Judge Glock cites academic work showing that property taxes and impact fees can actually increase construction by local governments. Provided those taxes stay within a local government, local officials have an incentive to approve more development and reap the additional revenue.
Glock adds in an email that if property taxes pay for superior services and amenities, that would encourage people to move to higher-tax jurisdictions, thus raising housing construction via increased demand.
We see some evidence of this at the state level. California famously has a lot of restrictions on raising property taxes and generally is a lot less reliant on them than other states. It also approves a minimal amount of new development. Texas has very high property taxes and approves a huge amount of development.
Sorens' piece on property taxes likewise cites an academic study of property tax caps in Georgia, which found that the lower tax burden was fully incorporated into higher home values.
That finding highlights a tradeoff of cutting property taxes. Incumbent homeowners benefit from higher home values and lower ownership costs. But first-time homebuyers suffer the higher prices.
Slouching Toward Ancapistan
Whatever the incentives property taxes provide local governments to approve more development, these taxes can still be assumed to discourage investment in real estate development on some margin.
And there's nothing that literally requires jurisdictions to have high property taxes before adopting a permissive attitude toward development.
One can imagine a libertarian utopia where localities have neither zoning nor property taxes, and services are provided by private parties who charge fees to their customers. In this world, one would assume rates of development would be high and the costs of housing would be low.
Unfortunately, that's not what Florida's property tax abolitionists are proposing. Instead, their various proposals would largely result in replacing relatively efficient taxes with relatively inefficient ones, benefitting incumbent homeowners but making housing more unaffordable for would-be buyers.
That's not a great tradeoff.
This doesn't mean that it's a good idea to give local governments carte blanche to hike property taxes as high as they wish. Tax policy wonks have proposed a number of ways that the state can more efficiently constrain property tax growth, usually through caps on annual increases.
I'm not unsympathetic to the view expressed by DeSantis that yearly property tax payments do turn homeownership into something akin to renting your property from the government.
The problem is that any taxes that would replace property taxes suffer from similar attacks. Income taxes deprive a man of the sweat of his own brow. Sales taxes penalize someone for simply participating in the market.
Taxes are theft, as the old libertarian stock phrase goes. If one wants to reduce the overall incidence of government taxes/theft through a mixture of spending cuts and privatization, I'm all ears.
But the various plans offered by Florida Republicans to eliminate property taxes look a lot less like a libertarian plan to shrink city hall and more like a plan to rob Peter instead of Paul.
New Jersey Town Tentatively Agrees to Not Seize Family Farm for Affordable Housing
Readers might recall a story we've been following in New Jersey, where the township of Cranbury has been attempting to seize the family farm of Andy Henry in order to build an affordable housing project.
In some happy news for Henry, Cranbury announced last week that it would back off the seizure of his farm, pending an expected rule change from the state government that will open up an alternative site for the planned development.
For months, the town has been insisting that Henry's property is the only place it can site a 130-unit affordable housing development, which will partially meet its obligation under the state's fair share housing law to enable the creation of 256 affordable housing units.
Both Henry and fair housing advocates have disputed the town's claim that state law is forcing them to take the farm. They've argued that there are, in fact, several other properties aside from Henry's property—an active farm surrounded by warehouse developments—that would be a more suitable location for affordable housing.
Under the tentative agreement released last week, the town said the state would amend rules that restrict the use of affordable housing tax credits near warehouses. This would allow tax credits to finance an affordable housing project on a different property, thus obviating any need to take Henry's farm.
Gov. Phil Murphy said in a statement that the rule change is expected to happen by the end of the year.
The town's plan to abandon the seizure of Henry's farm is still tentative as long as the state's rule change is still pending.
But Henry says that he's optimistic that he'll be able to keep his family farm.
"This is something that we hope will work out favorably for all the parties involved. It's been a long way of getting here, and we're not done yet, but this is very encouraging," Henry told Reason last week.
You can read my full write-up of the case here. And see here and here for past coverage of the Henry farm controversy.
Minneapolis Mayoral Candidate Omar Fateh Calls for Rent Control
In a new video posted to X, Minneapolis councilmember Omar Fateh attacked Mayor Jacob Frey, who he's attempting to unseat in this November's mayoral election, for focusing solely on building more housing as a means of bringing housing costs down.
"We need to do more than just build. We also need to stabilize rents," said Fateh.
Jacob Frey's only solution to the affordable housing crisis is to build more, but under his leadership we've only seen rent and property taxes go up. When I'm elected, yes we will build more housing AND we'll use every tool in the toolbox to address housing needs in Minneapolis. pic.twitter.com/8A0qHPhbHM
— Omar Fateh (@OmarFatehMN) October 25, 2025
That a staunchly progressive politician would support rent control is not super surprising news. It is a little shocking that a Minneapolis politician would support rent control, however, given the disastrous results of neighboring St. Paul's foray into regulating rents.
Back in 2021, St. Paul voters passed a sweeping rent control measure that capped yearly rent increases at 3 percent, with none of the usual carveouts for vacant units and new construction, or even automatic allowances for inflation.
The policy went into effect in 2022. The immediate results were grim. Developers canceled proposed projects and froze ones already well into the development process.
City leaders were sufficiently spooked to pass a few moderating amendments the following year. When those did little to revive construction, they once again changed the law this year to completely exempt newer buildings from rent controls.
St. Paul's experience should be a haunting, cautionary tale about what not to do. Clearly, it's a lesson that Fateh has not learned.
The Shadowy Legality of Trump's East Wing Redevelopment
The Wall Street Journal has a deep dive into the backstory of President Donald Trump's surprise demolition of the East Wing of the White House, which he plans to redevelop into a much larger ballroom.
As the Journal notes, Trump followed basically none of the process that would typically govern even much more modest changes to the White House grounds. Former President Barack Obama, the story notes, got the necessary sign-offs of the various review orders just to add basketball court lines to the tennis court. Trump tore down a building without asking anyone.
Few people dispute the White House's need for a larger event space. Trump's sudden, unilateral decision to tear down the East Wing and fund its redevelopment with private donations has nevertheless provoked a lot of backlash.
There does appear to be some open questions about whether Trump's demolition is illegal, or whether he's just brashly ignoring informal norms. Plenty of the president's critics have been struck by the impossibly on-the-nose symbolism of the whole thing. (He's literally destroying the office of the presidency!)
On the flipside, folks like Substack writer Ben Dreyfuss have praised Trump's decision to move fast and break things. The White House needs a new ballroom, and we shouldn't let purely procedural historic preservation requirements gum up necessary projects.
As the risk of being a squish, I find it hard to find a more general takeaway from the East Wing demolition.
I do consider historic preservation laws that prevent upgrades or redevelopment of private properties to be an illegitimate use of government power, especially when they apply to buildings that are landmarked over the objections of the owner and when they don't come with offsetting public subsidies.
On the other hand, the White House is not private property. It's not crazy to expect that presidents would act a little more deliberately when making major alterations to a property they'll hand off to the next guy in a few years.
The one thing I can say for sure is that the historic preservation laws governing the White House should really be the ceiling of restrictiveness. If the president can redevelop his temporary residence without needing to pull a bunch of permits, private citizens shouldn't have to put up with any more red tape when carrying out improvements on their own property.
Quick Links
- Hernando County, Florida, is experimenting with using AI to speed up the processing of zoning and permitting applications. One hopes the county AI will eventually achieve general intelligence, go rogue, and then delete the entire zoning code.
- House Republicans provide some minimal pushback to the Trump administration's efforts to make substantive changes to homeless assistance grants.
- My colleague Justin Zuckerman has a great new documentary on Zohran Mamdani's proposed rent freeze.
- The United Kingdom gets closer to adopting an extremely restrictive set of restrictions on landlords' ability to not renew leases or raise the rent.
- In New York City, a quiet effort to roll back the city's effective ban on Airbnb.
