Downtown Seattle holds some of the most valuable real estate west of Minneapolis and north of San Francisco. Yet walking through Seattle’s urban core reveals unwelcome surprises: rundown buildings, empty land parcels, and surface parking lots on prime real estate. Undoubtedly, this is a problem faced by all large cities.

But what explains so much valuable real estate essentially still sitting idle? The structure of the property tax. Under today’s tax rules, leaving a lot empty or letting a building slowly rot gives property owners a light tax bill, thus allowing landowners to perpetually hold onto under-developed properties. Perhaps the simplest solution is an idea that’s been around since the late 1800s: taxing land values, not buildings, to discourage speculation and encourage compact, infill development.