Meanwhile, the elimination of tax penalties on buildings would stimulate construction and renovation, eliminating slums. When the rent is fully taxed, the price of land plunges to a small fraction of the unpriced land, so it becomes more affordable to own a house or condominium unit. Instead of paying a mortgage on the loan, one pays a tax on the rent, without the bank overhead. While geo-economic policy stimulates construction in the city, it simultaneously eliminates the urban sprawl that wastes land at the fringes of the city. Land is no longer prematurely subdivided, as there is no longer any capital gain from buying land.
Land is bought only for use.
Moreover, the tax is based on the economic rent, regardless of use, so there is no incentive to hold land waiting for the price to rise. Development therefore precedes in a concentric fashion rather than leapfrogging over holdouts in a checkerboard pattern. In this manner, geo-economic policy eliminates both urban blight and sprawl, while raising wages and substantially reducing poverty. I'm not claiming this is the only thing that needs to be done, but I am saying that this is the most effective policy to accomplish these ends. Clearly, other issues need to be addressed, such as education and traffic congestion.