The article presents a model of the market for commercial or industrial real estate at the local level that is used to derive an equation for the property tax rate that maximizes tax revenue - given that demand for real estate at the local level is highly elastic and capital is mobile in the...

This article shows that, because real estate investors borrow at an interest rate that is greater than the rate at which they can lend, the reservation value of real estate investments declines with the amount borrowed. The proof is a modified version of the home-made leverage examples...