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The solution to the housing crisis is extremely simple

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Re: The solution to the housing crisis is extremely simple

#51

Post by anovikov »

jacknews wrote: post #50
anovikov wrote: post #49

Earlier quoted context omitted.

Why everyone needs to be able to afford the housing? Down here in Europe we have about 30% homeownership rate and nobody says we are in a crisis, in fact, we are doing very well. U.S. is again near top of the world in homeownership rate. You are making things up - trying to see a problem where there isn't. Better think about fixing childcare, and healthcare - that's where the real crisis is.

Yes they could just live on the street. By "afford housing" I don't mean just buying, but also renting. Rent prices reflect sale prices.

Well, this again sounds like communism. No one is entitled to real estate. For that matter, there is a great amount of essentially free real estate in every country, a lot of it in good repair - just in the places where there are no jobs. That isn't even a thing - what's limited is a supply of real estate in places where everyone wants to be.

No fiscal solution could fix San Francisco housing prices, only 'fix' would be crushing Silicon Valley so it ceases to be attractive place to be.

If renting is a problem you are doing something wrong. Median gross rent in U.S. is $959 a month. That doesn't sound much for developed country to me. Buying real estate is accessible to majority of U.S. households, in fact almost every dual income household. 63.7% have it, and many who don't have it, just don't want it (for example, i am making what it takes to buy an apartment i am living in, in 8-9 months, but i am not buying because i am not a gambler). To me not buying real estate seems a rational choice, unless you have a very 'fixed' career - like, certain that you are going to stay in a place for decades. There are fewer and fewer people like that, labor market gets a lot more fluid.

Re: The solution to the housing crisis is extremely simple

#52

Post by tps5 »

true_religion wrote: post #43
tps5 wrote: post #10

Earlier quoted context omitted.

It's not a horrible idea. It's an old idea that's been popular with various economists including (gasp) Adam Smith: https://en.wikipedia.org/wiki/Land_value_tax (I don't know enough about this subject to have a strong opinion either way, but I feel pretty confident saying that this isn't a terrible idea)

Isn't saying that it isn't terrible an opinion of itself? Also pointing out that hsitorically people thought certain something isn't enough on its own to show that it is the least bit reasonable in the modern era.

Some pretty highly regarded economists in the past century have backed up the idea of a land value tax. Does that alone make it a great idea? No, but I think it makes the parent comment seem pretty silly.

I certainly have an opinion, but (like I said) it's not a strong one. I don't understand all the moving pieces and all the incentives involved here, but I'd be interested in seeing some more knowledgeable people talk about the LVT.

Re: The solution to the housing crisis is extremely simple

#53

Post by pavel_lishin »

Jtsummers wrote: post #29
infogulch wrote: post #13

Earlier quoted context omitted.

The path is a bit roundabout but it makes sense. The point is to make underutilized land uneconomical to keep that way. Landowners can no longer just sit on land that's not generating revenue. To generate revenue they will build more housing. The economics of supply and demand with additional supply will make housing cheaper more than additional taxes passed on to tenants will make it more expensive.

But the article's proposal is summed up here: Income from land is thus completely unearned and thus any income gained from land ownership should be completely taxed at 100%. Taxing income from land, not land itself, based on some formula to determine it's value. This wouldn't cause unutilized land to be used, because it would have no taxes (other than base property taxes), but renting it out, for instance, would net…

That's not his proposal being summed up, that's the problem summed up.

> you might as well leave it empty until the property taxes (if you kept them in this scheme) became overwhelming.

I believe he's proposing increasing property taxes until they're 100% (though I'm not sure what this means; you basically have to pay to purchase the land every year?)

Re: The solution to the housing crisis is extremely simple

#54

Post by pavel_lishin »

SomeStupidPoint wrote: post #11
pavel_lishin wrote: post #2

I may not be understanding his proposal fully, so please bear with me. If I'm making a complete jackass of myself through misunderstanding, let me know. > It’s worth noting that more tax on land doesn’t mean higher housing costs! For those living in enormous houses in very expensive neighbourhoods, it certainly will: but that’s by design. But shifting the tax burden onto rich folks like this, means that the average p…

How do they pass a 100% tax on net income on? Raising the rent more (to offset the tax) generates new taxes in exactly the amount raised. Now, I'm sure they'll just layer it through a few steps to avoid the tax (like outrageously priced management services they happen to own), but I'm not seeing how they'd (directly) pass the tax on.

I don't think OP's proposal is to tax the income from the land, but the land itself. The whole idea is to prevent people from just sitting on un-utilized land.

Re: The solution to the housing crisis is extremely simple

#55

Post by pavel_lishin »

djrobstep wrote: post #19
aqsheehy wrote: post #4

I feel like I'm failing an IQ test here. I assumed he meant 100% tax on rent, but then there's this line: >Owners of valuable land would be forced to make maximum use of land with higher density rentals in order to make sufficient rental income to pay the land tax. What would the 100% be on exactly?

100% of the rental income generated from land value (as opposed to buildings/improvements). Formula: total rental income * (value of land / value of land and buildings)

Your article did not make this clear at all.

Re: The solution to the housing crisis is extremely simple

#56

Post by dragonwriter »

tps5 wrote: post #10
gragas wrote: post #3

>Income from land is thus completely unearned and thus any income gained from land ownership should be completely taxed at 100%. That pretty much sums up the article. This is a horrible idea and will never happen.

It's not a horrible idea. It's an old idea that's been popular with various economists including (gasp) Adam Smith: https://en.wikipedia.org/wiki/Land_value_tax (I don't know enough about this subject to have a strong opinion either way, but I feel pretty confident saying that this isn't a terrible idea)

> It's not a horrible idea.

It is, for a wide array of reasons. Assessment for ad valorem, as-is, taxation of land is highly contentious as it is, but there is at least some coherent basis for such assessment since there are usually reasonably comparable referents involved in actual marker trade on which to base an assessment.

LVT inherently relies on assessment of the unimproved value of improved lots, which means you need to assess something for which there will rarely be comparable examples in trade. That's a practical concern.

There's a deeper theoretical concern that the fundamental basis of LVT (that land in the conventional sense represents the ultimate source of all extractions from the commons, such that an LVT represents a generalized tax on the use of the commons) is fundamentally flawed. While land holding can be viewed as a kind of use of the commons which should be taxed, wealth more generally itself (and moreso the farther that wealth is beyond that which one could personally supervise with one's inherent bodily facilities) represents such a use in any system with public enforcement of property rights, as do resource extraction and pollution generation.

> It's an old idea that's been popular with various economists including (gasp) Adam Smith

Adam Smith also thought that the landholding class was inherently the only class that could be trusted with government, since the business-owning class (Smith wrote early enough in the feudalism-capitalism transition that the fact that the latter class would subsume the former was not obvious to him) would favor interests that were distinct from the common interest, while the working class, which like the land-holding class would have interests aligned with the common interest -- would inherently be too ill-informed to understand or politically pursue their own interest.

Smith is an important and often insightful figure in the history of political economy, but, especially when it comes to the relationship of land-holding to capitalist and post-capitalist economies, not exactly a source where "he thought X was a good idea" is a particularly strong endorsement.

Re: The solution to the housing crisis is extremely simple

#57

Post by TheCoelacanth »

Jtsummers wrote: post #41
TheCoelacanth wrote: post #40

Earlier quoted context omitted.

The number one way of earning money from idle land is just to wait for its value to increase. That doesn't apply to all land, but it does apply to all land in areas that have a housing affordability problem.

By this proposal, can you even make money off the sale of land? Wouldn't that, also, be taxed 100%?

Presumably yes, since the explicit purpose of this proposal is to prevent all profit from idle ownership of land.

Re: The solution to the housing crisis is extremely simple

#58

Post by fiter »

djrobstep wrote: post #46
fiter wrote: post #26

Earlier quoted context omitted.

Competition will not resolve the issue of taxes being passed on, because all properties will have an increased tax burden. The smallest tax/rent increase will go to those using the land relatively optimally (to be decided by tax surveyors).

Tenants are already "taxed" this amount. It just goes to the landholder, rather than the government.

I think your statement requires some justification. After a property has changed hands, the speculative value has gone away with the seller (who was a landholder but is no longer). The new landholder paid for the cash flow at market rates and so any significant additional cost (tax) would result in a loss. The new landholder will have to increase rents to make up the loss. This will be played out across the market.

Re: The solution to the housing crisis is extremely simple

#59

Post by fiter »

djrobstep wrote: post #46
fiter wrote: post #26

Earlier quoted context omitted.

Competition will not resolve the issue of taxes being passed on, because all properties will have an increased tax burden. The smallest tax/rent increase will go to those using the land relatively optimally (to be decided by tax surveyors).

Tenants are already "taxed" this amount. It just goes to the landholder, rather than the government.

I'd also like to suggest that a lot of the price increases in the SF bay area are related to difficulty developing new units. The intention of the land tax is to increase the usage (density) of valuable areas; however, that requires being able to develop! Development is very hard and risky in many parts of the SF bay area.

Re: The solution to the housing crisis is extremely simple

#60

Post by jacknews »

anovikov wrote: post #51
jacknews wrote: post #50

Earlier quoted context omitted.

Yes they could just live on the street. By "afford housing" I don't mean just buying, but also renting. Rent prices reflect sale prices.

Well, this again sounds like communism. No one is entitled to real estate. For that matter, there is a great amount of essentially free real estate in every country, a lot of it in good repair - just in the places where there are no jobs. That isn't even a thing - what's limited is a supply of real estate in places where everyone wants to be. No fiscal solution could fix San Francisco housing prices, only 'fix' would…

"No one is entitled to real estate."

Why not? We are born onto the earth, and yet under the current system it is already owned by someone else, and we have to slave to those owners just to "earn" a place to be. IMHO We are each entitled to a share of nature as a birthright, and a way to achieve that while still allowing "ownership" or exclusive access to land is to apply a 100% tax. Should one be able to own the air? Or the world's water? It's not far different to land ownership.

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