Earlier quoted context omitted.
Nestle sells portable bottles. That's what differentiates their product from the tap.
They sell bottles filled with water, not everyone has access to tap water and Nestlé captures so much of a water source that locals don't have access to the freely available water that they did before. Are you not aware that fresh water from wells depletes sources? The water table is limited. You seem to be intentionally twisting the scenario in a disingenuous manner. Nestlé is selling water that was once free to a p…
Ask HN: Anyone else feels the commoditization of real estate is unethical?
661–670 of 764 posts
Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?
#662Earlier quoted context omitted.
We have plenty of land. When I moved to Manhattan, I was shocked to see how many apartment buildings that are only a couple floors tall and don't have elevators. I assumed every building in Midtown would be at least 50 floors and house thousands of people. Counting the office space, which is completely unnecessary when people can work from home, even the densest neighborhood of America's most populated city has tons…
There are many reasons why not every building in Manhattan is 50 storeys. The most obvious one is that each neighborhood's infrastructure imposes limits on the density of the block. Other considerations are public transit, water main, and school capacity. So the effective amount of "land" today, is closer to what exists today, relative to a block of residential 50-storey skyscrapers.
Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?
#663Earlier quoted context omitted.
"If the landlord has to pay 4x tax they will pass some (all) of that increase to the renter. Also, a 4x increase in tax != 4x increase in rent." How much of a tax gets passed along to the consumer is modeled in an introductory macroeconomics course. It depends upon the elasticity of supply and demand. A tax falls primarily on the side of the transaction with the lower elasticity, because they are less able to adapt b…
[Pardon me if I don't have a lot of respect for economists and their crackpot theories (remember 2008? What about the current inflation generated by printing money like there is no to more?)] There are at least two problems with your logic: if you take all the land you can make the claim about the elasticity of supply, but not all land is created equal. Location, infrastructure, usage all factor into this. Taking the…
To answer all your questions:
"If I buy a piece of the said land near a town and don't use it for anything I just pay the tax on it and effectively lose money, right?"
Yup. Don't do that.
"What if the city builds infra near my land that makes it effective now to develop? Should I pay more tax now?"
Yes, you should.
This is actually one of the biggest arguments for a LVT, and it has three angles. The first is moral - it's society that's building the schools/parks/transit/infra that made the land value go up, so it should be society that reaps the benefits. After all, the property owner didn't pay to build that subway stop, they just got lucky and got to free-ride off of public benefits. It makes sense that the returns for building public infrastructure go back to the public in the form of additional tax revenue, which they can use to fund maintenance and new infrastructure.
The second is the economic flip-side of this: an LVT provides an incentive to right-size the government. Without this economic feedback loop, there's no check on public-sector spending tax revenues in inefficient ways. Who cares whether a new transit stop benefits residents vs. provides a boondoggle to contractors, if the benefits to residents are all captured by landlords rather than either the residents or the government? But if further public funding is contingent upon raising rents and hence tax revenues within the city, the incentive is to spend money in ways that will actually make the city more desirable and justify those higher rents.
The third economic argument is on individual landlords and developers. An LVT discourages speculation - if you're sitting on that unimproved lot and not getting any revenue from it, you're still paying taxes and will eventually go broke. Your incentive is to sell it to a developer who will build more housing on it, so that more people can enjoy the public amenities that made the land valuable in the first place. Leading into your next question:
"Should I pay more tax in case of a rezoning if I could potentially build a house but I don't?"
Yes. That's how you ensure that land is fully utilized and people who need housing can get it.
"If I can buy and afford (ie have the capital) to hold land for the long term + I can see where new developments are going to take I will be incentivized to hoard land."
It's the opposite way around - you're disincentivized from hoarding land, because you have to pay taxes on the land that's not cash-flowing. You're incentivized to sell to the people who are actually going to build and buy those new developments.
"I can also make the case that it's undeveloped and I should pay less tax."
You can also make the case that the government should just give you money, but in both that and your example, you'd be wrong. Everybody pays the same land tax, based on the unimproved value of the land. A developer who built an 80-unit apartment complex on 2 acres might pay $200K/year; a speculator who sits on 2 acres of undeveloped land also pays $200K/year. The difference is that the developer might be pulling in $2M/year and making a profit of $1.8M/year, while the speculator is slowly going broke. That and the developer is providing housing for 80 families while the speculator is doing nothing useful.
Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?
#664Earlier quoted context omitted.
> If the rental price of the apartment is above that, they won't pay it and find another place. If there are no places they will go homeless. Since landlords are already charging for this value, an increase of taxes does not increase the rents. Nope. Sorry but that's not how it works. If the landlord has to pay 4x tax they will pass some (all) of that increase to the renter. Also, a 4x increase in tax != 4x increase…
> So, say the property is worth 1mil$, and you pay 1% tax. That's 10k. You charge 3k rent. The taxman makes the tax 4%, now you have to pay 40k. You decide to pass 30k to the renter. So now they pay 36k+30k rent per year. 4x tax, 2x rent. The price of the property is based on the return that the landlord can return. This should be obvious. If you increase the tax by 4x, the most likely result is the market value will…
Not really. This assumes it must remain a rental property.
What will happen is that this $1M property which was previously a rental now becomes a ~$1M property which is owner-occupied. The owner isn't going to take a 500K-750K loss just to keep it a rental.
Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?
#665Earlier quoted context omitted.
They sell bottles filled with water, not everyone has access to tap water and Nestlé captures so much of a water source that locals don't have access to the freely available water that they did before. Are you not aware that fresh water from wells depletes sources? The water table is limited. You seem to be intentionally twisting the scenario in a disingenuous manner. Nestlé is selling water that was once free to a p…
If they didn't have access to freely available water, it cannot be true that Nestle is selling water that was once free to the populace. Your assertions are contradictory.
Please quote my comment where I stated this.
I don't believe you have attempted to comprehend my statements, nor have you read the article I posted and are just making baseless assertions to be contradictory.
Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?
#666Any commodization of a necessary resource for living is inherently unethical. I know this isn't a popular opinion on HN, but I need you to think about this not as the property owner but as the tenant
So it would be more ethical to take the 4 unit building I live in and make it a single family home?
Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?
#667Any commodization of a necessary resource for living is inherently unethical. I know this isn't a popular opinion on HN, but I need you to think about this not as the property owner but as the tenant
You should probably think about how food gets to the plate before saying commoditization of necessary resources is unethical.
Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?
#668My gut feeling is "yes", and we hear more and more about Real Estate funds going to the residential market (they were dealing mostly with office and retail surfaces here before). It is kind of scary because it will accelerate a phenomenon. Commoditization will lead to the same thing, more money trying to buy a limited supply leading to a booming price.
However, recognizing that commoditization is a catalyst should not hide the fact that it is not the root of the problem. No one can promote demographic growth (globally or regionnaly), limit new dwellings and act as if booming prices are a surprise or the by product of greed. It is not, legal constraint has made construction a real pain but demand is growing.
To give a bit of nuance, on many markets rental yields has been collapsing has a consequences of this. Yes prices are climbing but rent are not. So yes, buying your home is a far away dream, but compared to the price of ownership rent have never been cheaper.
Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?
#669Earlier quoted context omitted.
Then by extension, homeless people have the most personal freedom of anyone. What kind of ridiculous argument is this?
I think yours is the ridiculous argument, how are homeless people relevant to this conversation?
But they have the least personal financial freedom, is my point.
Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?
#670Earlier quoted context omitted.
This is a noble savage error. Shelter was still a valued commodity and not guaranteed human right. Tribes fought over land, and dwellings required labor. They often had many people to a dwelling because of this specifically. If you wanted to build an igloo or adobe building today, the land is cheap as are the materials. No one is interested in doing this exactly because the conditions would be considered economic des…
> This is a noble savage error. You said that last time ( https://news.ycombinator.com/item?id=31224977 ) I promise I'm not fantasizing about magic elves. :) However, it's clear that Native American lifestyles were preferable to European-American lifestyles. Graeber and Wengrow in "The Dawn of Everything" quote at length a letter from Ben Franklin on the subject: > When an Indian Child has been brought up among us, t…
I have lived off the power, sewage, phone, and internet grid for 20 years. I have built cheap homesteads and expensive ones. I have spent days foraging pinion nuts and weeks bowhunting deer.
I like to think I have some sense of the luxuries afforded by modern living, and what it is like to go without them.
>Really the point I'm making isn't specific to the New World, it was common all over the world for people to build their own houses. In economic terms it wasn't very expensive to build a new dwelling.
My specific point is that it still isn't, if you are willing to put up with the quality of lodgings non-industrialized people and settlers had. You can buy a wooded plot of land and build a log cabin for free. You can buy a steel shed that Native Peoples would have marveled at for a ~$1k.
>A lot of places won't let you build and live in an igloo or adobe building today.
Not in down town SF or most urban centers. If you leave these behind, nobody is going hunt you down and arrest you for living off-grid in a backcountry hovel. People actually do this!
>I promise I'm not fantasizing about magic elves. :) However, it's clear that Native American lifestyles were preferable to European-American lifestyles
I think you are fantasizing about elves. There is a lot positive to be said about native lifestyles, and negative to be said about industrialized lifestyles. However, I think most of them boil down to cultural issues and materialism, not the fact that Indians had somehow a superior material wellbeing.
Even the homeless have many superior luxuries to natives. What they lack is in a different category entirely.