Detroit wants to be the first big American city to tax land value
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Re: Detroit wants to be the first big American city to tax land value
#32Since people can barely afford land and homes as it is, I’d love to hear how this will help make land more affordable or available.
In theory by encouraging more efficient use of land, i.e. denser building. So you make land more affordable by using less of it per person for apartments.
Re: Detroit wants to be the first big American city to tax land value
#33I'm a big proponent of Land Value Tax. In theory it is one of the healthiest forms of taxation since supply is fixed. It encourages efficient use of land and discourages owners from squatting on undeveloped land just to reap value from its location. https://en.wikipedia.org/wiki/Land_value_tax
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Re: Detroit wants to be the first big American city to tax land value
#34I'm a big proponent of Land Value Tax. In theory it is one of the healthiest forms of taxation since supply is fixed. It encourages efficient use of land and discourages owners from squatting on undeveloped land just to reap value from its location. https://en.wikipedia.org/wiki/Land_value_tax
So if your neighborhood gets popular you get kicked out? Sounds like a healthy policy. Have you ever thought more than 2 minutes about it?
You could provide exceptions for a primary residence where the increased taxes would be sufficiently burdensome on the owner's income. Doesn't have to be all or nothing.
Just don't do what Prop 13 did in California where they applied the property tax limit even to commercial property for some reason.
Re: Detroit wants to be the first big American city to tax land value
#35Since people can barely afford land and homes as it is, I’d love to hear how this will help make land more affordable or available.
The subtitle is pretty instructive:
> If you tax blight, will you get less of it?
I think the theory is that it will prevent “hoarding” by forcing land owners to make efficient use of their property, or sell it, thereby lowering the overall price. It creates a less favorable risk profile for speculative real estate. You buy land to do something useful with it, not to wait for the next market boom before you sell.
I think the problem it aims to solve stems from the fact that once you own enough of the land you essentially can charge whatever you want.
Re: Detroit wants to be the first big American city to tax land value
#36I'm a big proponent of Land Value Tax. In theory it is one of the healthiest forms of taxation since supply is fixed. It encourages efficient use of land and discourages owners from squatting on undeveloped land just to reap value from its location. https://en.wikipedia.org/wiki/Land_value_tax
So if your neighborhood gets popular you get kicked out? Sounds like a healthy policy. Have you ever thought more than 2 minutes about it?
Unfortunately that tends to already happen. Gentrification pushes populations out as rent and property taxes increase. I'm honestly not sure how this is different and it seems like this may, as you pointed out, make gentrification worse.
Re: Detroit wants to be the first big American city to tax land value
#37Pufff, Brazil does that since forever. By paying some tax over your land, basically your government is taking it from you every generation or two.
Roughly, 2% each year and in 50 years and it's gone.
Re: Detroit wants to be the first big American city to tax land value
#38I'm a big proponent of Land Value Tax. In theory it is one of the healthiest forms of taxation since supply is fixed. It encourages efficient use of land and discourages owners from squatting on undeveloped land just to reap value from its location. https://en.wikipedia.org/wiki/Land_value_tax
So if your neighborhood gets popular you get kicked out? Sounds like a healthy policy. Have you ever thought more than 2 minutes about it?
That is already how property tax works, except in California. I think most people agree that the California system is a disaster.
Re: Detroit wants to be the first big American city to tax land value
#39Perhaps someone who has thought about this more can explain how a 'land value tax' differs from existing property tax regimes that explicitly examine the value of improvements and the value of land...
This Detroit case is interesting because there are different rates of taxation on the land, but the difference in rate could also be obtained by increasing the land component of a parcel's value.
Re: Detroit wants to be the first big American city to tax land value
#40Earlier quoted context omitted.
I’ve heard economists champion the idea, but I’ve heard little talk about what the tradeoffs are. What are the downsides?
> Residents interested in adding vacant lots or side lots to their properties objected that those additions would have increased their tax bills as if there were a house on the added land, even if it was just an empty lot. From https://www.washingtonexaminer.com/the-short-life-of-pennsyl... .
That's an upside, not a downside.