61–70 of 910 posts
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Sounds like a way to convert single family homes into multiplexes as population rises so everyone can be closer to amenities. I’m very for that, especially if the former owner could find a guaranteed way to get one of the units on their land so they can stay.
if
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I’ve heard economists champion the idea, but I’ve heard little talk about what the tradeoffs are. What are the downsides?
High levels of displacement and instability. The proponents of this I have met are generally wanting to use it force seniors with paid off homes out of them so they can live in them instead (or often build on them, as they are property developers). It also assumes that NIMBYism remains at the same level, which is challenging, as every new build or development nearby increases your own taxes. It would also encourage t…
In practice, land value taxes increase home ownership, so the actual displacement rate of a population might be the same or even less with LVT implemented.
> It would also encourage the childless to fight things like schools, as they would pay extra tax having them nearby.
Note that any existing property tax or council rates regime already theoretically has this effect too, but I don't really see this behaviour. It's a theoretical strategy that certain demographics could utilise, but not one that plays out in practice in any city I've ever seen.
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A land value tax, in theory, discourages the mere holding of unproductive land. Encouraging the land to go into the hands of people who will actually use it could, in theory, have some regenerative value to a declining city.
Where does the land go when no one buys it or pays taxes?
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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.
There's a Prop 13 style cap on property tax increases. It's the lesser of 5% or inflation. I'm not a fan of it, but it's not nearly as bad as Prop 13's low cap.
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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.
In other words, if California actually did kick out homeowners for their neighborhood getting too popular, it would have been much less of a disaster.
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I’ve heard economists champion the idea, but I’ve heard little talk about what the tradeoffs are. What are the downsides?
High levels of displacement and instability. The proponents of this I have met are generally wanting to use it force seniors with paid off homes out of them so they can live in them instead (or often build on them, as they are property developers). It also assumes that NIMBYism remains at the same level, which is challenging, as every new build or development nearby increases your own taxes. It would also encourage t…
This is the same as the existing tax system, where tax is proportional to (land value + buildings' value).
> High levels of displacement and instability.
Taxes would rise on undeveloped or underdeveloped properties, and fall on developed properties. The net effect would be an increase in total housing stock, as the relative cost of building and owning more units goes down.
> The proponents of this I have met are generally wanting to use it force seniors with paid off homes out of them so they can live in them instead (or often build on them, as they are property developers).
An LVT wouldn't have to work this way. The transition could be something like, set the LVT for each property the same as its current tax under the old system. But any future change in the value of buildings on the property don't affect its tax. This would mean seniors could continue paying the same tax they used to, while developers wouldn't get penalized for building more housing.
I'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?
I see it all the time. There is some office building with a weird looking residential unit on the top floor. The resident gets residual rent income together with the developer. New residents take advantage of increased supply of housing and commercial space. It is a win-win-win.
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Gentrification, which displaces renters (rents become too expensive for existing tenants so they need to leave the area), will start displacing some land owners as well. LVT would increase due to land value increasing, and the current land owners may not be able to afford the increased tax. If you don't allow deferment of the tax, pensioners might have to move unwillingly (low income that may not cover the tax). Most…
> Most proposals allow deferment for retirees until sale of the property, though, so it's kinda a non-issue. Ah more carve outs for boomers. I knew it had to be in there somewhere .
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I’ve heard economists champion the idea, but I’ve heard little talk about what the tradeoffs are. What are the downsides?
(I'm a big proponent of LVT) The two downsides I'm aware of are difficulty in transitioning to an LVT and difficulty in valuing the land. Transitioning to an LVT means that landowners no longer capture land rents for themselves, which is a massive overnight loss in the value they hold. The solutions there typically tax only the difference in land value versus a baseline assessment. So if a lot is worth $100 before LV…
This seems by _far_ the biggest difficulty, and I find it strange that this rarely comes up in LVT discussions. Even for nominally 'liquid' land it's not clear who values it or how.
I'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
I’ve heard economists champion the idea, but I’ve heard little talk about what the tradeoffs are. What are the downsides?
It doesn't make much sense for a modern service based economy. Your typical service sector worker, programmers, doctors, CEOs, would have essentially no taxes as long as they have a small geographic footprint.
Of course it sounds good to tech b