Detroit wants to be the first big American city to tax land value

> This isn't going to change much about landlords. If anything, it will increase the amount of housing rented through landlords, because the land value tax will make it uneconomical for more people to own their own homes. In a high value area, the only people who would be able to do so are the very rich.

No. A land value tax doesn't make any difference at all to the ongoing cost of owning a given piece of land.

That's because land value taxes decrease the price of a piece of land (via market mechanisms), so that the sum of tax plus ongoing capital cost is the as before.

A simplified example: without LVT you might be able to buy a piece of land with a mortgage that costs $1000 per month. Afterwards, you can buy the same piece of land with a smaller mortgage of $200 dollar a month, but you are paying $800 in LVT.

If you own the land outright, you still have opportunity costs of capital. But it's easier to explain with a mortgage. Also, if you already own land then the introduction of an LVT will definitely put a one-off hit on your finances. (Unless the government compensates you.) But there's no long running impact.

You can pull on those heartstrings in either direction, as it were.

In economic terms what you're arguing is that investment efficiency should always outweigh allocative efficiency.

> pay [...] much more than your neighbor, who objectively speaking may have a lot of equal value.

All land is unique, so I don't think adjacent land of equal value exists. The difference may be trivial, or it may be substantial.

But yes, it's all a tradeoff. Some might prefer a centralized government authority decreeing a given value, others might prefer market-based price discovery.

I'm not trying to convince you or anyone else either way, just pointing out that fair price discovery for a self-assessment LVT isn't an unsolved problem.

This does not pass basic scrutiny unless the plan is to ruin average homeowners that valued their assets at fair market value.

Essentially, you want to force asset owners to write an at-the-money call option against their assets, and then adding insult to injury by not paying them an offsetting risk premium. I don't know how any moral person could be a proponent of the kinds of abuse and profitable exploitation of average people this proposal would trivially enable.

I come from Western Massachusetts, which is characterized by smaller populations and lower budgetary allocations. The most significant budget item in most municipalities here is education, followed by road maintenance, which is often extremely costly. In Massachusetts, the basic cost estimate for repaving a standard road is approximately $1 million per mile, and this investment typically only lasts about a decade before it requires another round of expensive repairs.

Bridges are even more financially burdensome. Recently, we replaced a culvert that was so small I could easily jump over it, and yet it set us back $700,000. Keep in mind; we're talking about a town with a population of around 1,000 people, and we have over 30 of these culverts and bridges scattered across our approximately 80 miles of road within a 55-square-mile area. If you're familiar with the region, you might even be able to pinpoint which town I'm referring to.

To add to the challenge, not only do we have to repave our roads every 7-10 years to prevent them from falling into disrepair, but we also have to maintain them for safety, plow them, and salt them for safe travel. Over the past three decades, the expectations for maintaining these infrastructures have significantly increased.

The problem lies in the way taxes are structured, which is based on the combined value of land and improvements (buildings). Particularly in smaller towns and cities, most people are trying to get the most affordable option. This approach encourages sprawl, resulting in substantial infrastructure construction and maintenance costs. In larger cities (unlike mine), the upkeep of water and sewer lines are another considerable addition.

In more suburban communities, we're witnessing the aging of infrastructure that was originally constructed during the early days of the automobile era. The cost of replacing this aging infrastructure is substantial, but growth expectations, which used to help fund these projects, are dwindling. Many people who moved a few miles outside the city center still expect the same level of services without understanding the financial implications. This situation places a significant strain on tax funds, leaving us with limited resources to invest in valuable critical community needs and values.

We now live in a small city in multi-unit building that has ~60 ft of road frontage, and is right in downtown. The building has 6 apartments so has considerable value. But our _infrastructure_ costs are tiny compared to those that live in suburbia. Why are we paying more taxes for helping the city be efficient?

MA GL says you have to tax everyone on their property value - so someone in a 250K house out in suburbia that costs the town huge amounts to maintain their roads, sewers and water, actually costs the town money -- while a downtown 6-unit $1.5M building next to others that use the same services, is a boon.

And what made that possible? The proliferation of the automobile.

We need our tax system to promote density - which means you can spend more tax money on things that matter.

(this has been edited in places by ChatGPT)

That’s a perfectly fine view for a person to have, but is definitely not what the economic concept of rent seeking is. What you’re talking about is essentially what Marx called “seizing the means of production”, and is the fundamental basis of Marxist economics. So if you wanted to be more clear with what you’re trying to say, I’d suggest you adjust your vocabulary a bit.