Detroit wants to be the first big American city to tax land value • Hacker News Board

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

#461

Post by eru » Tue, Oct 17, 2023, 4:00 AM UTC

lbwtaylor wrote: post #423

eru wrote: post #275

Earlier quoted context omitted.

> - There are deeper problems with valuing land. Land values in cities are directly related to approved zoning (i.e. what you are allowed to build), so the city government can rezone neighborhoods and unilaterally alter the land values the residents pay tax on. This may not agree with everyone's view of fairness. That's actually a feature, especially if you make sure that the authority who can do the zoning also gets…

>> That's actually a feature, especially if you make sure that the authority who can do the zoning also gets the revenue (or at least shares in it). That way aligns incentives. This is only a positive if your goal is to upzone everything. If you think cities should be a mix of zoning and zoning shouldn't be driven by tax considerations, then this is very negative, since the land management department has an incentive…

Well, I think zoning is mostly silly, and people should mostly be able to decide what they want to do with their property.

(Before zoning was a thing there were already nuisance laws that forbade opening heavy industry next to a Kindergarten. No zoning required.)

In any case, people don't build high rises in the middle of nowhere right now. They won't start (or at least not much more than under the status quo) if someone drops taxes on structures a bit.

Also keep in mind that people don't get spontaneously generated. If people cluster together to form a high density area, some other parts of the country will see lower density. Ie if you let all the people who bunch up together, bunch up together, there's more space left over for the people who prefer lower density.

> If I have a lot of green space and few structures, and we convert to LVT, I will be taxed proportionally higher than before, or than my neighbor with less land and more structures. By taxing me more you are dis-incentivising my approach.

What you are describing is purely an effect of whether you tax structures or not. It's completely independent of whether you tax the land value.

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

#462

Post by flagrant_taco » Tue, Oct 17, 2023, 4:00 AM UTC

gavinsyancey wrote: post #430

flagrant_taco wrote: post #416

Earlier quoted context omitted.

This argument has often confused me when so many people are concerned with global warming. Why should a city incentive land owners to develop and commoditize their land? If we want to reduce human impacts on the planet, why not incentive the opposite and incentive leaving the land natural? Land value taxes prioritize GDP and profit above all else. Isn't that how we got into this mess in the first place?

Generally, land is valuable (and therefore under this scheme highly taxed) because people want to live there. And if they can't live there, they'll live somewhere else, likely involving a longer commute that is worse for the environment.

Wanting to live somewhere and reducing climate impact are different though. If you build a city full of dense housing, where does all the food and water come from? Or the electricity, furniture, and clothing?

Costs can be externalized, but at the environment level they still exist even if outside the city of consumers. It's also often the case that externalizing those costs adds even more impact as the product has to be shipped in and the waste shipped back out.

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

#463

Post by bagels » Tue, Oct 17, 2023, 4:00 AM UTC

nemo44x wrote: post #439

bagels wrote: post #238

Can you legally relinquish ownership of a parcel to no longer have the tax burden of the empty land in a dying city?

Yes, you can abandon land if you no longer want it. You can do this for most property.

Are you sure? What is the actual process in Detroit where you give up the land and are no longer responsible for the taxes?

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

#464

Post by arrosenberg » Tue, Oct 17, 2023, 4:01 AM UTC

AmericanChopper wrote: post #187

harimau777 wrote: post #142

Earlier quoted context omitted.

You are already paying taxes, Land Value Taxes just seek to be a more efficient (since they try to target rent seeking rather than profitable labor) and more just (since they target land that the owner didn't create) form of taxation. So arguing that it's effectively the government stealing your property is only a valid argument if you are arguing that all taxation is theft. If that's what you believe then that's fin…

Property taxes and wealth taxes undermine property rights in ways that normal income taxes don’t. If I earn $100 and pay tax on it, whatever’s left over is mine forever, and I never have to pay tax on that income again. If I buy $100 worth of property, I have to pay tax on it again every year forever, which basically means I’m only buying the right to rent it from the government in perpetuity. Your use of the phrase…

> I’m only buying the right to rent it from the government in perpetuity.

You are paying maintenance in exchange for the right to exploit that land. Streets, power, water, sewage, fire, police, schools and libraries both cost money and increase the value of your land, so it makes sense to link the tax base to the value of the land since they should be strongly correlated.

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

#465

Post by xienze » Tue, Oct 17, 2023, 4:02 AM UTC

gnopgnip wrote: post #232

somethoughts wrote: post #160

Earlier quoted context omitted.

Agreed - the many counties in the US already have a portion of the property tax bill coming from a land value tax/Georgianism. California property tax bills have two components [1][2]: - structure/improvement assessed value - land value assessed value The land value component is re-accessed frequently and changes based on comparables (presumably but its mostly black box). The question is to what degree/portion of Geo…

The economy is not a zero sum game. If a land tax leads to increased economic activity it can actually result in a lower tax rate and generate more than enough tax to pay for the services the government provides.

Do you think this would actually happen in a place with as inefficient and corrupt local government as Detroit? Be honest.

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

#466

Post by bagels » Tue, Oct 17, 2023, 4:02 AM UTC

TapWaterBandit wrote: post #245

bagels wrote: post #238

Can you legally relinquish ownership of a parcel to no longer have the tax burden of the empty land in a dying city?

Interesting question. I think in this scenario there'd be a couple of options: 1. The land is worth a lot. If that is the case, you should be able to sell it reasonably easily. 2. The land is worth very little. In that case the tax would be insignificant because the land has so little value.

The proposal by Detroit here is to increase taxes on abandoned land. It's not binary, I'm sure some speculated parcels will not be viable to hold any longer if the taxes rise to the same price for built and unbuilt land.

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

#467

Post by arrosenberg » Tue, Oct 17, 2023, 4:06 AM UTC

Nathanba wrote: post #394

lmm wrote: post #365

Earlier quoted context omitted.

> right but if this is my only piece of land where I live on, I am "the people". I need to live somewhere, I have no choice. It's like asking a prisoner to pay weekly tax for the cell he lives on: He has no choice, he has to live in some cell. Instead tax it intelligently so that I'm exempt for my first and only house on a moderately sized piece of land. We all need to live somewhere bruh, you're not special. If you…

Can you calm down? I didn't say that I was special and I'm not your "bruh". The few super rich people who buy 100 million dollar properties in the middle of a city for personal use as their only home are not the problem. By all means, add a clause so the tax exemption only applies for land values below a threshold. In fact I already thought of this by writing "moderately sized". The solution is never to tax working p…

> The few super rich people who buy 100 million dollar properties in the middle of a city for personal use as their only home are not the problem.

What about all of the billionaires buying ridiculous properties in Manhattan as havens for their ill-gotten gains? If they aren't the problem, who is?

> The solution is never to tax working people even more just because they want to have a home.

Ok, so it's not the rich and it's not the working people. Who is the problem?

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

#468

Post by lern_too_spel » Tue, Oct 17, 2023, 4:07 AM UTC

flagrant_taco wrote: post #454

dionidium wrote: post #437

Earlier quoted context omitted.

Human beings have to live somewhere and gathering them together in a small urban footprint is better for the climate, not worse.

How do those small urban footprints survive though? They bring in outside resources, external zing the impact elsewhere and adding in the cost of transporting goods into and waste out of the urban centers. There isn't a magic answer to it, but simply saying dense areas use less footprint for shelter ignores all the other necessities and conveniences consumed by the people living there.

Suburbs also bring in outside resources. The difference is that distributing those resources and collecting waste within the city is less costly than distributing resources and collecting waste within the suburb.

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

#469

Post by eru » Tue, Oct 17, 2023, 4:08 AM UTC

somethoughts wrote: post #249

eru wrote: post #212

Earlier quoted context omitted.

Exceptions are a bad idea, and as bad ideas tend to go, popular with voters. Exempting by use, like primary homes or day cares, now means that the government is in the business of snooping on you to make sure that the primary home you declare is also your actual primary home. You also give well-off people with a bigger primary home (or owning a home at all instead of renting) a big tax break. Welfare for the well-off…

I generally agree with LVT/Georgianism in principal. However in reality its a difficult ask to have all people purchasing single family homes to be able to build a 40 year financial model/projection of a regions growth prospects when the buy a home. Or have them move away from their family and friends support network. I think Georgianism works best: - when there's expansive flat land and slow growth and no zoning/res…

> However in reality its a difficult ask to have all people purchasing single family homes to be able to build a 40 year financial model/projection of a regions growth prospects when the buy a home.

Georgism doesn't require that any more than the current system. In fact, for people who haven't already bought a home, the cost under a Georgist system are almost exactly the same as before:

The yearly outlay for owning a place is the same, because market forces will adjust land prices to make it so. The sum of cost of capital plus all taxes is roughly only dependent on demand / what recurring benefit you can derive from the land. Under LVT your mortgage will be smaller, but you have more taxes on the land.

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

#470

Post by lbwtaylor » Tue, Oct 17, 2023, 4:08 AM UTC

yumbaya wrote: post #391

balderdash wrote: post #236

Earlier quoted context omitted.

1) it increases the likelihood of forced sales by owners (think a pensioner having to sell their long time home because property taxes have increased unaffordably due to the gentrification of their neighborhood 2) best use of land in this scheme is solely based on economic productiveness, it doesn’t take into consideration environmental and quality of life factors (to name a few) - think of all the local institutions…

Conventional property taxes already cause tax foreclosures on homes. This was a big problem in Detroit, where structures were systematically overvalued, forcing a lot of people out of their homes. Land-only assessments are arguably much easier to pull off than land-plus-house assessments. LVT concentrates development efficiently. It would actually increase green space, since people wouldn’t have to develop sprawling…

>> It would actually increase green space

Not in valuable parts of cities it wouldn't. The direct effect of LVT is higher cost of land and lower cost of buildings, thus incentivising more building and less bare land/green space.