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

#641

Post by 0xParlay » Tue, Oct 17, 2023, 12:04 PM UTC

fullarr wrote: post #637

red_admiral wrote: post #597

Earlier quoted context omitted.

Georgist thinking, as far as I understand, is that taxing total property value disincentivises investment in a way that is worse for society overall. Empty land is just a subcase of that. That said, "everybody works but the vacant lot" is a Georgist slogan that has been seen on billboards before now: https://digitalcollections.nypl.org/items/510d47de-036a-a3d9...

I look forward to starving to death as I try to eat a luxury apartment complex

If you were hungry I’d show you compassion and feed you an empty parking lot.

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

#642

Post by diffeomorphism » Tue, Oct 17, 2023, 12:07 PM UTC

ajsnigrutin wrote: post #607

Double_a_92 wrote: post #601

Earlier quoted context omitted.

I don't understand how that needs a special tax though. Wouldn't the more obvious choice be to just tax all wealth/assets? E.g. where I live it's just assumed that all your assets produce a yield of 4% yearly, and that is taxed as regular income. Makes the tax declaration also a lot easier, since people don't have to list all exact dividends and profits they might have gotten from investments.

The problem is, what if it doesn't produce that much? What if it doesn't produce anything? Imagine someone buying a house somewhere cheap. Then some gentrification, a new microsoft campus built nearby, etc., and the price of the house jumps 10x+. You're on a fixed income, and your taxes are now higher then you can afford. If you have multiple houses, sure, tax the second, third, etc. one (evn though the taxes are the…

The 10x seems very unrealistic. But assuming that were the case, the taxes would be the least of your worries because things like supermarkets, electricity, phone, water, heating... would also go up heavily.

The more realistic picture is that grandma living alone in a rather large, old house, whose price, heating etc. went up quite drastically. That is already happening, in particular the heating part. Just have a look at Europe and the UK. The question then is, and I am not picking a side here, whether you spend public money so she can afford to stay in that large house or you make changes.

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

#643

Post by bombcar » Tue, Oct 17, 2023, 12:10 PM UTC

fsckboy wrote: post #545

Scaevolus wrote: post #174

Earlier quoted context omitted.

You're forgetting the critical 3rd component of California property tax bills: Prop 13.

Prop 13 has the opposite effect of what was intended. If you stay put and don't move, your property taxes won't go up much. So you can vote for all the govt spending you want: don't move and you won't have to pay for it. I'm not saying people are "getting away with" low taxes. I'm saying that people are "getting away with" high spending.

Prop 13’s biggest issue is it doesn’t apply to ONLY residential homestead land.

There’s no reason why commercial land should get the same benefits.

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

#644

Post by screye » Tue, Oct 17, 2023, 12:10 PM UTC

ajsnigrutin wrote: post #624

nisegami wrote: post #615

Earlier quoted context omitted.

One way you could look at it is that this person's inability to afford the land value tax signals that they are not making effective use of the land and that it would be in society's best interest if the land were to change hands to someone who could use it in a way that lets them afford the taxes on it.

You're looking at a persons home as an economic investment and not as a social thing. It's a home. Someone will live in that house. You just want to replace a poor grandma with someone who can pay more taxes, while the use of the land/house/apartment will stay the same, even with airbnb, someone will just use that apartment to sleep in. It's the society's best interest that people can afford places to live and not li…

Land value tax often goes hand in hand with lax zoning.

In your example, if the grandma's house went from 200k to a 1million, then she isn't poor anymore. She is very rich.

She doesn't have to leave the neighborhood. She can give her house away for redevelopment into a condo. Get the nice penthouse flat and a pretty penny on the same land. Now, she has enough liquidity to pay the land value tax, which is also lower per person because it's distributed over the whole condo.

This is happening in India right now. Apartments are redeveloped into towers. Old residents get 2x the floor space and decent relocation $$ for the construction period. No one is being kicked out of their house. Most people move to another spot within a 10 minutes walk from their home for 3 years and then come back when the building is done.

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

#645

Post by vitus » Tue, Oct 17, 2023, 12:10 PM UTC

bluGill wrote: post #610

malta_kano wrote: post #595

Earlier quoted context omitted.

Is that the problem though? Empty land held by speculators?

Not just empty land. The 'little old Lady' who lived happily in her small house for decades, while everything else developed bigger. At one time her house fit in, but now the rest of the block is bigger buildings worth a lot more. You decide if the above is good or bad.

I'm sure your intent was to express a hypothetical that this might not be a net good, but...

Something like 90% of boomers want to age in place (as opposed to moving in with family, or moving into some assisted living arrangement). This is a problem when that effectively locks up 40% of the housing stock.

Does this "little old lady" need a 1-acre lot for her gardening when she can barely walk to the end of it and back? Or could that lot be parceled up into 4 single-family homes, or dozens of apartment units?

Also: that small house will grow in value (along with the property taxes) until the value of the land almost entirely dominates. My parents are in one such situation -- anyone who would buy their house would assuredly tear it down to build something bigger.

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

#646

Post by e40 » Tue, Oct 17, 2023, 12:14 PM UTC

malta_kano wrote: post #595

red_admiral wrote: post #561

Earlier quoted context omitted.

Land value tax is an idea by Henry George - the guy who coined the phrase "the rent is too damn high". His idea is among other things that a property tax discourages investment - one way to make money as an investor is to hold a plot of empty land in a desirable city centre location, watch it go up in value, and neither pay tax on any development on it nor bother with messy things such as tenants. Taxing the land val…

Is that the problem though? Empty land held by speculators?

In Oakland at 51st and Broadway there was 1/2 a city block that was empty. For almost 40 years (probably more, it was derelict when I got there in in 1980). A few years ago someone built a 5 story apt building on the land.

It always seemed crazy to me that nothing was done on that very valuable corner for so long.

There are other examples.

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

#647

Post by xienze » Tue, Oct 17, 2023, 12:15 PM UTC

jimnotgym wrote: post #546

xienze wrote: post #455

Earlier quoted context omitted.

> LVT addresses property speculators that buy land to sit on it for 10 years and do nothing with it. Didn’t Detroit raze the lots in the first place, since they considered an empty lot to be better than one with a decaying house? I really doubt many of these lots will ever actually be developed to any reasonable extent, since they aren’t exactly in nice areas. And likewise I bet there won’t be many people dying to bu…

Some of the 'nicest' areas of UK cities are redevelopments of some of the worst areas. Just because they are not nice now does not stop them being nice later.

I think you might be underestimating just how bad parts of Detroit are.

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

#648

Post by moralestapia » Tue, Oct 17, 2023, 12:19 PM UTC

pmontra wrote: post #613

red_admiral wrote: post #561

Earlier quoted context omitted.

Land value tax is an idea by Henry George - the guy who coined the phrase "the rent is too damn high". His idea is among other things that a property tax discourages investment - one way to make money as an investor is to hold a plot of empty land in a desirable city centre location, watch it go up in value, and neither pay tax on any development on it nor bother with messy things such as tenants. Taxing the land val…

If you want to tax properties, why not taxing both the land and what is build upon it? And wardrobes, tables, books or computers (every year) but that's another story.

What a nightmare that would be! (unironically)

Thank God we are far from reaching that point.

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

#649

Post by developer93 » Tue, Oct 17, 2023, 12:19 PM UTC

oneshtein wrote: post #551

rrrrrrrrrrrryan wrote: post #544

Earlier quoted context omitted.

LVT doesn't encourage infinite development on all land - it encourages the efficient use of land. If you replaced property taxes with land value taxes and held revenue equal: For rural areas, not much would change. Land is cheap and taxes would remain low. For suburban areas, there would be a moderate shift in tax burden. People with homes on large plots of land would pay more; people with homes on smaller plots of l…

With %100 LVT, city will be owner of most land in 1 year. With 10% LVT - in 10 years. Value based tax means that value is transferred from owner to a new owner no matter what. Owner is just working for a new owner.

That applies to any kind of work currently also..

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

#650

Post by diffeomorphism » Tue, Oct 17, 2023, 12:19 PM UTC

Draiken wrote: post #627

nisegami wrote: post #615

Earlier quoted context omitted.

One way you could look at it is that this person's inability to afford the land value tax signals that they are not making effective use of the land and that it would be in society's best interest if the land were to change hands to someone who could use it in a way that lets them afford the taxes on it.

What? I must be misunderstanding your comment. Are we seriously saying that if someone can no longer afford tax on a land they already own because the rich need to get richer, you should sell? Basically you're asking for normal people to work, get raises forever and hope nothing crazy happens that can raise land value in their neighborhood in order to keep the land they already own. No, this is not in "society's best…

> Are we seriously saying that if someone can no longer afford tax on a land they already own because the rich need to get richer, you should sell?

devil's advocate: No, not because of the rich but because of the poor. Buying a house decades ago was very possible on an average single person's salary. Nowadays, even upper income range couples have large troubles financing a house. So the situation is that you have lots of old people living in houses that they could never, ever afford at today's prices. The claim (no comment on whether it is correct or not) is that this causes massive distortion and that this proposal would fix it (doubt it, but that is the discussion).

> What the f*.

That is not helpful for a discussion. There is a problem stated and a (probably bad) proposal to address it. Instead of just saying "f*", address the problem and make a different proposal.