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

economist.com

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

#651

Post by ninkendo »

xienze wrote: post #647
jimnotgym wrote: post #546

Earlier quoted context omitted.

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.

Yeah... "not nice" doesn't really describe it. "Ruin" is the better word for the condition of a lot of the lots. Search for "Ruins of detroit" to get an idea of what we're talking about. (Although a lot of the image results will be focused on large buildings, there are plenty that show what the smaller lots look like.)

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

#652

Post by screye »

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…

It isn't an extra tax. It is a rebalancing tax. The rich have nothing to do with this.

It is purely about how much land you sit on and where. That's it.

> Basically you're asking for normal people to work, get raises forever

Nope, it mostly incentivizes real estate hoarders to start making productive use of there land. It allows normal people to buy houses because this system inventivizes the increase of supply.

> land they already own because the rich need to get richer, you should sell?

If your lad value tax increases enough to be unpayable, then your house has likely appreciated 3x+. This makes you one of the rich.

There are no new houses in the neighborhood so the normal person can't afford a house. With land value tax, you can sell the land, make bank, and allow access to greater housing through upzoning. The normal person benefits greatly.

Either housing is an investment or an essential commodity. It can't be both.

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

#653

Post by developer93 »

flagrant_taco wrote: post #462
gavinsyancey wrote: post #430

Earlier quoted context omitted.

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…

It's still more efficient for a single factory to fell 20 trees and produce 20 chairs than it is for 20 people to fell their own tree and produce their own chair. Not to mention one person can't specialise enough to produce everything to the same standard as someone who does the same thing all day long, or an automated process which is optimised to do that exact thing at scale.

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

#654

Post by asow92 »

asow92 wrote: post #157
phkahler wrote: post #121

Earlier quoted context omitted.

Because living in your home isn't a good enough use?

I think it's more like: "Hey vacant property owner downtown, we'd like this vacant property to be developed into apartments, shops, cafés, business, etc. But, you have no intention of improving this land or maybe you're waiting for a grant you'll never get. You're welcome to keep this land, but we're going to tax you at a rate that we as a municipality think this land should be worth" I don't about increasing taxes o…

This also fixes an issue that property owners in my own locale express, which is that they are nervous to improve a property in fear of its tax assessment increasing.

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

#655

Post by fullarr »

0xParlay wrote: post #641
fullarr wrote: post #637

Earlier quoted context omitted.

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.

Thank you sir

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

#656

Post by xienze »

Qwertious wrote: post #458
brianwawok wrote: post #206

Earlier quoted context omitted.

Detroit still has more houses than people wanting to live there.

How many of those houses are on the fringes, and how many are in the CBD? If there's a vacant plot next to the town hall then it doesn't really matter how many vacant houses are a 1-hour drive out, that town-hall adjacent plot is being wasted.

> How many of those houses are on the fringes, and how many are in the CBD?

Take a look for yourself[0]. This is just outside of the downtown area. Loads of vacant lots. This is theoretically prime real estate, and would be ripe for development. The problem is, it's the fucking hood and no one wants to live there. Detroit emptied out over the decades and those empty lots _used_ to be decaying crack houses. So several years ago Detroit had them leveled to reduce blight. Now they're whining that people are just "speculating" by sitting on the empty land. If there was even the slightest hint that developing this land made sense economically, someone would have done it by now. It's just too convenient to the downtown area. And yet, no one has. Perhaps there's more at play than just people trying to sit on empty land.

0: https://www.google.com/maps/place/Detroit,+MI/@42.3370378,-8...

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

#657

Post by MrMan »

flagrant_taco wrote: post #451
snapplebobapple wrote: post #441

Earlier quoted context omitted.

your first paragraph applies pretty much equally to taxing land+developments. Also, in the context of a city building to the maximum of the zoning is a good thing in nearly all instances because higher density means you need less land to provide shelter for the inhabitants and it's way, way easier to provide most services to higher density.

Property taxes that factor in existing improvements doesn't leave the owner as far behind chasing potential value that they are already being taxed for. When your tax burden is a factor of expected market value of the land plus permanent improvements they're taxing you on what you already have. When it's based on an expected optimal value of the lad they're taxing you on what *they* think your land *should* be worth…

[dead]

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

#658

Post by simonh »

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.

We already tax revenue and/or profits in various ways anyway.

If land is in a city, that gives it a high value and revenue earning potential due to no work or expenditure from the land owner, but ongoing costs to the taxpayer to provide the infrastructure and services that give it this value and potential. Roads, schools, hospitals, etc. these are very costly to the public but increase the value of nearby land.

The land value tax gives the owner an incentive to invest in improvements and get the maximum economic return on the land, and dissincentivising sitting on land in order to benefit 'for free' from it's improving value. So it's about making sure the public gets the maximum benefit from it's investments that improve the value of the land. Taxing improvements directly would have the opposite effect.

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

#659

Post by flenserboy »

bombcar wrote: post #620
pmontra wrote: post #613

Earlier quoted context omitted.

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.

The idea is that you tax the land only as if it was being used for best use - so that every property is encouraged to develop to maximum density. I suspect that in actual use it would end up having a small to no effect.

In actual use it would, in most cases, ensure that people would not, could not have long-term ownership of land passed down from generation to generation. There would be significant social downstream effects & likely upheaval caused by this, & that would be compounded by the deleterious results of forcing more & more people to live shoulder to shoulder in the name of that maximum density you mention. No system of taxation is going to be perfect, or even nearly so, but some significantly increase the likelihood of abuse & unintended consequences of bad ideas allowed to run wild. All this without the need for malicious or corrupt action on the part of those in charge of the system, though it strikes me that a system such as the one proposed here would treble the power of officials to strike at groups & ways of life with which they disagree.

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

#660

Post by pketh »

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?

Anecdotally, I live in corktown (a neighborhood right next to downtown), and while it’s overall a nice place to live and somewhat walkable. There are vacant lots everywhere. Some are totally fenced off and some used as free parking.

I’m new to town but everyone else tells me that the area has massively improved in the last 5 years. Those lots are wasted potential.

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