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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

#711

Post by lkbm »

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.

> 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.

Maximum value, not maximum density.

They may tend to be the same thing, but that's not necessarily the case.

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

#712

Post by delecti »

rgblambda wrote: post #685
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.

Wouldn't that effectively punish the owner for improving the property? A tax purely on the land has the same justification as a windfall tax. The value goes up or down independently of any action of the owner. i.e. They didn't do anything to deserve the increase in their wealth. The value comes from what the land is surrounded by.

The current situation can punish the owner for improving the property, because you pay based on the overall value of your house. A new roof and siding could make your home more valuable, increasing your tax. Land value tax would make your individual changes a non-factor.

It could instead leave you on the hook for increases in the desirability of the neighborhood which you have no say in. So it would mean that homeowners get screwed even harder if their neighborhood gets gentrified.

The steelman for it is that society should incentivize denser development of more desirable land, by disincentivizing maintaining sparse development of it.

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

#713

Post by QuarterReptile »

tzs wrote: post #182
unyttigfjelltol wrote: post #150

Earlier quoted context omitted.

They are loading the tax burden on the land rather than on structures. So, you can build the Taj Mahal or leave the lot a burned out wreck-- either way you pay the same tax. Many comments on the thread overstate what this is. I happen to think it's interesting, but for reasons unrelated to the article-- it's kinda goofy for the state to tax personal property that happens to be fixed to a location, like a fireplace, s…

What's the tax used for, though? In many places a large part of what property tax is for is things like roads, water, sewer, police, fire, and schools. For most of those how much money is needed for them depends a lot more on what is on the land than on the land itself. E.g., the amount of sewer capacity needed for a lot is proportional to the number of people who live on the lot. It thus seems sensible to have a tax…

Of your list, only police and schools are (probably) driven by people rather than land area. Fire stations are decided by distances to stations, which is why any actual fire sees enormous overkill response (finally a chance to use the toys!)

Surface streets are obviously proportional to land area. So are water and sewage infrastructure, and they're massively more expensive than streets. As others have pointed out, water treatment and supply are handled by usage charges.

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

#714

Post by [deleted] »

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.

[deleted]

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

#715

Post by inpdx »

vitus wrote: post #645
bluGill wrote: post #610

Earlier quoted context omitted.

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 bac…

How dare she live in a house she's been in her whole life when the government knows what's best!

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

#716

Post by dfxm12 »

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.

Don't threaten me with a good time :)

Cheekiness aside, you'll find the overlap of people who support both a land value tax and a wealth tax to almost be a circle.

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

#717

Post by MattGaiser »

jonhohle wrote: post #158
MattGaiser wrote: post #32

Earlier quoted context omitted.

In theory by encouraging more efficient use of land, i.e. denser building. So you make land more affordable by using less of it per person for apartments.

So tax incentives for land lords? We have more housing units per capita than any time in US history. Why do you think we need more?

Far fewer people are partnered, so that alone doesn't mean there is sufficient housing. Divorce/not marrying probably means we need 30% more bedrooms than previously required.

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

#718

Post by ethanbond »

dfxm12 wrote: post #716
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.

Don't threaten me with a good time :) Cheekiness aside, you'll find the overlap of people who support both a land value tax and a wealth tax to almost be a circle.

I don't think that's true. There's a reason many LVT'ers are called (and consider themselves) "single-taxers."

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

#719

Post by ethanbond »

msla wrote: post #694
bombcar wrote: post #620

Earlier quoted context omitted.

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.

So people will be paying a higher tax than they ought to be if they aren't trend-chasing the economy to always be engaging in that "best use" from year to year? That sounds perverse in itself, especially since an economy needs diversity to function, and if everyone is incentivized to chase a single thing per region you end up with overproduction of that and underproduction of everything else.

Is a city full of pet stores valuable?

I don't see why this would encourage economic homogenization.

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

#720

Post by xp84 »

e40 wrote: post #646
malta_kano wrote: post #595

Earlier quoted context omitted.

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.

And if I know the Bay Area, 47 people with pitchforks came to the community meeting where that development was being considered for approval, screaming about how “their neighborhood” was now being “overrun by gentrifiers,” right?
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