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NIMBYs in the twenty-first century

economist.com

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Re: NIMBYs in the twenty-first century

#51

Post by whomonk »

Symmetry wrote: post #46
ForHackernews wrote: post #21

Earlier quoted context omitted.

Arguably, we should be taxing based on the value of only the land itself, and not considering improvements (buildings, etc.) made to the land, in order to not (mildly) disincentivize making improvements to land one owns.

The problem is that a large fraction of our land value is in cities and most of them have zoning restrictions that don't match classic notions of owning land. It's easy for otherwise identical pieces of land in the same neighborhood to differ in price by a factor of ten depending on whether it comes with the right to build a house on it. Well, I suppose that means that the land tax just has to incorporate different g…

You are right that assessments are based on the highest and best allowable use, but actually land assessments are the easiest part. Pennsylvanian mayors are on record that assessment challenges (both technical and legal) almost completely evaporate from shifting from buildings to land.

Re: NIMBYs in the twenty-first century

#52

Post by pzxc »

enraged_camel wrote: post #44
psaintla wrote: post #11

Earlier quoted context omitted.

Yes, which is always why I always cringe when I see how many people in their 20s and 30s believe that home ownership is a bad idea. The willingness to rent for life in order to live a high density, urban lifestyle is going to come back to haunt them when they get older. It's good for me as a landlord but I hope people my age start rethinking their position on home ownership.

I don't rent for the urban lifestyle. I rent because it gives me tremendous flexibility when it comes to where to work. If I bought a house somewhere, I would be stuck in that place for close to ten years. Sure I could do remote work, but that is still not as common-place as regular in-office work, so I would be shooting myself in the foot in terms of job prospects and therefore earning potential. Home ownership was…

Not to nitpick but the distinction is important: "at-will employment" is what means your employer can fire you at any time for any reason (or no reason), "right to work" refers to the idea that in some states unions cannot force non-union members to pay fair share fees.

Re: NIMBYs in the twenty-first century

#53

Post by dragonwriter »

nwah1 wrote: post #47
icebraining wrote: post #45

Earlier quoted context omitted.

David Ricardo didn't live to see cars and two hour commutes.

Are these not factored into what the market will bear? Do areas with shorter commutes have different land values than areas with longer commutes?

They are factored into what the market will bear the same way that they are in any market, whether it is monopolized or competitive.

But if there were a monopolized market, changes in price differentials between different areas wouldn't result in changes in patterns of where people choose to rent, but empirically we do see price changes driving decisions as to where people live, including renters. There are constraints, and the market for housing isn't perfectly fluid, but its simply not the case that real property rental -- whether for residential or commercial/industrial uses -- shows the behavior of a market where land owners have monopoly/market/pricing power.

This may well have been different in late 18th to early 19th Century Britain when Ricardo and Smith were writing; availability of better means of transport for people and goods (particularly perishables) means that while location is important to the value of land, there's a wider area over which land can be substituted for other land for the same use, so any particular owner is less able to exercise market power, because price changes can be (and are) met with substitution.

Re: NIMBYs in the twenty-first century

#54

Post by onnoonno »

tomjen3 wrote: post #38
sun_machine wrote: post #13

I am confused by the way the Economist phrased Mr. Rognlie's argument. The crux of Piketty's argument is that when global returns on wealth (r) is more than global economy growth (g), capital will start snowballing into the hands of the few very quickly. The mechanism of r getting bigger than g is not an increase in r, but a decrease in g. The increase of the global economy is dominated not by increasing technologica…

You seem to be under the assumption that the population is going to grow towards infinity. The UN projects that we will stay under 10 billion ( http://en.wikipedia.org/wiki/Projections_of_population_growt... ) and even the highest only have us at 16 billion at the end of this century (compare that to the growth in the 20th century). So unless there is a relatively low limit for total humans on this planet, we won't r…

> So unless there is a relatively low limit for total humans on this planet, we won't reach it before we become a spacefaring race, at which point the limit will be the carrying capacity of the Universe.

But even in that case, you can only have at most polynomial growth (human habitat spherically expanding with speed of light) instead of an exponential one.

Re: NIMBYs in the twenty-first century

#55

Post by nwah1 »

dragonwriter wrote: post #53
nwah1 wrote: post #47

Earlier quoted context omitted.

Are these not factored into what the market will bear? Do areas with shorter commutes have different land values than areas with longer commutes?

They are factored into what the market will bear the same way that they are in any market, whether it is monopolized or competitive. But if there were a monopolized market, changes in price differentials between different areas wouldn't result in changes in patterns of where people choose to rent, but empirically we do see price changes driving decisions as to where people live, including renters. There are constrain…

But the places that you are substituting for, assuming the landlords there are self-interested, would also wish to charge the full rental value for their land.

The rental value they can charge is determined by the general level of income that can be had at that location compared to the best available rent-free location.

Since we don't really have much rent-free locations, land rents can go very very high. Even in the regions people are commuting from. Why do you think rents in Oakland are so high, despite the commuting required to get to San Francisco?

Re: NIMBYs in the twenty-first century

#56

Post by dragonwriter »

nwah1 wrote: post #55
dragonwriter wrote: post #53

Earlier quoted context omitted.

They are factored into what the market will bear the same way that they are in any market, whether it is monopolized or competitive. But if there were a monopolized market, changes in price differentials between different areas wouldn't result in changes in patterns of where people choose to rent, but empirically we do see price changes driving decisions as to where people live, including renters. There are constrain…

But the places that you are substituting for, assuming the landlords there are self-interested, would also wish to charge the full rental value for their land. The rental value they can charge is determined by the general level of income that can be had at that location compared to the best available rent-free location. Since we don't really have much rent-free locations, land rents can go very very high. Even in the…

> But the places that you are substituting for, assuming the landlords there are self-interested, would also wish to charge the full rental value for their land.

Of course they do. But land doesn't have an inherent full rental value, it has a value for particular uses. If land in place A that is used for use X becomes more expensive because the landlord is trying to rent it for more than the minimum price to meet his economic costs with no economic profit, land in place B whose highest-value use was the less-valuable use Y (given that land A was already being used for X, driving the marginal value of additional X down below the marginal value of additional Y), might become viable for X at a price greater than it was already able to charge for use Y, but lower than A was trying to charge.

This potential for substitution is what distinguishes a competitive market from a monopolistic one. Now, substitutability of land is sharply limited when transport costs are high relative to the value of the things provided by the uses of the land, which was true to a greater extent when Ricardo and Smith were writing than it is today (and, given geography, is -- even with similar technology -- often going to be true more on average in Britain than in the US.)

In land rents as in most other markets, taxes on the supplier (the owner offering the land for rent) -- like other costs -- are in part passed on to the consumer, and in part born by the supplier, reducing the quantity supplied at any given price and increasing, all other things being equal, the market clearing price. Land rent is, in practice, not fully monopolized so that taxes on it only reduce monopoly rents (and even if it was fully monopolized, this would only be the case if the taxes were less than the premium taken as monopoly rents for the property where the least premium was able to be charged.)

Re: NIMBYs in the twenty-first century

#57

Post by xaqfox »

_delirium wrote: post #31
matwood wrote: post #19

Earlier quoted context omitted.

Who isn't paying taxes on their land value? Maybe there are some states that do not, but every year I pay a pretty large tax bill based on the value of my land/house.

One way it happens: In much of the U.S., agricultural land is either exempted, or taxed at a very low rate. The stated rationale (besides openly being an agriculture subsidy) is as a kind of anti-gentrification measure for farmers. Farmers complain that rising land values, due to e.g. expanding cities, would "price them out" if they had to pay taxes on the full (non-agricultural) market value of the land. In practice…

This loophole was closed in Texas....right around the time that Nolan Ryan brand beef started appearing in the grocery stores.

Re: NIMBYs in the twenty-first century

#58

Post by mixmastamyk »

nwah1 wrote: post #43
mixmastamyk wrote: post #33

Earlier quoted context omitted.

This sounds like Henry George, a guy I never heard about in school, but had some quite interesting ideas. http://en.wikipedia.org/wiki/Henry_George http://en.wikipedia.org/wiki/Georgism ... in short capitalism for work, but collective use of land to recognize its unique ability in compounding inequity.

Good spot. One small nitpick. Georgists would contend that they do not support collectivized land, but rather support "common" rights to land. http://geolib.com/sullivan.dan/commonrights.html

IC... the article makes the distinction, I think, where common is that any individual can decide to use land to the extent not interfering with others, where collective requires the majority to decide. Is that correct?

Re: NIMBYs in the twenty-first century

#59

Post by bryanlarsen »

_delirium wrote: post #31
matwood wrote: post #19

Earlier quoted context omitted.

Who isn't paying taxes on their land value? Maybe there are some states that do not, but every year I pay a pretty large tax bill based on the value of my land/house.

One way it happens: In much of the U.S., agricultural land is either exempted, or taxed at a very low rate. The stated rationale (besides openly being an agriculture subsidy) is as a kind of anti-gentrification measure for farmers. Farmers complain that rising land values, due to e.g. expanding cities, would "price them out" if they had to pay taxes on the full (non-agricultural) market value of the land. In practice…

This is really only a problem for land close to cities. Outside of the cities, agricultural land is taxed at appropriate rates. To be more specific, both a house in the city and 100 acres of agricultural land in the boonies are worth roughly a quarter of a million dollars and pay roughly the same amount of land taxes.

Re: NIMBYs in the twenty-first century

#60

Post by s73v3r »

psaintla wrote: post #11
pcarolan wrote: post #3

Conventional wisdom says that homes are bad investments compared to equities, conventional wisdom looks to be wrong. Maybe loading up your 401k instead of buying a home isn't such a good idea. The right answer is probably to rebalance a bit towards property.

Yes, which is always why I always cringe when I see how many people in their 20s and 30s believe that home ownership is a bad idea. The willingness to rent for life in order to live a high density, urban lifestyle is going to come back to haunt them when they get older. It's good for me as a landlord but I hope people my age start rethinking their position on home ownership.

I can't afford a home in the place I want to live. I'm not going to live somewhere I don't like simply to own a home.
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