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High property taxes are good

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Re: High property taxes are good

#591

Post by naasking »

imtringued wrote: post #416
naasking wrote: post #127

Earlier quoted context omitted.

I'm not clear on how land value taxes would incentivize the right kinds of units. For instance, would a land value tax incentivize the creation of tiny bachelor apartments, or larger apartments that families can use? We need incentives for both, and larger units are not very common these days.

It doesn't, the only thing it does is remove the tax per apartment which means building more apartments on the same lot becomes cheaper per apartment.

It doesn't what? Yes it becomes cheaper per apartment, but as I've explained elsewhere, you don't want an incentive for only one sized apartment because urban centers need a diverse set of living spaces suitable for families and bachelors alike. They all work in the city after all.

Re: High property taxes are good

#592

Post by tptacek »

naasking wrote: post #590
tptacek wrote: post #355

Earlier quoted context omitted.

No, they're not. Urban sprawl is the result of deficient density. People who want low density can commute. For any fixed population, decreasing density must, obviously, increase commute times and sprawl. This isn't complicated, though appeals to "return on investment" cloud the issue. Of course, part of the subtext of these discussions is that proponents of SFZ and owner-occupancy tend also to believe that their favo…

> No, they're not. Urban sprawl is the result of deficient density. That's one cause. The other cause that you seem to refuse to understand is creating the wrong kind of density . An urban centre full of 1 bedroom apartments is still going to create urban sprawl because families just can't live there, thus driving them out of the city centre even though they still work there. I just don't get why you refuse to unders…

Because it's not a real problem, but rather one you've invented, and in the real world we have the exact opposite problem, of huge swathes of desirable residential land all SFZ'd, so you can't even build town homes on a parcel.

Re: High property taxes are good

#593

Post by naasking »

tptacek wrote: post #592
naasking wrote: post #590

Earlier quoted context omitted.

> No, they're not. Urban sprawl is the result of deficient density. That's one cause. The other cause that you seem to refuse to understand is creating the wrong kind of density . An urban centre full of 1 bedroom apartments is still going to create urban sprawl because families just can't live there, thus driving them out of the city centre even though they still work there. I just don't get why you refuse to unders…

Because it's not a real problem, but rather one you've invented, and in the real world we have the exact opposite problem, of huge swathes of desirable residential land all SFZ'd, so you can't even build town homes on a parcel.

It's amazing you keep saying this when I've said multiple times now that I'm living in exactly that kind of city (a large North American city), and it's not the only one with this exact problem. But sure, keep ignoring the data for your simplistic solution.

Re: High property taxes are good

#594

Post by TimPC »

Retric wrote: post #576
TimPC wrote: post #568

Earlier quoted context omitted.

The business has maybe 30 spaces at $20/day. If we assume some people use hourly rates but most use daily lets say each parking space makes $25/day for $750/day. That works out to $273,750 before expenses. To get $1 million you’d need over 100 spaces which is quite a massive plot of land for the downtown core of a city.

~115 parking spaces can fit on a normal 1-acre paved, marked parking lot. You can double that when cars park in long rows at the cost of having attendants. You can unquestionably have smaller lots, but it’s hardly a massive plot of land.

1-acre is pretty massive for a plot of land in the downtown core of the city. It can fit an entire apartment complex. The sale value is extremely high so the $1 million in revenue isn’t that attractive given the cost of holding the land.

Re: High property taxes are good

#595

Post by brigandish »

mlyle wrote: post #577
brigandish wrote: post #570

Earlier quoted context omitted.

There are two kinds of improvements, those of the land itself (like a new road or a water pipe etc) and those like houses or businesses. LVT directly includes the former, as they would be included in anyone's assessment of value (whether that be a government assessor or the owner). However, the value of the land is also indirectly linked to the improvements like houses. If you make a piece of land more productive by…

I think you're missing my point. We're in a subthread where you floated the idea of a bidding-based scheme as a way to set LVT land values. If you set the tax rate by having owners bid a price they're bound to sell their property for... that's going to include improvements like dwellings, since the owner can't take their dwelling with them and doesn't want to just sell the property with their dwelling for the land va…

In Japan it's reasonably common for someone to own the land while someone else (e.g. a homeowner) owns the buildings on the land and has certain rights to live there that the landlord can't ignore (and hence can't just turf them out suddenly).

Flats in the UK are leasehold, which means you can buy (part of) a property and still not own the land.

It's entirely possible to separate the two.

Re: High property taxes are good

#596

Post by Retric »

TimPC wrote: post #594
Retric wrote: post #576

Earlier quoted context omitted.

~115 parking spaces can fit on a normal 1-acre paved, marked parking lot. You can double that when cars park in long rows at the cost of having attendants. You can unquestionably have smaller lots, but it’s hardly a massive plot of land.

1-acre is pretty massive for a plot of land in the downtown core of the city. It can fit an entire apartment complex. The sale value is extremely high so the $1 million in revenue isn’t that attractive given the cost of holding the land.

I mean there’s a reason we build buildings, that’s hardly in doubt. The point was simply that even seemingly undeveloped land in or near the urban core can be generating a respectable income stream and then after N years the land has also appreciated. This is especially appealing in the event of a presumably short term glut of residential and or commercial properties/zoning issues.

Also, an acre with parking attendants doubles the number of cars so they could be clearing close to 2 million before expenses, and attendants aren’t that expensive.

Re: High property taxes are good

#597

Post by mlyle »

brigandish wrote: post #595
mlyle wrote: post #577

Earlier quoted context omitted.

I think you're missing my point. We're in a subthread where you floated the idea of a bidding-based scheme as a way to set LVT land values. If you set the tax rate by having owners bid a price they're bound to sell their property for... that's going to include improvements like dwellings, since the owner can't take their dwelling with them and doesn't want to just sell the property with their dwelling for the land va…

In Japan it's reasonably common for someone to own the land while someone else (e.g. a homeowner) owns the buildings on the land and has certain rights to live there that the landlord can't ignore (and hence can't just turf them out suddenly). Flats in the UK are leasehold, which means you can buy (part of) a property and still not own the land. It's entirely possible to separate the two.

It's possible to separate the two, but not in a way that gives a meaningful true market value for land alone in the short term-- rather just values for land in long-term option value after other rights are considered.

That is, that leaseholder you can't turf is enjoying a lot of the value of the land, and it may not be correlated to past payments or transactions.

In turn, lots of the benefits of a LVT evaporate if the taxable value (of landowner's eventual rights) is so decorrelated from the present value of land uses.

That's the problem here: valuing the land alone is hard. Separating rights, adding more owners and options and preferences --- doesn't make valuing the land alone easier.

Re: High property taxes are good

#598

Post by lmm »

conductr wrote: post #554
lmm wrote: post #533

Earlier quoted context omitted.

> It was established most likely when the entire city was raw land and undeveloped; so it served as a plan for development. There was no NIMBY because people were building their BY. Because there was a plan, you could decide where you wanted to build that BY. That's not really true. Zoning was usually set up later. Often the existing buildings wouldn't be permitted by the zoning rules but were "grandfathered in". (If…

>That's not really true. Zoning was usually set up later. Often the existing buildings wouldn't be permitted by the zoning rules but were "grandfathered in". (If we made this practice illegal and insisted that you have to demolish anything that doesn't fit the new zoning laws, that might be one way to keep zoning laws sane). Even if the final state of those people's buildings is legal, often the process by which they…

> I'm no expert but think it just wasn't as formal as we current have it. But informally it still roughly matches how we currently do it (residential areas, commercial area, industrial areas, etc).

There's a huge difference between a "residential area" and an area where it's literally illegal to build anything except houses and parking lots. It's not a case of just formalising what already existed, when you make the bodegas and offices and light workshops illegal you turn it from a residential neighbourhood into a soulless dormitory.

> Are we out of land in the US? (I'm assuming you're in US). Why do you need that specific piece of land that the person you are displacing already owns? Job/commute, convenience, etc are unacceptable answers in my book. Employers can and should be dispersing, you're likely broadly employable and could find work elsewhere. They could put their office elsewhere. But you're choosing to live in an area that you can't afford to own (and they're choosing to office out of a location that their employees can't live in). Ignoring those or pushing them on the current land owners makes no sense.

(I'm actually not in the US, but HN being HN I pretty much have to comment from a US perspective).

Agglomeration has huge benefits, that's why we have towns and cities in the first place. The current landowners almost certainly moved to somewhere that was previously less dense and made it more dense by moving there, no doubt chainging the character of the place in the process, so I don't think it's fair for them to complain about the next generation doing the same thing.

And if I tried to start my own new city in the middle of nowhere the exact same thing would happen: the first group of people move in, the city (maybe more like a small town to start with) becomes a pleasant place to live with jobs available, more people want to move in, but now there's enough people living there to NIMBY-block any density increase. If we tried to set a schedule at the start where we'd gradually densify the zoning? San Francisco already has a law like that on the books, they just ignore it.

> Curious if you have any evidence that rents are not market driven?

Zoning is a huge market distortion. It's essentially illegal to build anything in SF (over half the homes in San Francisco would be illegal to build today), and don't get me started on artificially low property taxes. So the rents are "market driven" in the sense of supply/demand, but that supply is being artificially choked off.

> I happen to believe you are more in control of the entire situation than you care to admit but would rather stay put and blame the boomers or change the rules because you don't like the cards you were dealt.

I mean sure, I can choose to live somewhere worse and commute for longer or take a worse job, while the boomer lounges about on my tax dime. But the fundamental injustice is very real.

> The "shed no tears" thing goes both ways, but they did get there first and they do already own their house, so it's an uphill battle for you.

They've created a de facto rotten borough by pricing everyone else out. But when democracy stops working the issues don't go away, people just find more direct ways to express them.

Re: High property taxes are good

#599

Post by lmm »

naasking wrote: post #589
lmm wrote: post #531

Earlier quoted context omitted.

The LVT is meant to stay neutral and let the market figure it out. That would probably mean more density compared to today (where lots of traditional houses take up massive amounts of space while paying artificially low tax), but if people are willing to pay a fair price for a big place then that's what will get built.

What "let the market figure it out" with LVT means is what I'm asking about. As I've explained elsewhere, if that means packing as many tiny units together in an urban core rather than a mix of bachelor pads and family-suitable living spaces, than that drives families out of urban centers and encourages urban sprawl, which creates terrible commutes and traffic and all subsequent problems.

> What "let the market figure it out" with LVT means is what I'm asking about.

Part of the point is to very deliberately say: we don't know, we'll let each neighbourhood build what works for that neighbourhood rather than trying to figure out ahead of time.

> As I've explained elsewhere, if that means packing as many tiny units together in an urban core rather than a mix of bachelor pads and family-suitable living spaces, than that drives families out of urban centers and encourages urban sprawl, which creates terrible commutes and traffic and all subsequent problems.

How do you figure that? For a fixed population, the larger the proportion of workers in the center, the shorter the average commute and the less bad the traffic. So 4 bachelors in the urban core and 1 family in the suburbs is much better than vice versa.

(Now of course what tends to happen is if you make the city better then you attract a bigger population. But that shouldn't be seen as a failure. Fixing traffic or commute times is essentially impossible, because as soon as you add capacity more people will move to the area or commute from further away. But what you can do is, for a given sane commute time, maximise the number of people and jobs within that range)

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