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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

#661

Post by bluGill »

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…

The little old ladies I know keep healthy in their garden. It is a gym program for them. Yes, they are slower than younger adults, but they are still active in that garden.

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

#662

Post by alistairSH »

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…

That can already occur with regular property tax. Some regions have "homesteader" tax relief programs to counteract the problem and I see no reason we couldn't do the same on a land value tax scheme.

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

#663

Post by Kinrany »

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.

The taxes can be delayed until the property is sold. This still disincentivises using land as investment but works fine for people who just don't want to move.

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

#664

Post by MrMan »

flagrant_taco wrote: post #488
lern_too_spel wrote: post #468

Earlier quoted context omitted.

Suburbs also bring in outside resources. The difference is that distributing those resources and collecting waste within the city is less costly than distributing resources and collecting waste within the suburb.

Suburbs may very well be the worst of both worlds, being more spread out but still not spread out enough to be fairly self sufficient.

[dead]

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

#665

Post by screye »

lmm wrote: post #320
bitshiftfaced wrote: post #190

Earlier quoted context omitted.

I don't love this idea, and I suspect many others wouldn't either. If you raised your family in a house and have lived there for decades, it has intangible value to you, but not others. Yet because of this value, you must pay potentially much much more than your neighbor, who objectively speaking may have a lot of equal value. What's more, even if you pay more than you ought to, you'll never feel secure in your home,…

I'm from the younger generation who's been economically forced to move every couple of years because the older generation made it too hard to build houses. So I'll shed few tears for boomers being forced to move once after 20 or 30 years.

House prices don't change at the drop of a hat. If gentle changes in taxation are too much for a person, they might just have purchased a house they couldn't afford in the first place.

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

#666

Post by nonethewiser »

pketh wrote: post #660
malta_kano wrote: post #595

Earlier quoted context omitted.

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.

What’s currently stopping people from developing them though? Detroit is a huge city and its population has largely vacated to the suburbs. Maybe they havent been developed because the current demand is already being met.

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

#667

Post by mrdrippy »

friend_and_foe wrote: post #205

Oh man, I was hoping that this would be one of those things where they tax land to encourage new building, but it's just another city hurting for revenue looking to squeeze it's population a little more. Not that it won't spur development. It will. But not as much as anyone hopes. They have to eliminate taxes on all improvements to the land and tax the land itself only. Also remove code and zoning restrictions on it.…

It only encourages new building for people who can afford to develop the land. It would likely discourage small time investors and further the concentration of corporate owned real estate.

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

#668

Post by bombcar »

LVTfan wrote: post #284
somethoughts wrote: post #160

Earlier quoted context omitted.

Agreed - the many counties in the US already have a portion of the property tax bill coming from a land value tax/Georgianism. California property tax bills have two components [1][2]: - structure/improvement assessed value - land value assessed value The land value component is re-accessed frequently and changes based on comparables (presumably but its mostly black box). The question is to what degree/portion of Geo…

As I understand it, what prompted Prop 13, aside from the desire to serve the owners of the best land, was that while land values were rising astronomically, municipalities and elected representatives were eager to serve their constituents, who naturally wanted all the amenities that their governments cared to offer. And the municipalities -- their local elected representatives -- complied. They didn't reduce the mil…

California is weird. Around here, the town/city decides what it wants to do, calculates the cost, and then allocates this cost to the residents based proportionally on land value.

Our land underwent a reassessment and the value was calculated as “more realistic” (50% more!) but our property taxes went down in absolute dollars because the budget was the same this year, but new houses have been built in the town.

California seems to collect money and then decide where it should go.

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

#669

Post by gyanreyer »

pketh wrote: post #660
malta_kano wrote: post #595

Earlier quoted context omitted.

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.

Yes, downtown Detroit is a wasteland of parking lots. Some incredibly beautiful old buildings have been demolished and turned into vacant lots, it's a real shame. Downtown really needs more development and I think this is a great way to force the issue. When I lived downtown, I had to drive 20 minutes to the suburbs for groceries. And now I have a house in the suburbs instead of Detroit because of that.

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

#670

Post by bombcar »

somethoughts wrote: post #399
LVTfan wrote: post #284

Earlier quoted context omitted.

As I understand it, what prompted Prop 13, aside from the desire to serve the owners of the best land, was that while land values were rising astronomically, municipalities and elected representatives were eager to serve their constituents, who naturally wanted all the amenities that their governments cared to offer. And the municipalities -- their local elected representatives -- complied. They didn't reduce the mil…

Agreed. I was primarily highlighting that California (and many states) tax code has components of LVT already and therefore have elements/influences of Georgism. It's just not purist Georgism. And even if LVT was the only source of tax income - it could be done at punitive level to prevent all land speculation or be more relaxed. I think somethings that I haven't seen addressed by pure Georgists: - Where to stick sch…

I think the general idea is that Georgism supports redevelopment instead of sprawl.

So the older residential suburb has become a denser urban city, and the new residential towers are supported by the schools having been rebuilt taller.

And for some value of “works” this does seem to be doable. Most land uses are stackable, though I’ve never personally seen a multi-story gas station.

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