If the government spent the money it spends subsidizing rents on subsidizing construction then the problem would be solved.
The intent of low income housing is laudable, but the execution causes more problems than it solves.
The government forces everyone to write cheques to car owners. (Even the car owners themselves, of course. It's a tragedy of the commons; like eg communal charging for electricity in a whole city.)
Now, we mostly see the demand for parking at zero [#] marginal cost to the parker, not the demand for parking at its true cost---because the costs are shared by society.
The short term demand for parking is relatively inelastic---so right after introducing pervasive charging for curbside parking and dropping minimum parking requirements for new developments, we will see roughly the same number of cars parked. (That's where your dependency comes in.)
In the longer term, demand for parking is more elastic. (One can see a similar relationship between oil price and demand for gas guzzling cars: inelastic / path dependent in the short run. More elastic with enough time.)
This holds even without public transport at all. Public transport is just one of the things that can serve as an (imperfect) substitute for private car rides. There are other ones, like car sharing, choosing job/home combinations that are closer to each other, telecommuting, home delivery of groceries, buying groceries in bulk, etc.
(To take one example right now, people already prefer to work closer to home, and make trade-offs all the time when considering a home or a job. The point of indifference between eg home price/salary and commute length will shift. Full disclosure: I hate commuting myself and have decided to fork out the money to live very close to the office.)
All the people in the market are probably much cleverer than me in coming up with substitutes. The price mechanism can guide them.
Some of these substitutes can and are provided by the private market. Public transport is generally not. Though eg Britain has privatised train companies.
Add in as another complication that without careful regulation, lots of public transport options are natural monopolies. One attempt to blunt this effect is by careful separation: eg run the rail network as a heavily regulated, public utility and make private companies bid for the right to run trains on it and for slots at the stations etc. And be very careful to specify that apart from meeting some minimum standards, the height of the bid alone determines the winner of the auction---politicians like beauty contests, because it gives them power to meddle.
See https://en.wikipedia.org/wiki/Privatisation_of_British_Rail for some lessons. Germany faces similar problems in eg their electrical power market.
Since I'm already on a tangent: the American freight train market and its history are another interesting piece to learn from. (It's doing pretty well, mostly because they don't have many passenger trains clogging up the network like in Europe, and the new regulatory environment of the Staggers Rail Act (https://en.wikipedia.org/wiki/Staggers_Rail_Act) seems to have worked out reasonably well. (They called it `deregulation', but that almost never happens---it's just a different form of regulation.)
[#] Zero in terms of dollars plus the effort and hassle of congestion and cruising for parking.
I'm not sure you're going to like the market price of parking. If a parking space is 25% of the size of a $3000/month apartment then the market price of a parking space should be something like $1/hour, which isn't that high. And which puts it right in the hard spot where people subsidizing the price down to zero may actually make sense.
If all you care about is maximizing the revenue from parking spaces then you can set a price like that, but having a price at all discourages people from using parking spaces that you've already paid to construct whether you use them or not. And if you don't use them then the local shops lose customer traffic. So the local shop owner does the math and says hey, if there was free parking here I would get an extra $20,000 profit from more customer traffic, so I should go lobby the city to have free parking even if it means my taxes will be $10,000 higher.
Then their customers realize that if parking was paid for through taxes rather than at the meter the local businesses would be paying part of it instead of the customers paying all of it, so they would be paying less, and paying at the meter is more stressful than paying via taxes anyway.
Then the government realizes that to get the money from taxes they only have to put a slightly higher tax rate on the tax forms but to get it from parking they need meters and credit card processing computers and customer service and parking wardens and dispute resolution systems and the whole works.
So the vote comes up and 90% of everybody votes for free parking because the lack of free parking would collectively cost them more in money and grief than it costs to provide free parking.
The way out of this is to make the alternative to cars (or parking) more attractive, without making cars less attractive. Because people are going to fight you and win if you try to make cars less attractive without immediately replacing them with something which is at least as good.
That pricing will not discourage too many people directly---because you price it exactly at a point where not too many people are discouraged. (That point might have to be adjusted over time.)
Like a congestion charge, you shift from people bidding with their willingness to sit in traffic and endure queues, to people bidding with their chequebook. (Interestingly, your mix of parkers would shift towards more people who value their time more than their money. Affluent customers are good customers!)
Congestion charges worked out well for Singapore and London.
Politically, it's a good idea to hand out the fees from parking at the same level as the people who can decide about it. So if local opposition could derail the scheme, you have to hand out the proceeds very locally. Otherwise you get the political dynamics you describe.
Charging for parking is relatively easy and does not require high-tech. For example Singapore uses a scheme (amongst others) where you buy a bunch of perforated cards. When you want to park, you take a card and push out the appropriate chads to indicate the date and time of day and display the card in your car's window. Each card is valid for an half-hour slot. You can punch out multiple cards with consecutive slots. Each card can only be used once (obviously).
(If you want a crud variable pricing, you can require people to display multiple simultaneous cards for peak hours.)
I have also seen a system where you send a premium SMS with your licence plate number to pay.
Except that you're admitting to discouraging 15% of the customers. If there isn't enough parking for everyone then the shops much prefer people to be cruising around so that as soon as a space opens up there is someone to take it, rather than not showing up in the first place because they can't afford parking.
> (Interestingly, your mix of parkers would shift towards more people who value their time more than their money. Affluent customers are good customers!)
You can't actually make more money strictly by losing profitable customers, even if the customers you lose are below average customers.
> Like a congestion charge
It is like a congestion charge, which have exactly the same problems.
> Congestion charges worked out well for Singapore and London.
They keep poor people off the roads so rich people can use them, anyway.
> Charging for parking is relatively easy and does not require high-tech.
People don't use the high-tech stuff because it's harder. Either way you need something vs. the alternative where you don't need anything.
> Politically, it's a good idea to hand out the fees from parking at the same level as the people who can decide about it. So if local opposition could derail the scheme, you have to hand out the proceeds very locally. Otherwise you get the political dynamics you describe.
The problem is there are no "proceeds" -- the money is going to come from the local residents whether it's parking fees or taxes. The only way you can save anything is to have fewer parking spaces, which nobody is going to allow until after there is already a better alternative in place.
> subsidizing construction If you mean state owned properties. I agree on that. Having low rent housing competing in the market bring prices down. But the number should be significant enough. Otherwise it just becomes a lottery where a few win but has not broader impact in the market.
Not if you publicly announce your intentions ahead of time. Then people have no incentive to do that because the expectation will be for housing prices to decline and the investment to lose value.
> If you mean state owned properties.
I mean giving subsidies to builders who create new market rate housing. Although another major problem is zoning regulations that prevent new housing from being constructed regardless of financing.
If it was levied on the value of the land alone, there's no such thing as unreasonably punitive: land values would just drop until the tax is priced in.
If you look purely at economic efficiency, and leave out any morals about _who_ should be taxed, the only thing keeping taxes from going up all the way to taking everything is economic inefficiency. Ie if you heavily tax a particular widget, people will produce fewer widgets.
Land is fixed. You can't produce it, thus no tax can interfere with its supply. (Unless it's a tax system that incentives you to keep your land off the market, like negative gearing in Australia (https://en.wikipedia.org/wiki/Negative_gearing).)
However, if the tax was levied on the value of land plus building on it, a high tax would discourage building houses---whose supply is emphatically not fixed.
I really like this idea, except that "market value" is vague, and would require a bit of work to determine accurately. Maybe the best you could do would be to have a by-block square footage to value chart to be used for these purposes (and you would want a definitive source anyways, to prevent gaming the market value side).
This could also help quite a bit with the property owned in New York as a way to launder money[1].
1: http://www.npr.org/sections/money/2016/05/27/479717380/episo...
Ie you probably would want to tax under-occupation as well. (Otherwise you just declare a bunch of apartments as a single unit, and have a single dude check in every once in awhile. They did that in Britain, because of different legal treatment of trespassing between empty and `occupied' buildings.) But how do you define under-occupation? Where do you draw the line?
Just use a land tax. It's simpler and harder to evade.
What makes you think they don't?
In fact, wasn't that the problem in 2008?
That environment did artificially inflate the growth of urban sprawl McMansions above any working class persons paygrade, but it was nowhere close to direct intentional housing subsidy beyond trying to achieve some pipe dream of families on 30k combined income affording a 5k square foot house.
If so, what's the basis for this belief? Have you read the study I linked to, which concludes otherwise? If so, what part of its reasoning do you contest?
Source: http://experimental-geography.blogspot.com/2016/05/employmen...
(Author of blog post here.)
For the primary target audience (city planners), this makes sense.
Or just give poor people money?
Depending on your political leanings, you might be happier with just lower taxes.
(And yes, the welfare-trap is probably real. Make sure to watch out for effective marginal tax rates of poor people especially.)
In London this is through the Green Belt, torturous planning laws, height and density restrictions, low interest rates, government-backed mortgages and lending schemes, etc.
Supply in the markets for food, computers, software, etc. is not nearly so controlled by government action (or inaction).
Obviously the better solution is to do away with the restrictions, but politics is the devil's day job and all that.
Good thing there's no actual people involved.
For instance, imposing a very high land value tax would reduce the value of land, which would in turn reduce the cost of housing.
It would only potentially reduce the tax-exclusive cost of housing. It would not reduce the tax-inclusive cost. (In fact, the rational expectation would be that it would radically increase the tax-inclusive cost.)
You are right, that the tax-inclusive cost of housing won't change with a land tax on its own, at least not as a first order effect.
If however, you eg use the land tax proceeds to lower taxes on labour and capital, building higher (ie using more capital for housing) will become more economically feasible. (No economic revenue will be lost. Lower taxes in a jurisdiction directly lead to higher land prices---which the land tax will capture.)
There's also some other second order effects, like less NIMBYism. (https://www.dartmouth.edu/~wfischel/Papers/00-04.PDF) This will make development easier.
But I guess it's because of different attitudes in these two parts of the world? American don't trust poor people with money?