A Texas nonprofit experiments with land trusts, for affordable housing
citylab.com
citylab.com
The point of a land value tax is not to make housing more affordable, but to ensure land goes towards the most productive use. If LVT was implemented along with zoning reform, housing would indeed become far more affordable because lots of more housing would be built. But a government subsidy for lower income families to pay below market land rent is a very different policy and has none of the benefits of LVT.
[pdf] Economic development and the distribution of land rents in Singapore: A Georgist implementation
The causes of ever-increasing rent are clear, but unpopular to address. We need more transit and living opportunities in healthy, job-rich areas so that 100 people aren't competing for a tiny apartment. Sadly, any movement to do so is attacked as "gentrification" or nonsense about "luxury" apartments. So, nothing gets done and people continue to get priced out. :/
The opponents to transit and living construction tend to be people who complain about "other people" moving in, "my property values", and "neighborhood character".
We are on the same side of this issue, I simply urge you to direct your anger at more appropriate targets :)
I have a feeling that "house as a place to live" is fundamentally incompatible with "house as an investment".
It's about class, and to a lesser degree race. If there was good public transit, then 'inner city' people who can't afford owning a car could come and go freely. The suburban middle class don't want anything to do with 'those people'.
It's interesting how many commenters seem to think that renders this model ineffective.
"If nobody can get rich in this game, nobody should play" is an odd way to look at this program, which is about helping renters graduate to home ownership while protecting their community from speculative capital.
Why not teach them the ropes of how to benefit like everyone else is?
Telling them not to play the game at all while everyone else continues to doesn't help anyone long term.
Even worse, they're paying essentially the same mortgage (a slightly discounted one) but will see a fraction of the proportional benefit as their neighbors do, when it comes time to sell.
Then it will be just another way that the system is set against them to get ahead.
Housing is first and foremost a place to live; financializing it has really been a big effort (and mistake) since the '70s. https://jakeseliger.com/2015/12/27/why-did-cities-freeze-in-...
In my country some cities offered 49 years or 99 years of lease on land to people willing to build homes. Since the land is owned by the city there's no much concern it will got in hands of banks.
It's worth questioning whether this is a desirable goal. I'm not saying it is or isn't, but I don't think it would be universally accepted. At the risk of being grim, I stand to inherit a gorgeous home near Monterey purchased by my grandparents in the 1950's that I could never, ever afford now - and with prop 13 I could continue to afford it.
But is that good? I wouldn't even live there full time. Maybe someone else could make better use of that land, but the current tax system enables me to keep it as a luxury when someone else might want it as a necessity (a home).
Eventually, of course, it will go to someone else, as a logical consequence of not being a chain of only children, so there is that.
It's also worth considering that "owning" land is a little bit strange in the sense that if it's in a location that can support life reasonably comfortably (fresh water, decent soil) and isn't inhabited by aboriginal people, the paper trail goes back to "someone just took it from the inhabitants" which puts modern claims on shaky grounds.
Though all of this is kind of secondary to the fact that we made it damn near illegal to build new homes near good jobs.
Do those aboriginal people have an army that can reconquer the land? If not, then the shaky grounds aren't that shaky. We still live in an environment where the rule "might makes right" still applies. Don't forget that.
Which is correct. You have to draw the line somewhere when one civilization replaces another.
What is not ok when this rule applies within a civilization - you get a class struggle when one faction uses their (political) might to acquire land with an advantage.
As the parent says - land ownership as a concept is shaky and its infinite transfer over generations even more so because you tend to accumulate errors of unethically acquired land with time.
What actually is fair is a continual payment for land use to the community through government for the fact that they guarantee you, but nobody else, to use the land.
On Netflix you pay monthly fee for the service. Our land system is akin to purchasing an expensive perpetual Netflix license with infinite amount of transfers to your descendants through inheritance. What if you knew somebody inside Netflix and they give you this cool package somehow for very cheap?
This is the situation with our land systems - they are separating social classes by design - with long time convergence to aristocratic and serf classes.
What happens after the 99-year ground lease is up? Are the house and land then sold together on the open market?
Edit: they're specifically requiring someone to build a house there. It seems like if someone wanted to build multifamily housing, even if that would be a better use of the land, they would be turned down. That's a perverse incentive.
You call it a handout, I call it compassionate government.
That would actually reduce market prices instead of requiring a subsidy.
>Compassionate government
Nope, a government driving up market prices by restricting new construction is not compassionate just because they tried to help a handful of families buy below market.
You're free to your opinion this is "inefficient" and causes "perverse incentives". In the meantime, people get homes they otherwise wouldn't. Some of us consider that a win.
The market failure is the government permitting people to buy and sell land. A small trust buying up some land and taking it off the market doesn't fix the underlying failure.
> The market failure is the government permitting people to buy and sell land. A small trust buying up some land and taking it off the market doesn't fix the underlying failure.
This argument is hopeless. Good chat.
Then use the profit this produces over the current system to directly subsidise low income households.
This is more efficient and has the same subsidy effect.
Land shouldn't be sold, it should all be owned by the state and leased out at market value; equivalently, implement LVT at close to 100% of land value.
The state setting a maximum sale price and subsidizing demand is not that.
That there already is a land value tax.
There are plenty of historical examples where people weren't permitted to buy and sell land. It never worked out very well.
Georgism has a solid theoretical foundation.
The result is blight. It often happens with "the projects" where the government builds housing and rents it out.
Renters can have exactly as much community spirit and take as much pride in their dwellings as anyone, but it requires that they're treated with a modicum of respect, which unfortunately is exceedingly rare in lardlordism.
No, they don't. Talk to hotel staff sometime about how their guests treat the rooms, for just one example. Or how people rent cars and go race them. Or how sensible people avoid buying former car rentals.
Anybody in any form of rental business knows it isn't true.
There is a vast difference between a hotel guest or AirBnB renter, who will only be staying a few days or a couple of weeks at most, and someone who rents an apartment/house for years and is part of the local community.
There are also cultural and personal differences, because neither I nor any of my friends would ever trash a short-term rental, whether it was an apartment, hotel room or a car.
However I also know people who don't even give a damn about their own things, they trash everything they touch, it is absolutely not some universal trait in renters.
Overall, the less egotistical a culture is, the better short-term renting, tool sharing and similar programs work.
> neither I nor any of my friends would ever trash a short-term rental, whether it was an apartment, hotel room or a car.
It's not just "trashing". It's in general being harder on things.
I'll give another example, this from the military, as told to me by my father, career Air Force. The military issued combat boots to soldiers, and when they'd wear out, the soldier would present the worn out boot at the supply office, and get a new pair.
They had a rate of boot exchanges that seemed high. As an experiment, the military instead provided the soldiers with a uniform allowance. What they didn't spend they could keep. The boot consumption dropped by a factor of three.
This was not soldiers "trashing" the boots. It was simply not caring about them.
I will treat a rented or borrowed item better than one I own myself, as would my friends, simply because it is the right thing to do and because we would all hate to be handed a mistreated item the next time we rent something.
What you're describing is a cultural issue of people lacking respect for other people, and it is by no means a universal trait in humanity. However a lack of respect usually correlates with immaturity, which is shown in your example from the military. Young men tend to lack the requisite level of maturity.
When people mature, they usually start respecting other people and start caring about making things last for as long as possible. If the lack of respect persists well into adulthood, you're dealing with a major societal problem.
> it is by no means a universal trait in humanity
I didn't say it was universal. But it happens plenty enough that you cannot dismiss it when, for example, making public policy.
>" That is caused by putting disenfranchised, poor and troubled people there, and no longer giving a damn about them once they have a simple roof over their heads."
It is not an inherent nor universal trait of humanity.
It happens because people often feel uninvolved, disconnected, and self-concerned to a fault; they do not trust their neighbors, because they have been given no reason to do so. They have been propagandized for decades with the message that they must be self-sufficient, responsible adults, and the way you measure that is in wealth, and that in that regard they are, at best, in competition with their neighbor.
One consequence of this is not giving a damn about anything you do not own yourself, which is a sick mindset, a symptom of a sick societal order.
Most of the western world has adopted this neoliberal mindset, and it is making us increasingly more callous, the longer it goes on.
I am merely pointing out that this is in no way universal, and that the behavior you've observed is not caused by human nature, but rather by societal pressures and the forced state of constant ego-centered competition that people find themselves in.
Neoliberalism has made us callous and indifferent at best to the plight of our fellow human beings and the natural world.
They've all failed. Even when the only members are true believers in the idealism.
It's almost as if such goes against human nature :-)
If you want to talk about socialism specifically, the biggest drawback of socialism is that if you do it too well, you attract the attention of the US military industrial complex.
The entire modern history of Latin America exemplifies this issue.
Neoliberalism and capitalism do not tolerate alternatives to exist, because they undermine the condtructed narrative that no valid alternatives exist.
The US is hardly the only place where socialism has been tried. Last I checked, over 10,000 communes have been formed in the US since its inception. They all failed. None were put out of business by government intervention.
The Pilgrims tried a commune the first year (they starved). The Jamestown colony also attempted to work as a commune (they starved). The San Francisco Summer of Love commune lasted maybe 3 months.
Remember the Jonestown commune?
Israel has their kibbutzes, but they'd starve if they didn't receive generous taxpayer support from the Israeli government.
The great thing about the US is there are no laws against communes. You are free to go set one up with your like-minded friends. Nobody is going to try to stop you. People do it all the time.
But they never work. They never have, and never will, because of human nature.
They tend not to shout a lot about how great and awesome they are, because that sort of thing goes against the idea and mindset.
Perhaps you should look beyond your own ideology, and you'll see that there are a lot more and sometimes better ways to do things than your particular way.
Stole the land they use and supported themselves selling illegal drugs. Maybe they're also living off of government benefit checks, which is not self-sufficiency.
No mention that I could find on the turnover. 1 to 2 years is a typical stay in a commune, as people get tired of it and move on.
> sometimes better ways to do things than your particular way
If Freetown is your ideal, feel free to move there. No thanks from me. It's neighbors don't appear to care for it, either.
> cooperatives
Cooperative housing isn't the same thing as giving people free housing any more than a corporation means giving people free shares.
Georgism is specifically about land, not housing. The theory is that land value isn't much affected by investment of the landowner. Housing is, and that can be owned by individuals who then have a strong incentivize to take care of it.
Houston has zoning, they just don't call it zoning, and it's a mess. https://kinder.rice.edu/2015/09/08/forget-what-youve-heard-h...
The parent was talking about the government getting out of the way and letting people build denser neighborhoods. Japan has a good zoning model, based on population density and flexible land use.
In the U.S. zoning is used to restrict the supply of housing. Building codes exist for safety. What is the reason for zoning? To protect to investment of current homeowners and screw everyone else?
Nightclubs attract crowds, some of which will be rowdy, drunk and belligerent. They will urinate and defecate in doorways, cause property damage and may be violent, depending on the type of crowd the club attracts.
Subtract cost from benefit then add future resale value of property.
That's nice, but many people would just like to have a roof over their head that will stay over their head.
More people, means more innovations. Higher density leads to a more rapid spread of new ideas and best practices. Workers, entrepreneurs and investors can rapidly reconfigure to seize opportunities. Less density means you're more likely to fall into stagnation, as the one local employer in commute distance slowly circles the drains.
City life comes with significantly better living standards. What you lose in yard space you make up with much higher salaries, better healthcare and education, and more varied cultural options. To a large extent country living is only idyllic because of the technological exports made by high productivity city-dwellers.
I agree that there's a deep human need to connect with nature. But the solution isn't to try to give every man is his own personal Nottingham forest on his property. It's to build high-quality parks and nature reserves, and good transit so people can easily access these amenities.
I'm not entirely sure that the dichotomy of high productivity city-dwellers/lower productivity country dwellers is true any longer though. I'm a dev manager/programmer working remotely, many of my neighbors are also in IT or construction and either work remotely or commute, and many programmers in our company also live in "fly-over" states in rural areas. Most also own chickens, have small farms, or raise competition animals.
But I still understand and see your point, and I see the value in this for suburban areas. I suppose my mind went to areas more rural than the article is talking about.
Overcrowding, traffic jams, very high housing prices, high prices for food and everything else. Yes, you earn more, but you pay more for living in smaller apartments, so the standard of live isn't guaranteed to be improved.
Here's a comparison from Numbeo: You would need around 3,630.58$ in Austin, TX to maintain the same standard of life that you can have with 8,100.00$ in New York, NY. https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...
I think that moderation is best, and there probably are ranges of population density which are the best. Urban sprawl is bad, as is overcrowding in the city center.
In some parts of the world, you can live in a rural area and travel to work by fast trains, so you can have your cake and eat it, too.
As a counterfactual to the NIMBY West, Tokyo has very high density but surprisingly affordable housing because it places few restrictions on building and land use.
The point is that whoever values the land most should get it. If you're willing to pay more taxes on the land than someone who wants to build housing, then you can keep it. If not, the land should go to whoever can make the most productive use of it.
This is how we lose natural land to sprawl. A large chunk is bought by a developer, clear cut, split into many small chunks, and sold to private individuals.
This splitting of the land into many new owners makes conservation of an area in the future to be much harder.
LVT makes sense for urban areas, but should stop where the city line is.
From there out I could see LVT leeding to increasing deforestation, sprawl, and destruction of the natural environment.
In certain areas I would even argue doing the opposite of LVT and be giving people tax incentives to leave land undeveloped and natural, better yet join parcels of adjoining land together in conservation projects while still allowing people to live on it, just where they cannot develop most of it, maybe even allow public access in the form of hiking trails using the "Freedom to Roam" principle.
This is Land front-running - somebody has information you want or will want something and buys it for himself and later reselling to you more expensively (eg. concert ticket scalpers, high frequency trading or simply knowong that there will be generations of youngsters moving to cities so why not to buy real estate there and sell it to them later).
While this market-making can be a useful service for smoothing out price of goods with price fluctuating up and down, it however becomes immoral for badly auctioned goods - such as desirable concert tickets which are often sold to scalpers in large quantities who front-run every other buyer. Also in real estate and land markets - where all the QE printed money creates asset price inflation, so by buying in those markets you can front run people who don't yet have money for it or are not even born yet.
This ceases to be a problem under LVT because you auction land usage fairly to a large degree.
No front-running -> no sitting idle on land by developers and deforestation -> optimal allocation to users.
Freehold properties trade ata significant premium to leasehold.
Before accumulating wealth, most people are interested in having a shelter.
Let's say someone has 50 years to live, from a point on. To have a shelter, it will cost him a = 50 * 12 * rent if he rents, b = x * 12 * rate if he buys a house and pays the mortgage, c = y * 12 * rate + 50 * 12 * land_rent if he buys just the house and lend the land.
So picking the smallest from a, b and c might be better for that particular individual.
I wonder why $105,000. Looking at Zillow a quarter acre of land in the Acres Home area sells for ~$50-$75,000, and substantially less if you buy a bigger lot. And per the article, banks are providing home mortgages, thus substantially financing construction. Unless they're selling the houses for significantly less than the cost of construction, it doesn't make sense. Even if you had to heavily subsidize risk premium on the mortgage, a $105,000 expense per home seems exorbitant and not sustainable.[1]
I bet costs could come way down if there was some serious money put behind a project like this to scale it up. Singapore, Hong Kong, and other places around the world (often former British colonies, because of smart U.K. housing policies immediately before decolonization) build affordable housing using similar schemes (99-year property lease, transfer covenants, etc), but on a much larger scale. San Francisco could (and should) do this, rather than spend years negotiating over developer exactions for every tiny project.
[1] It would make more sense if most of that $105,000 was recovered on the first sale. But the article calls it a "subsidy", and other context suggests the $105,000 isn't directly recovered.
At that rate, Houston metro could get 100 homes for the same price it takes to produce 10 affordable homes in the San Diego metro area!
won't try to categorize - take a streetview tour:
https://goo.gl/maps/9sEyR9YRRR2EDFND8
what is clear is that this area is mostly empty fields or pretty poor, with vastly more expensive gentrifying houses popping up in the greenspace.
a large area land trust can buy large chunks, preventing speculation on the greenspace from completely removing the existing community
subsequently, since community members are part of the trust, they would defacto own all of the local land, guarding against future speculation and ensuring a like-minded voting block w/r/t local property tax policy (which is huge in TX and in practice what serves as the state income tax)
so to me the topic is basically like rent control for real estate.
whether or not this is the state's business is another topic - interesting that our free market, 'classless' republic is in effect building up a hereditary landowning class though.
How Danish housing cooperatives work (6-min whiteboard video): http://stories.coop/stories/kab-how-cooperative-housing-work...
This is a model for affordable housing that really works.
However, Danes spend the second highest proportion of income on housing in the OECD after Finns.
See the chart on page 2.
http://www.oecd.org/els/family/HC1-1-Housing-related-expendi...
A better idea would be to deregulate housing and let developers build condos there, and she could buy one (or I'd be totally fine with government assistance in her buying one!) Way more efficient use of the land, and she could accumulate real wealth that way
(see http://www.appleseedpermaculture.com/8-forms-of-capital/ )
> Festa also rattles off a list of other policies that bolster his case that Houston effectively has zoning.
> Deed restrictions: In Houston, developers create rules to prevent things like corner stores within residential neighborhoods. Those rules are called deed restrictions. Houston is unique in that it will represent residents when they try to enforce those covenants.
> Density: Historically, the area within the confines of the 610 Loop have been permitted to have higher levels of density than the rest of the city. But recent changes to city policies extend the higher density levels all the way to Beltway 8. “Those are rules that tell you what you can and can’t do, based on where you are on a map,” Festa said.
> Tax Increment Reinvestment Zones: The controversial tool allows certain areas within distinct boundaries to retain property tax revenue for uses within their borders. The word “zone” is right in the name.
> Airports: The Houston area has three major airports, and under federal rules, the communities around them are subject to zoning requirements. “It’s a good chunk of metropolitan Houston, and it’s flat out zoning,” Festa said.
> Buffering ordinance: New rules restrict tall buildings to “major activity centers” by limiting their height, set back requirements and construction styles.
> Historic preservation: Residents can ensure many types of building restrictions within their communities if they get enough votes to create a historic district.
> Lot sizes: City rules restrict lot sizes, but neighborhoods can petition for even tighter restrictions if they get the votes.
https://kinder.rice.edu/2015/09/08/forget-what-youve-heard-h...
That's the entire point- to make housing affordable, not to make housing a investment.
As I said in my original comment, I'm sure it gives her family more stability, but wealth accumulation via government-sponsored real estate ownership is literally a huge part of why white families have more than African America ones in this country. I think this program is missing the forest for the trees
There surely must be a point in which we realize a course of action is wrong and abandon it, instead of perpetuating it to be "fair" to those who joined later?
There's value in getting off the mortgage/rent treadmill entirely. It's a lot cheaper to live in a paid off house.
San Francisco has a land trust (I only know of one). But it's community-based and owned. Here's the site: https://sfclt.org/
There are other trusts as well, such as farming trust: https://malt.org/why-we-protect-farmland/?gclid=EAIaIQobChMI...
Regarding the effect of 99-year property leases on home prices, there's a condominium tower at 946 Stockton St/950 Washington St in Chinatown that has a 99-year ground lease (expiring in 2069, I believe).
Units in both developments regularly sell for a fraction (~ 1/3 to 1/2, IIRC) of comparable units in the area. You'd have to know the details of the shareholder rights (coop) or accession rights[1] (ground lease) to know how the prices compare to freeholds or rentals, but it shows how alternatives aren't new, just merely coming back into fashion.
[1] That is, whether ownership of the tower transfers to the landlord without any renumeration for the improvement; whether the condominium owners have a renewal option, etc.
And don't skip the article below the comic.