Hacker News Reader

Comment by epistasis | Hacker News Reader

> we could fix that easily by putting more housing on the same amount of land

As somebody who has been watching the process for this for years, let me tell you that it is the exact opposite of easy, and nearly impossible.

And it's nearly impossible because current wealth holders are able to stop it from being built. And in most areas where there are housing shortages, locals and local governments consider the current land "built out" meaning that the zoning does not permit more housing or more height than is already built, an the notion of changing these arbitrary restrictions is so inconceivable that it almost never happens.

This is what has really changed over the past yes decades to make housing prices soar: refusal to allow more housing to be built on existing land.

View on HN

This here is the argument that will make a wealth tax face severe opposition. Most wealth is held not by the 1%, but by the next 19%, living in their nice low-density suburban areas. Today there are proposals for taxing wealth over $50 million, but it’s just a matter of time before someone comes after their homes.

While I don't doubt that this rhetoric may be raised, the 19% are already exposed to much more wealth tax than the 1% because of property tax. However emotions and rhetoric about tax make people easily fooled in the political sphere.

You just suggested that the only way to solve housing shortages is to attack the broader upper middle classes with a wealth tax that will push many more of them out of their homes than are currently pushed out by property tax defaults. Funny for you to word it so passively as “this rhetoric will be raised”.

I don't know how I could have implied anything about pushing people out of their houses with taxes. Could you be more explicit about what I said that led you to this?

Building more housing on sites when they change hands, though normal, unforced moves, when a person retires and moves to a new location, or when a person gets a new job and moves for it will provide ample land to build more housing. As long as people are allowed to.

Property taxes forcing people out of homes is a common scare tactic, but it's simple to provide homestead protections that would prevent any forced moves, and also allow the homeowner to capture the fantastic gains in wealth that accompany any land market where there is a shortage of housing. Property taxes only shift the non-resident real estate investor to make sure that they are providing what people need, rather than using idle wealth to keep people out of an area where lots of people want to live.

The vast majority of low-density housing in the US is owner occupied, and the majority of investor owned properties are already multi-unit dwellings. There is already plenty of incentive for self-interested investors to increase housing supply, the it seems implied that you’re in favour of a policy that changes the tax situation for owner-occupied homes.

Regulations constraining housing like oning laws and hefty building codes are a thing

Wealth tax doesn’t push people out of assets, it makes assets less valuable because of higher discount rate. Making housing cheaper sounds like a good thing.

The top 20% of US households have around 90% of the wealth. The top 10% have around 70% of the wealth. The top 1% have about 40%.

Source: https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...

Sure, but that's a completely different analysis. There's no shortage of land.

There is certainly a shortage of desirable land. Waterfront property is a good example.

It's not a different analysis, it's my core point. Land is valued very differently depending on what it can be used for, and what it is close to, and is completely non-fungible.

Zoning restrictions have been used as a means to massively inflate home values in the US in high demand areas, and that program really came to fruition in the 80s and 90s as areas became "built out" according to allowed zoning. Which then fueled the massive inflation in housing costs.

This restriction on allowed uses has differing effects depending on whether it's applies in small areas or large areas: downzone a single lot or single neighborhood in a city and it may prevent those parcels from becoming too valuable because they have limited use. Downzone an entire city and it causes housing values to soar because it has created a housing shortage.

In the Bay Area we have a massive shortage of land that allows more housing to be built on it, and even land for which we can build offices.

Reply on news.ycombinator.com