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Comment by joe_the_user | Hacker News Reader

The idea of a LVT is that valuable land should an efficient use - the obvious example of inefficiency are the upper middle class neighborhoods on the SF Peninsula - Silicon Valley. The aggressive zoning and relatively low tax situation mean that it's impossible for people who get job in Silicon Valley to live there, causing crazy spill over to the rest of the SF Bay Area. Theoretically, forcing up taxes would force more efficient uses of land - allow the building of apartment high rises and so generally increase the affordability of housing.

But that's theoretically. Whether you could actually impose this regime is a different matter. What the "real" value of land isn't a clear thing thing imo. A town might that since it's zoning prevents building much, it's land isn't worth much.

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But a city needs different buildings with different uses, no? However, IIUC, a LVT would tax a plot of land by what use it could theoretically be put to in order to make the most money. And this is evaluated individually for each plot of land, with no regard for what would actually happen in reality if every single plot of land would actually be put to use in the most money-making way. Would a LVT not force a monoculture of, say, only lofts, where previously each landowner might have opted to allow things like nightclubs or the occasional park or other forms of variation and whimsy? If you tax every land owner as if they have the maximum possible income, do you not essentially force every landowner to implement that way in order to acquire it?

This is an interesting thought. It's like how we want developers to build affordable housing, but through the market they are forced to only create "luxury" developments in order to make up for the large fixed cost of the land.

Large apartment complexes are typically worth a lot more per land area than luxury developments.

Food for thought: profit per square foot could stay the same by decreasing unit size and increasing the number of units if zoning allowed it.

It's interesting and I need to do some more thinking and research. On the one hand I don't think that one should be forced off one's land because others could be using it in a more valuable way. However the whole idea of property rights is founded in improvement or creation of value. Abandonment is a thing, and if you do nothing to improve or derive value from land you can lose your property rights in it.

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