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Comment by harryh | Hacker News Reader

What's so special about housing that you need an extra special tax like this? We don't have it for cars or machinery or other kinds of capital goods.

I'll answer my own question: the root problem of too high rents is that governments:

1) have outlawed the construction of enough new housing to meet demand.

2) many places (CA especially) have property taxes that are drastically too low (and in CA's case, radically unfair).

Vacancy taxes are a bad hack. As you note in your comment you have to build in all kinds of grace periods or exceptions and even these can often be easily gamed or ignored.

Cities will be much better off if they fix the real underlying problems.

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This law was implemented in Vancouver. It worked at reducing vacanies. It wasn't gamed, because the fact that a person can only have one residence and that that confers a lot of rights is enough to dissuade it.

>What's so special about housing that you need an extra special tax like this? We don't have it for cars or machinery or other kinds of capital goods.

Land is not capital. It is not infinitely reproducible. You can't make more land, and as a result there is hard limit to any one kind of housing.

>1) have outlawed the construction of enough new housing to meet demand.

I agree that this should be fixed

>2) in many places (CA especially) have property taxes that are drastically too low (and in CA's case, radically unfair).

That is really far from being the reason for high rents, since most places with high rents don't have Prop 13.

Prop 13 causes all cities in CA to collude against building more housing. Any city that breaks this gets "punished" with the full force of other Californians escaping their poorly planned city.

I cannot manufacture more land downtown, while a car can be manufactured and moved wherever. Land, unlike other capital goods, cannot move to meet demand.

An unused machine sitting in the middle of a busy factory floor gets in everyone's way and quickly finds itself being thrown out so the factory can run more efficiently.

An unused plot of land sitting fenced off in the middle of your city extends everyone's commute and diminishes the services available within walking distance in its neighbourhood. A municipal government interested in a functioning city will want to put that space to better use just like the factory owner did, and structure landowner incentives appropriately.

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