Liberalizing Land Use Regulations: The Case of Houston (2020)
mercatus.org
mercatus.org
Related was the discussion in https://news.ycombinator.com/item?id=26994175 the other dya of land appreciation underwriting fast food and small businesses. Very nice to see.
Economics changed however. Land is no longer a factor of production like it used to in classical economics. Real estate market, despite its size and 99% people involved with 50% of their salary in it, is just an afterthough for a modern economist.
Build a nice house on your lot, pay a ton every year.
Stay in a shack on that same lot, save a ton every year.
Becoming a landlord while renting out something new may be a good option though. Or moving to a low cost of living area.
That’s not what’s going on here.
$700k is half what I'd need to buy a place and still end up with an hour long freeway commute.
Also our schools are a joke compared to NJ.
But at least taxes are low here. Wait...
Yeah, but that’s because you live and work in a place that is ridiculously expensive by California standards. (I'm guessing SFBA.)
Not initially. When you pay off the mortgage around the time you retire and have no more steady income, it's night and day difference.
If the entire area is equally high density, then congratulations, it sounds like you live in a very desirable location in the middle of a lot of public and private infrastructure: if that's the case, you should be taxed, to encourage even higher density development and even more productive use of the land you're on.
How do we take the average density? Is it the average height weighted by land area, or floor area?
"average height of building on a piece of land" vs "average height of building a piece of floor is in"
Well, unless all buildings are the same height, the second average will always be higher, because taller buildings have more floor!
Most people would go with the former for the average. And it does make sense in general to average over the fixed thing. But that mean building will pay a greater portion of the total tax revenue than before.
Then a LVT is definitely in your interest as the others say. More stories => less taxes!
From the perspective of the retired person on a fixed income who's lived on the same plot for 50 years while a city sprang up around them, the result is functionally the same.
also observe that the purpose of the tax is not strictly to raise revenue, but to address what would otherwise be an externalized cost and make the housing market more efficient.
In a time and place where we can deficit spend well, and more demand unlocks more growth, this should be the primary purpose of most taxation.
>From the perspective of the retired person on a fixed income who's lived on the same plot for 50 years while a city sprang up around them, the result is functionally the same.
They can sell the land and move
If you can afford to pay 100% upfront for the cost of doing an addition to your house, then you can almost surely afford the ~1% per year additional taxes. This is technically a 'punishment' but it is a really minor one, and I doubt it actually impacts many people's decisions
My desk is right across the street. Used to see that shack every day before covid.
Can't see to find it on http://www.taxfairnessproject.org though
I'd argue actually charging the owner of the shack $100,000/year in property taxes (~1%) wouldn't have a radically different effect than charging them a 2% land value tax.
Under an LVT, the landowner contributes the same amount to their community regardless of their use of the land -- empty plot, slum, or well maintained building. This is good for the community overall.
So in your example the speculator sitting on an empty plot would see their carrying costs double. How could that not affect their behavior?
Once the property is sold, a developer will find that their profit from constructing a building is roughly proportional to the floor area regardless of whether there is a 1% property tax or not. This is because the profit they earn per-sqft is more than the resulting net present value of future property taxes on it. Therefore they maximize the density as allowed under zoning and we end up with an efficient use of the land.
(Of course dumb zoning laws messes everything up, but that's a whole separate topic...)
You don't have to go that far, but it's good to know it's "safe" to do so. Land isn't produced so there's no "100 Laffer curve is 0" type problem in the slightest.
However, once you can no longer gain money from speculating on its increase in value, that also means that there's going to be a ton more land available for increased use. The coercive effect of a land value tax is balanced by the a reduction in people speculating.
The proposed land tax in my state has land tax for seniors accrue against the property and is paid upon sale or death.
The objection to this is that it's a "death duty", to which the response is that you did absolutely nothing to help increase that land value. In fact, you worked against increasing efficiency by holding on when the land could be used for more productive purposes.
That's why the Georgist land tax is such a good idea; it taxes you based on the gains that the rest of society generated for you. Whereas a property tax also taxes you for your own investments.
Just like capital gains on equities. I don't pay until I realize. I'm happy to pay some property tax in the meantime to keep gov't services running in the area.
But any other method is terrifying to me and makes me start thinking "What super rural state can I move to in retirement to buy a nice parcel and be seriously left alone these days?"
With land you're continually depriving the local community of the space they need to live and work. Every hour spent commuting past your yard is an hour wasted. You should continually pay for the privilege of exclusive access to an in demand part of the nation.
That's precisely what this is though? Do keep in mind that the for land tax proposals suggest it replace at least a portion of income tax.
> upon me selling that land to someone else. Just like capital gains on equities.
But with your equities investments you don't get any personal gain until you sell. When you hold land, you're benefiting from it the whole time. We're not talking about only the financial benefits from value appreciation, but rather in the main the benefits that you get from society from having the land.
That's pretty unfair. People who lived a lifetime in that house did contribute their bit to making the area thrive and become more valuable by keeping the place nice, being good neighbors etc.
If you think that doesn't contribute at all, consider the opposite. If they lived there for decades and let the house go to ruin and were belligerently antisocial all the time, that drives away nicer people and helps turn the neighborhood into a bad place.
California's mistake may be ONLY protecting homeowners from newcomers bringing change, and leaving renters out to dry.
There are a finite number of people with finite needs. Growing the housing stock to house this finite number of people is not "perpetual growth" and it's downright offensive to say that when we camps of homeless people, camps of people in RVs without other housing, camps of people in their cars, people working full time but only able to afford overcrowded housing, and at the same time enormous wealth within miles.
A society that allows such destitution while others have enormous wealth is not one that is running well. It shortchanges us all, economically.
In the maximal form of LVT there is 0 value of owning land, the LVT becomes in effect rent to the state (which can be redistributed in a dividend to the people), and rather than assess at all land can be simply rented at at auction.
If I sell my land to someone for a dollar, does that mean the land is worth a dollar? Or is a county assessor pulling a magic number out of his hat that I would have to fight in court? I would say that so long as there isn't a dollar figure attached to the very atoms or molecules that make up the ground beneath one's feet, assessment will always be a blackbox.
>>In the maximal form of LVT there is 0 value of owning land, the LVT becomes in effect rent to the state (which can be redistributed in a dividend to the people), and rather than assess at all land can be simply rented at at auction.
In essence, this is Communism.
Or, you know, he can look at what the land around yours is going for to determine what the LVT should be.
> I would say that so long as there isn't a dollar figure attached to the very atoms or molecules that make up the ground beneath one's feet, assessment will always be a blackbox.
Considering that this is true for all atoms and molecules why is it a problem in this case and not in all the other cases where we figuratively attach dollar figures to atoms or molecules?
> In essence, this is Communism.
I would love to hear why you think that.
And who determines what the land around me is worth? Or the land around that land ad infinitum? In all cases, there is an assessor pulling a magic number out of his hat. The only fair assessment is an agreed upon flat percentage multiplied by the sale price (what one has already paid) with depreciation factored in. Not what a "reasonable person" would want to pay on the basis of what my next-door neighbor pays (property taxes as currently calculated) nor what the government expects to extract from the ideal "best person" (land value tax). These latter two taxes are speculative (that is if they aren't worked backwards as sneaky graduated taxes on top of paying for local services) and ultimately punitive to the people who rightly purchased their property but somehow live "economically wrong" to the county/government. It's the burden of a country club without any of the benefits.
>>Considering that this is true for all atoms and molecules why is it a problem in this case and not in all the other cases where we figuratively attach dollar figures to atoms or molecules?
LVT assumes that land has a tangible and intrinsic value and that ownership provides solely to its the owner opportunity to derive a monetary value that is upto and including its "best use". Does that assumption hold? If we are discussing fiefs and manors. Yes. Mines and riverways? Yes. 19th century factories? To a lesser degree, but still yes. Thus there would be a basis in multiplying a dollar amount by some base unit of hydrocarbon, nitrogenous compound, water, or metal ore. But these days what constitutes a "best use" of land is completely divorced from where people derive their monetary value. In one year, people can make more money with a laptop in a tiny cubicle in New York than they do running a corn farm in Idaho. Does one then come to the conclusion that corn farming is an inefficient use of the land compared to an office tower and ought to be taxed as such? If you do, you're being consistent (to the possible detriment of the national diet). But if you don't, the only way to settle the value of a corn farm is the price at which someone makes a voluntary real sale (by private contract or open market) or by fiat. And that brings us to your next point.
>In essence, this is Communism
>>I would love to hear why you think that.
If an LVT was administered by a private group of individuals and was backed by some sort of resource value table with reassessments made every 2-5 years reflecting market value, I wouldn't have as strong an opposition as I do (although I would still have reservations). However, the scenario posited by the previous poster is that (from what I understand) a maximal land tax allows for a de facto monopoly over the land by government while private individuals merely become renting stewards of the soil they supposedly own. Should the net value of owned land being zero be a good thing to achieve as a policy? If so, how is this any different than collectivization in results, if not means? My statement wasn't a remark on LVT per se but what the previous poster expected to see achieved with it.
LVT, while ostensibly fair if one only looks at the separation between land and real estate, possesses many of the same problems as regular property tax. Ultimately it's not a much of a difference so long as the government is both assessor and rentier. I'd rather have a verifiable and justifiable reason to pay a fee based on what I own and my usage of it rather than quibble over the kinds of financial weapons that government uses to extract value from its citizens as though owing taxes at all was a forgone conclusion. A motive behind the tax must justify itself on its terms before justifying it's means or ends.
It's a rough spot, but I don't think there's any tax policy that could prevent that sort of outcome when you're dealing with such a high debt burden.
[1] - https://www.forbes.com/sites/andrewdepietro/2020/11/23/state...
[2] https://www.illinoispolicy.org/illinois-again-ranks-no-2-in-...
https://www.truthinaccounting.org/news/detail/financial-stat...
NJ/CT/IL have $50k debt per taxpayer, and the next highest state is HI at $31k per taxpayer. And I assume those are understated amounts due to lack of laws requiring governments to perform proper calculation of present value of liabilities for deferred compensation.
Some of the cities are way out of the norm too:
https://www.truthinaccounting.org/news/detail/financial-stat...
NYC: $68k Chicago: $41k
The only way that works out for the average individual is if the economic growth in those places outpaces the alternatives to make up for all that debt, but I think there's a slim chance of that.
NJ charges 2-3% assessed at current market value.
> independent of property value
I think the word "value" is mis-used here. The potential sale price of my home has no value at all to me unless and until I decide to sell.
I pay taxes on my home based on the price I paid for it -- based on what I can afford. Neighbors coming in and paying 2x that for their houses will not change what I can afford. Is it right that my taxes should go up because of their wealth? It's not unlike changing the terms of a contract after I've signed it.
And should I decide to sell, the buyers will pay taxes based on the new sale price -- based on what _they_ can afford. This seems eminently more just than people being forced to sell due to rising taxes simply because their new neighbors can afford to pay more.
The reality is that you value the location, just as others value it, and you also value not having to move probably, but you don't want to pay for it.
I think that you should have a right to stay where you are. And more than that, I think that everybody should have that right, be they renter or owner, as housing should be a human right.
However, land is a limited resource. And by limiting its use, you stand to profit handsomely. You may not think of yourself as a land speculator, but if you profit not through your own labor but because you are manipulating access to a scarce resource, land, then that is actual speculation.
If you truly do not care about the speculation and profit, and just want to keep your place and the labor you put into it, then may I suggest a compromise: you can keep your low taxes, while others pay more to support the community, as long as the increase in the value of the land is taxed at 100% at sale. Because unless you are putting labor into improving your house, any increase in value comes only from the increase in value of the land, something that you did not create, and claim that you do not even want.
If you are willing to agree to this, full capture of the land value increase, then I think we can create a reasonable society. But if you insist on profiting without labor and also at the same time denying people access to something that lots of people want, I'm not sure that society can continue for much longer.
Buy. Borrow. Die.
Whatever small pain home owners feel from this, it's absolutely nothing, nothing, compared to the pain of renters. If you bought in 2010, and property taxes were 20% of your housing cost, and increased to 40% of your housing cost, your total housing costs only increased 20%, plus your home doubled in value, dwarfing any cost from an increase in taxes. In contrast, renters' housing costs increased 100%, and they saw zero equity gain.
Complaints about property tax should not be even entertained, IMHO, until there is a more fair way of distributing the massive economic gains that property owners enjoy through rentierism. If their gains were due to their labor, fine, but their gains are not, it's only through the suffering of others. It's from creating a zero sum gain where the homeowners profit and those with less starting money pay for it, regardless of who was more productive.
[1] https://www.oregonlive.com/business/2010/01/portland_home_pr...
[2] https://www.oregonlive.com/realestate/2020/11/portland-homes...
For (1), that's unfortunate, but doesn't garner a lot of sympathy.
For (2), we should do some rebranding where the house itself pays the taxes and no one feels pressured to take it out of their own pocket if they don't want to.
It should be expanded, state income tax ended, and prop 13 repealed.
A wealthier person in a city could pay for an expensive skyscraper apartment or a taller or higher quality home on a narrow footprint and not pay significantly more tax than someone in a shorter house or lower apartment. It seems the only way for the rich to pay a lot more land tax is for them to go back to having large country estates (that mostly aren’t farmed) which doesn’t seem to be the way the rich are going—most people get and stay rich through businesses which, in western countries, tend to provide services and operate out of a small amount of land rather than farms or mines which exploit their monopoly on land.
Because that penthouse downtown apt definitely cost more than a house in the middle of nowhere, even if its technically smaller.
If the burden of the tax were shared equally than the penthouse would contribute the same amount as each of the floors below it—some small fraction of the total for a tall building.
You can see why the LVT is relatively density-friendly: the taller the building, the less tax paid by each resident.
Sweden and Denmark and the Netherlands have less progressive income taxes than the US. Rather than encoding transfers in the tax code, they perform them via programs, leaving them with a more redistributive system.
> A wealthier person in a city could pay for an expensive skyscraper apartment or a taller or higher quality home on a narrow footprint and not pay significantly more tax than someone in a shorter house or lower apartment.
Sounds like pro-social behavior.
Today the rich buy shops in Manhattan and turn them into garages, lowering the value of the property and thus the tax revenue that New York gets. Rather than being rewarded for squandering, folks should be incentivized to make good use of the space they're taking up. If someone wants to turn a productive business into storage for their toys, that's fine, but we shouldn't be giving them a discount for doing it.
I don’t want to get sidetracked on whether or not the incentives are good, or even whether a regressive tax is bad. (Though I admit I sidetracked with my comment above.) The question is why a land value tax is progressive in a modern industrialised country with a services-based economy?
There's no reason to care if a tax is progressive.
The thing to care about is whether the government is redistributing wealth in a desired way.
Progressive taxes are one way to redistribute wealth to the less wealthy. Payments are another.
If you want a more progressive system in a LVT world, double the tax rate and then send people checks.
Whether those transfer payments are via taxes, payments, or services is not essential for the goal.
If you encode it in tax rates, you are subsidizing behavior that you are trying to deincentivize via taxes, which is unfortunate.
The idea of LVT or other taxes on externalities is to tax behavior you want to prevent. That's why we should tax the capture of land, the pollution of the environment, adding traffic to a transportation system, etc. That's why it's unfortunate to tax things like "making your house nicer" or "converting a parking lot to a veterinarian office" or "hiring another employee". You wouldn't sent checks to someone because they let their house decay or they fired someone, so why would you give them a tax break?
The point of the transfer system is to help people who need help, right? Not to discourage things we want to happen.
Why? Someone living in Manhattan or Queens is certainly using 10x the land value of someone living in rural Idaho. If I were to magically teleport a $3m brownstone from NYC to Idaho Falls, it would be worth perhaps $200k at most (it is old and crumbling).
> While big farms may pay a lot of the tax
As far as I understand, the vast majority of the farms are on rural land that has an unimproved value of close to zero. I don't see how they would pay much taxes.
> A wealthier person in a city could pay for an expensive skyscraper apartment or a taller or higher quality home on a narrow footprint and not pay significantly more tax than someone in a shorter house or lower apartment.
Why is this bad? They are now being very efficient with the use of their land. They have taken less of a rivalrous resource from the rest of society but have managed to shape it to their satisfaction.
Their point of contention was in it not also being a progressive tax. So I guess they want the rich to pay more tax even if they use less of the taxed resource.
The world's richest man own $500m of real estate. Sounds like a lot until you realise it's 0.25% of his net worth (and the unimproved land value's possibly sub 0.1%)
What percentage of the average American's net worth is tied up in the footprint of their home? Guess it's two orders of magnitude more than Jeff's, and potentially >90% of the value of the average farm. Hence not remotely progressive, even if it's less worse than a pure property tax in most circumstances and other even more regressive taxes.
> As far as I understand, the vast majority of the farms are on rural land that has an unimproved value of close to zero. I don't see how they would pay much taxes.
It takes a lot of land to make a farm. (Sure, per acre it's less than the city, but city dwellers don't own many acres and unlike the farmer have a realistic proposition of selling their limited acreage to a condo developer when the tax makes it unaffordable).
c.f. It takes zero land to make a much higher margin SaaS startup.
I think a better question is what percent of the average person's net worth is tied up in the unimproved value of their land? I posit that unless they are pretty wealthy, it is nearly nothing.
This is a good representation of how housing (and therefore land) is valued: https://twitter.com/bufordsharkley/status/138799739507868467...
The tax incidence from a land value tax on someone living in a 300k home in rural California is nearly nothing, while it will be massive on a wealthy person living on a $5m home in Palo Alto. Their actual physical homes are fairly similar - the 4.7m difference is land value. I don't see why it isn't progressive. You give an unrepresentative example of literally the wealthiest person in the world - what about for 99.9% of people? Sure, it isn't literally the most progressive tax possible, but you can apply your argument to the progressive income tax we have today. Jeff pays literally 0 income tax, but that doesn't mean in general the income tax is not progressive.
If you are that concerned about it being progressive - and not the efficiency benefits of the tax - you can literally just make it progressive. 0% on the first $X/ft value of the land, 10% on the next $Y/ft, etc. This would solve your problem with farms as well (if you are not convinced by the graphic that 1000sqft in SF is worth more than 100 acres in Idaho anyway).
http://www.ntanet.org/NTJ/63/1/ntj-v63n01p63-92-evidence-dis...
Here's the abstract summary:
> This study examines how replacing a uniform property tax with a land value tax (LVT) would shift the tax burden for single-family residential properties in Tarrant County, Texas, over the period 1997–2006. Results suggest that a LVT would shift the tax burden away from single-family properties and on to other property classes. For the more recent years in the sample, the average tax liability for single-family properties would decrease about 30 percent, regardless of household income, and SuitsIndices suggest that, within residential properties, a LVT would be slightly more progressive than a property tax. Horizontal equity problems would be greatest for the lowest-valued properties relative to other properties. This study also examines how a LVT would change property values due to the effects of tax capitalization.
https://openknowledge.worldbank.org/handle/10986/2653
In this one the book says:
> A land tax is considered a progressive tax in that wealthy landowners normally should be paying relatively more than poorer landowners and tenants. Conversely, a tax on buildings can be said to be regressive, falling heavily on tenants who generally are poorer than the landlords
So in general the idea is you tax the market value of the land, but not the value of what was done out of it. So an apartment building with 10 units would be taxed approximately the same as a single family home if their land is in the same area and of the same size. But since there are 10 units, each tenant of the apartment building would pay only 1/10 of the tax. Same thing if it's a Condo building. It also means that if someone wants to live near some "hot market" they'd pay higher tax for being there than if they were to move further away, since the tax is based on land market value.
Thank you for the link to the study around Fort Worth (my first guess was that this was some rural country which wouldn’t be very representative but that’s wrong. Most people in that county live in Fort Worth)
What this does is make the Ricardo/Georgist of land more relevant in the current times than it was for agricultural land hundreds of years ago. The difference between good and bad land is amplified, not reduced.
Check out this map of the US, that switches from pixels proportional to acres to pixels proportional to real estate value. Georgism applies most extremely to these areas that metastasize:
https://twitter.com/bufordsharkley/status/138799739507868467...
It's also worth pointing out that the primary "critique" of Piketty's analysis of wealth inequality, with wealth increasing towards capital owners, by Matthew Ronglie, was two fold 1) depreciation wasn't properly analyzed, and 2) most of the wealth transfer went to capital in the form of real estate rather than other forms of capital. And the part of real estate that doesn't depreciate is the land, not the structure. So I view Ronglie not as a refutation of Piketty, but an addition that points the way to the real problem with capital: land.
For George, land was not capital, it had to be separated out because it behave differently than a set of tools. And for George, land doesn't refer just to the dirt on which we build structures, it also applies to things like patents and other monopolies that the HN crowd understands to sap wealth from society.
Georgism is a very unintuitive understanding of political economy, but I think that the HN crowd is far more likely to find it a natue thing to understand, since our "capital" in the form of computers are cheap and plentiful, most of us live in places where real estate demonstrates George's insights dramatically (the Bay Area), and we also encounter other forms of economics land like patents/IPv4 addresses/domain names.
Instead of taxing your property based in market value, you tax it based on what your neighbors value is. It’s basically a scheme to transfer wealth in a arbitrary and confusing way.
IMO it gets traction here because California has an outsized influence on HN for obvious reasons and California’s tax regime is bizarre and unjust. On the flip side, the economic influence of that tax policy makes it very obvious to some people that unjust tax policy can make you rich.
EDIT: while Denmark and Singapore are considered very expensive places to live, the rent in Denmark is actually cheaper (while Singapore could be forgiven to some degree due to the country's high density).
I hear this complaint a lot about Singapore, especially from Australians, who seem to forget that most of SG's 99-year leases are until the 2070's.
Meanwhile nearly every single property in the Australian Capital Territory has its 99 year lease finalised in the next decade. Most Australians generally don't want to have an honest conversation about those people returning their homes to the government and seem to pretend the leasehold system doesn't even exist.
I get the feeling that leasehold and the returning of property to their rightful owners won't stand up well in a democratic society where the majority decides.
As you said, it's going to be interesting when these start to "expire" in large quantities. What the conversation has been in Singapore so far:
- the gov't will "buy out" the remaining lease for some developments and put up new housing. Existing owners will get a payment and a new subsidized house. However, the gov't has said this will be rare (the problem was when this started is people assumed all owners would get this deal so housing prices jumped, even on properties with little lease life left).
- if you do an NPV analysis of the value of a 99-year lease, it's pretty much worth the same as a freehold lease for the first couple of decades, then it starts to be priced as a true lease - e.g. what would the NPV of renting it be for X years? that's the purchase price. So if a home rents for $3k per month and has 2 years of lease left, the purchase price would be $72k (minus any time value of money)
- the Singapore gov't has also said that it will be proactively initiating the lease-end process 5-10 years prior to avoid masses of people dealing with expired leases at the same time.
What that allows you to do is more aggressively tax the land--faster readjustments, and with a much higher tax rate. To the extent you do this, you incentive more efficient land use. But in practice jurisdictions don't do this. If you read the literature on Pennsylvania and Mexicali it becomes clear that this isn't politically viable, and so LVTs there are watered down w/ tons of exemptions and a very skittish assessor's office, and don't actually behave much different than regular property taxes.
Lo and behold, when I dig up the details on Estonia I find the same thing. AFAICT, 1) principles residential homes are exempt (specifically, the land the principal residence sits on). 2) The tax rate is capped at 2.5%, but can be as low as 0.1%. I'll bet that property reassessments in Estonia aren't particularly aggressive; but even if they were, 2.5% isn't very much for just the land value. The median rate in the U.S. is 1%, but that includes land value and improvements; and is as high as 2% in some places.
LVTs just aren't politically viable. When a property assessor's office is faced with reassessing the value of land in a way that forces existing homeowners to sell, they're just not going to do it. And even if they tried, a pro-Georgist LVT assessment tends to be much more speculative because they need to guess what could be built on that land, not what is actually being built nearby. Where they've tried to do that, you either see corruption, a "reluctance" to reassess (see Mexicali and elsewhere), or voter revolts. This is very much how California got Prop 13--the fear of reassessments forcing people out of their homes.
Don't forget, a regular property tax can also be used to promote densification. In theory it's not as efficient, but in most cities vast swaths of land have uniform density, so this efficiency concern isn't implicated nearly as much. And yet, predictably, attempting to use property taxes for social engineering always falls flat. Threaten the [perceived] security of family and retiree homeowners and see how well you do in the next election. All the promises of a better, more equitable future won't save you.
I bet if you look at how LVTs are implemented in all those other countries given by Wikipedia, you'd see the same thing: an LVT in name only, a pliable assessor's office, giant loopholes, etc.
The cost of housing would have to infinitely keep growing if we expect every generation of homeowners are guaranteed a lucrative ROI when they retire. I don't understand how that would be sustainable other than a "Après moi, le déluge" mindset expecting the later generations to pay the bill (yeah, literally our pensions included). This problem is even compounded when considering the consequence of the HGT (the Henry George Theorem).
I am already getting a bit struggling to afford a home that is not as good my parents' even though I have a much higher-paying job. But I can't imagine how my children are going to afford it without my financial aid or they have to move to somewhere cheaper.
That said, I somehow agree with you regarding the political aspect, which probably needs a profound wisdom to figure it out.
Heavily incentivizing new construction.
Because that's what LVT would do. If you pay the same, high, tax no matter what then you might as well build skyscrapers until rents fall below the construction cost.
At which point the "land value" would trend asymptotically to zero because rents would equal construction costs and the value of the land is only what you can collect from it as rent.
It kind of implies that LVT wouldn't generate a lot of revenue if it was implemented faithfully, because land values would crash and with it the "tax base."
But in that environment you don't need that much tax revenue. How much social assistance is necessary if an apartment is $100/month and overall cost of living is correspondingly lower because all local businesses are paying similar rents and it's that much easier to start a small business?
Which implies that you could get to the same, good, place by heavily incentivizing construction/densification on its own, and in general doing everything possible to reduce market rate rents.
Though "stop taxing the building component of real property" is perhaps still a necessary component of that, at which point the argument is maybe only over whether LVT should be the tax we use instead of property tax vs. the tax we use to the exclusion of all others.
I'm not sure that's not what happens regardless, except for the two things preventing it right now.
The first is the existing property tax. If increasing the size of the building on your property increases your property tax, you have to recover that in addition to the construction cost from rents or it isn't worth it.
The second is, of course, zoning. Even if it would be cost effective to build a 20 story building on your lot, you can't do it if it's prohibited by law. If you can't build upwards then you have to build outwards, which requires land, which transfers the scarcity of land into a scarcity of housing and prevents rents from falling to the construction cost.
And you need to fix that for LVT to do what you want it to do. Otherwise the artificial housing scarcity persists and the money just goes to the government instead of the landlord, and gives the government a direct rather than indirect incentive to maintain (or increase) housing scarcity through restrictive zoning.
For example, instead of a cap on a neighborhood of three stories, the cap could be 33% more than the tallest structure in the adjacent two blocks. Or 50% more than the median height of the adjacent two blocks. Or maybe the max or min of those two values. The key would be to have it be not subject to delayed political approval, but rather responsive to what's going on in the neighborhood.
The other thing that's necessary is something like the Greek polikatikia model where the owner of a house can easily have a larger structure built and get a new place in the larger structure:
https://www.bloomberg.com/news/features/2020-07-15/the-desig...
I was just thinking about this a little more and I think this is actually quite bad.
Because rents falling to construction costs is relativistic. Suppose it costs a given amount to build a 20 story building and you can recover at least that much in net present value from it in rent. Then you're going to do it if it's permitted and you have an empty lot. But not if you have an existing 10 story building. Then it would have to generate double the construction cost in rents, because you're getting half that amount of rent from the status quo.
Which means that to minimize that inefficiency, you don't want to be replacing 10 story buildings with 20 story buildings. What you want is to be replacing 4 story buildings with 20 story buildings. Because then you only have to beat the construction cost by 20%. Which doesn't work well if you have to wait until the median building is 10 stories tall before you can build a 20 story building.
But it's not completely wrong if you use different numbers. Say, have three classes of zoning. One allows buildings up to 4 stories, the next buildings up to 20 stories, the last unlimited. You automatically transition from the first to the second when the median building height reaches 3 stories, and from the second to the third when it reaches 6 stories.
The part I believe more strongly in is decoupling the political process from geographic-specific height restrictions. We need to have a political process to derive the general rules for automatically allowing increased density, but any specific site should not have special rules except perhaps for geographic or environmental reasons, and that should be decided at the same time as the general zoning rules.
The real error in California and most of the US has been to downzone everything to current structure levels, then only allow additional building through a political process of granting exceptions. This leads to massive corruption (see LA's city council, for example), as well as increased land speculation.
The other way of looking at this is imputed rent, the amount of money that somebody would be willing to pay to rent out their own home. Well, in theory it would be that amount. In high-demand areas, homeowners' actual imputed rent is higher than they would be willing to pay, because the act of buying property and paying low taxes let's then live in their place for far less than somebody else would pay for the same privilege. Which is how opportunity get hoarded, and how rentiers take over local governance structures.
(I suspect that residential property ownership and use will also break the math here a bit, where the primary purpose of the purchase is not as a money-making investment, but instead as a place to live, so competition for that will also push up the floor of land prices.)
You're still gonna potentially need a lot of tax revenue for stuff like advanced healthcare assistance, so in terms of flattening out cost of living why not just go with a straight wealth tax?
So that was assuming that "construction costs" includes the opportunity cost of any existing use of the property. Obviously for a vacant lot this is negligible. But even for e.g. an existing single family home, the value of one unit of housing isn't much of a loss when you're replacing it with 50 units on the same land. But you're right that this could be non-negligible.
And this is another place where zoning is a bane, because you have a place that has a bunch of single family homes and reaches saturation (no more empty lots) so you have to start building taller buildings. That means land values start to go up, which means developers have the incentive to start rationing land. No sense in building five 4-story buildings when you can build one 20-story building for roughly the same total construction cost and a fifth of the land cost. Except that 20-story buildings are prohibited by zoning, and by the time they're allowed you're already thick with 10-story buildings whose opportunity cost of replacement is much higher. High enough to justify replacing them with 50-story buildings, except that zoning still prohibits those. Restrictive zoning sucks.
> I suspect that residential property ownership and use will also break the math here a bit, where the primary purpose of the purchase is not as a money-making investment, but instead as a place to live, so competition for that will also push up the floor of land prices.
Not really. If you can build a high rise condominium tower and sell units for $50,000, who is going to pay $400,000 for the same number of square feet from a detached single family home two blocks away? Most people would take the $350,000 profit, move into the condo and sell their existing home to the developer to make into more condos.
> You're still gonna potentially need a lot of tax revenue for stuff like advanced healthcare assistance
A lot of these costs really do go down significantly with rents. Hospitals for reasons of emergency response time have to be located in high density areas and take up a lot of real estate. Those costs fall. The cost of living in the area declines, which allows the hospital to attract workers without paying such high wages. Everything gets less expensive, even healthcare.
> so in terms of flattening out cost of living why not just go with a straight wealth tax?
Wealth taxes are crazy inefficient. You have a company which is trying to invest all its profits into R&D, which is what we want, and here comes the government to say that's not a deduction. You have a company which is just scraping by in an efficient competitive industry with high capital costs and low consumer prices, owes the same in taxes as those guys who monopolize healthcare products and raise the price 10,000%; goes out of business and causes the industry to consolidate and raise prices. You have a company which is still owned by the founder, who understands the industry and cares about the customers, but now has to sell shares to pay the tax and control of the company falls to MBAs focused on quarterly profits.
It's basically an attack on efficient capital-intensive businesses with low margins in favor of bloated monopolistic rent-seeking businesses that can produce yields in excess of the wealth tax rate.
Plus, perverse incentive to move wealth into anything the wealth tax doesn't count, or capital flight into other jurisdictions. And promotes consumption over savings for the middle class, increasing wealth inequality (higher shift from savings to consumption for the working class than the rich) and financial vulnerability to e.g. job loss, which suppresses wages by making it harder to quit or hold out for a better offer when unemployed.
The correct way to deal with r > g is to do nearly the opposite of this -- give every regulatory and tax advantage to upstarts, efficient competitors and small businesses so they can unseat incumbents and create new wealth not in the hands of old money, only to be themselves defeated in the next generation if they don't stay lean and competitive. There is no Mark Zuckerberg if there is no single social network with a billion users under the control of a single company, no Steve Ballmer or Bill Gates without the Windows desktop monopoly. They'll fall to competition, not taxes.
But if you really need tax revenue, try taxing rents. Promotes home ownership.
While there are many spots where this may make sense, I'm sure glad this hasn't been a universal approach. There are many neighborhoods with wonderful centuries-old homes, these are often the most desirable areas to life because the areas have character. Not everything has to be constantly torn up to build cheap apartments.
> Most people would take the $350,000 profit, move into the condo and sell their existing home to the developer to make into more condos.
Most people seems like a stretch. I'd imagine most people who have opted into a house have zero interest in going back to a condo.
I'm never buying a house that isn't on a hill. I want to literally be able to see where any water would run away. I don't know why anyone would buy a low-lying house now, except if they were financially constrained.
All I can find is this:
https://www.floodsmart.gov/flood-insurance/requirements
>Homes and businesses in high-risk flood areas with government-backed mortgages are required to have flood insurance.
Which makes sense. I've never seen a government requirement for insurance for a loss only the asset's owner will incur.
"If you receive disaster relief funds following a disaster declared by the president, that money often comes with a caveat that you buy flood insurance to cover the cost of repairs or a replacement building if it is in a high-risk area for flooding. The Federal Emergency Management Agency requires that you maintain flood insurance on the property for as long as you own it. You’re also required to notify the next owner of the requirement if you sell the property. If you fail to cover your home with flood insurance after you receive federal disaster aid, you’re ineligible to receive future relief."
Most of the issues as-of-late have been areas that didn't previously flood. The areas which flood change as development increases.
Houston also has pretty substantial regulation around flood mitigation and such these days. I'm not sure how that relates to this article in any way, which is focused on zoning, minimum lot size changes, and neighborhood-based opt-out on loosened regulations.
Most flood mitigation regulations are essentially zoning/planning/building permit related. They include restrictions on impermeable surface area, lot grading, etc. Let's say you cut lot size in half and are essentially doubling impermeable surfaces. That water has to go somewhere. This can increase the amount of run off and the chance of flash flooding. It can also complicate grading since existing houses might have been graded on the assumption that their runoff can go to the other side of the lot... where the new house now exists.
So they are connected.
natural ground cover is beneficial in many ways over impervious surfaces so incentivize the former and disincentivize (rather than prohibit) the latter. if you want to cover your whole lot with concrete, go for it, but expect to pay for the negative externalities of that.
"but expect to pay for the negative externalities of that."
But what do you think that money will actually do? Is it going to prevent issues? I don't think so. It won't even cover the costs of actual damages in many cases.
It happened. Lots of the flood plain homes that were destroyed in Hurricane Harvey were not flood insured. One of the reasons cited was lax updating of maps, another was builders gaming the system, another was loopholes for land near flood management reservoirs, etc. Things that happen less often if the local government is active around land use regulations.
And, in fact, Houston and Harris county did enact a bunch of new ordinances around all of this after Harvey.
https://wga-llp.com/blog/city-of-houston-adopts-new-floodpla...
I could go on, not sure how much of this is really Houston's fault, the only flood insurance program is federal and they exert so much influence because they do establish the requirements for ~everyone who has a mortgage. Feds should probably take the lead on this.
Also Houston is just really flat to begin with, basically at sea level.
[1] i.e., the land that is intentionally flooded to prevent worse floods from happening downstream.
https://www.governing.com/archive/gov-flood-zone-floodplain-...
I live in Uk, and this sounds downright fraudulent. Its basically knowingly selling defective product.
https://pubs.usgs.gov/circ/circ1182/pdf/07Houston.pdf
Venice isn't just dealing with sea level rise, it's also sinking into the sea due to ground water pumping.
As sea level rises we are probably going to have to find ways to get water back into the aquifers faster. Both to stop subsidence and to keep it out of the oceans. More the former than the latter, but here are some numbers:
The surface area of the oceans is about 361.9 million square kilometers. Since a millimeter is a millionth of a kilometer, every millimeter of sea level rise is over 361.9 km^3 of water. The USGS pegged our aquifers as down 800-1000 km^3 in 2008 an the rate per year is over 25 km^3, and different sources seem to say we're now globally somewhere around 300-400 km^3 net loss in ground water. Per year.
And in the worst places the ground is sinking 2 feet per year due to pumping.
Is that number accurate? Thats would be bonkers, any kinf of infrastructurr or houses would crumble it it's foundations move at that rate.
Just checked here in Austin and it was last updated in 2016. https://msc.fema.gov/portal/availabilitySearch?addcommunity=...
Most metropolitan public transit systems receive only about 50% of their income through ticket prices, the rest come from subsidies in various forms. That doesn't mean those public transit systems are dumb and useless, they add a lot of economic value to their cities, it's just they can't recover that value add through ticket prices alone.
Now, back to Japan's privatized railways, they also get about 50% of their income through ticket sales, however, crucially, the railways own the land around the stations, where they run hotels, grocery stores and whatnot in addition to renting. This allows them to capture some of the value add of the railways through higher land values, and enables them to work without subsidies.
This is nice and all, but probably quite hard to replicate in other countries; What you gonna do, have the government expropriate the most valuable land in the cities and give it to the railway companies? Yeah, that will go down really well...
Are there any others like it (aside from externality taxes)?
I'm of two minds about this but I lean towards the notion that speculation is a net value add.
Think about the trillions raised in the secondary market, which is all contingent on valuations set by supply and demand, where these valuations are determined by speculators. The more accurate the speculators are, the more productive the capital is that's injected into the secondary market.
So I think we definitely don't want to disincentive the institutional speculation that happens, which is what a tax would do.
On the other hand we want to disincentive retail hype bubbles like GME, which lead to the opposite to the above - capital going the wrong way. However it's not clear to me that the tax would achieve that. Retail hype seems rather price inelastic. The bitcoin craze in late 2017 was good evidence of this, since fees for trading crypto are very high.
Progressivity on residential structure value i.e. “mansion tax”
If we moved to a system where data about a person was owned by the person rather than the corporate entity that collected the data, then usage of that data is another good candidate for taxation.
They are perfect pay-per-use scheme, the more privilege you consume, the more you pay. One can argue whether these are really taxes or just privilege fees. That's why groups such as single-tax or zero-tax propose that society can be run efficiently without taxes, because really the only "taxes" you need are those monopoly based ones.
That pattern of development optimizes for... Well, a couple of metrics, but most of them don't have much to do with efficiency or optimization.
Cars are still uniquely terrible. I'm beginning to view them re development like a gene drive is to geneics: a single piece of technology that upends the careful balance from before and takes over everything.
Public transit + anti-car urbanism, while much more fragile due to today's rich hating it, still also has increasing returns though. Do a LVT and Carbon tax too to accelerate that.
Then why does every billionaire and national newspaper support those things? For that to be true, your definition of "rich" would have to include the approximately 90% of Americans who bought a car and a home in a place that requires driving.
Having a back yard and guest bedroom and driving 15 minutes to the grocery store is preferable to the vast majority of people to living in a small apartment and relying on public transportation. If it wasn't these western US cities would have developed differently.
Apparently commuters choosing to not drive is an unforgivable affront to Freedom Markets™.
Cite: The Power Broker, Robert Caro
Ironically in most places it's hardly used at all and the few places where people actually use it are where its underfunded and overcrowded.
The national newspapers I've seen have broadly been pro-infrastructure of all kinds, whether car or mass transit.
A lot of newspapers are for a little for-show light rail with park and drive for 9-5 commuters only, but this is a waste that just begets more car-oriented suburbs.
True urban development is going to force a lot of people comfortable in their subdivisions and predictable slowly-to-the-moon single family home prices to comfort a different world, and nobody likes change.
So it's rich people + status quo inertia. That's a lot to confront.
There is plenty written about making the LIRR more than a rich suburbanite's 9-5 commute booster, and likewise making the long island buses complement rather than ignore a train service that runs east-west throughout the day.
Nobody need pony up 300 a month because there's no other choice.
> it's about time they [cars?] divide the rich and the aspirational
I'm somewhat shocked by this. Why would you want rich people to be able to avoid all the problems they create for everyone else with their greed?
In NYC the congestion tax at least was going to be linked to more MTA funding pre-pandemic.
> I'm somewhat shocked by this. Why would you want rich people to be able to avoid all the problems they create for everyone else with their greed?
So right now cars and homeownership are still broadly popular. People view them as the hallmark of prosperity and essential middle-class-and-up status symbols. There's still a deep sense in many parts that urbanism is just part of the the Democrats fetishizing poverty, non-white people, etc., and that apartments and public transit are palliatives for people that didn't make the American dream or whatever.
And indeed "middle class" in general is the aspirational LARPing the landed rich. Big cars because fancy carriages. Suburb houses with lawns to mimmick country estates (and feudal manors before that). And yes ownership to mimic the land ownership itself.
So for urbanism to win, we need to break the coalition between the rich and the wannabes, break wealth in homeownership as a safety net when the state provides none, and break car ownership as the normal way to travel etc.
If congestion taxes heighten the underlying truth car usage always excludes others from the street, that's great. Hell, if wall street keeps on buying up subdivisions to rent out, I can approve of that in an acceleration way: better we pay rent than mortgages if realigns class consciousness. Likewise with some super-car-sharing world where no one can afford a car if they don't rent out rides.
b) Small transit-connected apartments fetch much better prices than many sprawl houses, suggesting that the preferences people express with their wallets and they preferences they speak into the microphone at zoning board meetings are pretty different.
b) You have cause and effect backwards here. Apartments are built in those areas because real-estate is already expensive. The real-estate is not expensive because they built an apartment building in the middle of nowhere. Things have to be high-density from the beginning for it to work, and everyone building housing since the automobile has chosen to go low-density whenever possible.
Building a high-density city today would require preventing people from building low-density just outside city limits and driving into town, zooming past all the suckers who bought a cramped apartment waiting at the bus stop.
Actually you just said the solution. Let them buy all the exurb crap the want, but make driving hell in all the main destinations. Do that, and your transit investments will actually work.
Only spinless politicians that want to appease both sides make transit fail and let the car win.
Welcome to democracy. The only way this could work is if you could decide to have a city where all the people who want cars aren't allowed to live there (or at least aren't allowed to vote there). In other words, a hard boarder with immigration controls, and ideally an independent budget so the Federal or State government can't tax you are require you to build highways to get your tax money back in the form of grants.
In the case of Denver or some place like it, do a few blocks around the light rail stations. The car owners won't really notice (yet), but the small businessmen will complain. Ignore the small businesses, they are wrong about their own situation: Foot traffic will more than make up for any lost parking.
In fact there is a name, https://en.wikipedia.org/wiki/Tactical_urbanism, for this sort of bootstrapping, to build a loyal constituency over people defending their new car free privileges rather than merely imagining an alternative future.
But stuff like congestion pricing, the 14th street bus lane, and bridge conversions, in NYC gives me a little hope. Manhattan can also set a better example for the rest of the US --- active measures rather than simply basking in good decisions made 100 years ago.
The first time a place is developed it’s almost always going to be low density. And once a place is developed the first time, the only way it can be substantially changed is with near-unanimous consent. There are enough people with an innate distrust of change that this consent is not forthcoming. So the initial conditions are permanent. Cities can’t evolve anymore.
No amount of 'trusting change' will transform the millions of spread out homes already constructed over 80 years into densely packed apartment buildings without tearing the houses down and putting the apartment buildings up. Pre-car cities were built high-density from the beginning. They were never low-density.
Even New York started out looking like a small town. There are lots of places that look like this in California today, and are under comparable economic pressure to grow. They're just choosing not to respond.
1. Most national news, by number of publications leans left. Conservative publications get more eyeballs per outlet, though. Most local news, of course, takes the installation of a single bike lane as evidence that the ghosts of Pol Pot and Stalin have just succeeded in an unholy socialist coup of the local city council.
2. Right leaning billionaires tend to keep their mouths shut more than left-leaning ones.
What do most of the middle class want? To move out of their cramped apartments into a single family home. And to own a car.
People act like suburbanism was forced on people when the reality is it’s preferred by many.
That some people prefer suburbanism does not imply suburbanism is not being forced on a large proportion of the population that prefers affordable housing in cities dense enough to support efficient public transit. When people moved to the suburbs, large corporations followed and built sprawling offices, often in areas with poor public transportation and without sidewalks. When the choice is between an apartment with a hellish commute and a house close to work, of course many opt for the suburbs, but that does not imply that this is their preference. A suburban home and a car are nice to have if it's an option, but too frequently it's a requirement to own a car, and painful to not live near your suburban office.
Who wants to own a car? Between tolls, parking, insurance, maintenance, and the sticker price, it's a large hole in the ground that I throw money into.
I do want to be able to use a car... To go out of town a few times a year.
And it’s not cheap at all (import tax of 100%), yet people are more than willing to pay it.
That's the problem with cars. They are great in theory, but absolutely ruin a city in practice. Which is fine if you are the only person on your block who owns one...
All that said, it sounds like Houston could be a good "experiment" for something more efficient/optimal than the normal US city/suburb zoning scheme. Reduce the lot sizes a bit more, remove parking minimums, etc.
The problem is that Houston is extremely lacking in offering any transit-based options for people, which means the "solution" is going to be extremely biased towards whatever is most comfortable to people who travel exclusively via single-occupant vehicles.
Only inside the loop, which is a small fraction of the city's area. They also point out the pervasive use of restrictive convenants, which make most of the suburbs much like their counterparts in other cities.
One thing they didn't mention is that some parts of the inner loop are not getting any kind of development; mostly the south west loop. As always it's complicated but there are socioeconomic and race issues bundled up in it. At least that was true a dozen years ago.
Literally across the street from my hotel room, on the 16th story, was a single-family detached house.
Odds are good that density is still desired across the street. Or maybe one step down into something more mid-rise. A single family home uses an entire lot to house a single family, maybe just 1-2 people.
It's an inefficient use of our limited resources, and artificially inflates housing prices by limiting supply.
Is personal ownership of land like other property ownership (like a chair), or is it somehow different? To what degree does society at large retain some ownership rights to all land, and a say in how it should be used?
But land is intrinsically tied to housing and food production. We should be strongly discouraging allowing usable land to lie dormant because someone wants to speculate on it. Land should be taxed in a way that encourages maximizing housing/business/service utilization. A city block dedicated to surface parking provides almost no utility compared to placing a forty story mixed use residential building on the same lot. Even worse are property speculators who purchase abandoned sites and do nothing with them for years in hopes that property values will rise considerably in an urban core.
Chairs are created by human (or machine) labor.
Since the provenance of the owned thing is entirely different in each case, it seems likely the legal/social/moral understanding of ownership in each case would be quite different.
If there is shortage of land there is nothong you can do.
It turns out that what he community does say when given a voice is NO!
Who is "you"? The way your sentence is structured is from the perspective of a city planner zoning a city or a powerful central authority actually building these structures.
In Houston, "you" is an individual and if you are placing a 16+ storing housing building down, you're doing it because you think you can make money renting or selling the units. The idea of relaxed land use regulations (zoning) is to allow demand to plan the city.
> It's an inefficient use of our limited resources, and artificially inflates housing prices by limiting supply.
Efficiency isn't the most important thing to all people. If it was, we'd all live in dormitories and eat in the cafeteria because private bathrooms and kitchens are wasteful. I don't understand what you mean by "artificial" inflation of prices, what's artificial about it?
I should have been more specific in 'need the density'. Yes, in today's climate that means 'because someone thought it would be profitable. That's because they saw there was demand for housing there.
> Efficiency isn't the most important thing to all people.
You've constructed a strawman position I don't hold. There's clearly a difference between "we should live in dorms" and "maybe we should discourage single family homes holding the land that could be use to house hundreds of families in apartments or condos."
> I don't understand what you mean by "artificial" inflation of prices, what's artificial about it?
Speculators are buying houses and renting them out in hopes that the land prices will skyrocket as demand for city life increases. By holding the stock of single family homes near urban cores in reserve, they are preventing the land from being used to build large housing developments. Because there is a lack of large housing developments, housing costs are higher than they would be if speculators instead sold all their lots to developers for developing low/mid/highrise housing.
I did that entirely on purpose but it wasn't to say that you hold that position. The point was to show that efficiency isn't black and white and, if your justification was efficiency (which it was), there was an even more efficient position than yours. What you're asking for is something more efficient than a multi-acre unoccupied vacation villa and less efficient than military barracks. I wanted to demonstrate that, on the spectrum of efficiency, you're choice of preferring a multi-level housing to a small single family home is just as arbitrary as any other choice.
But Houston has relatively little urban fabric; to me it looks mostly like a really large suburban agglomeration, a place where you cannot get anywhere without driving a few miles in a car.
Basically, you tax land value (unincorporated) and therefore business/people are encouraged to pay for the most valuably located lots while still encouraging development elsewhere and to discourage land speculation. The modern version is land value tax.
I recently saw sama proposing what sounded a lot like it (though he didn't directly cite it as an influence) and it is certainly something that would be popular among the tech elite because another component of this is those taxes could theoretically fund UBI.
Houston does seem like one of the best places in the world to test this out (exploding population, tons of existing value, zoning laws) but in the progressive era when this was but one of a lots of idea trying to gain traction, it was ruled unconstitutional by the state.
It's something I'd love to see more discussion about.
https://en.wikipedia.org/wiki/Georgism
Geoism seems to be the modern cultural correct identifier.
But then this applies pressures to those who commute in single occupancy vehicles, reduces the amount of available parking, and generally makes the downtown less desireable for those in the suburbs.
To me, this is what we should be doing -- making driving into city centers for work quite unpalatable relative to transit -- but I wonder if Texas is culturally ready to even consider a change like that.
I can't think of anywhere else I've seen such a thing. Ridiculous is an understatement.
What I took issue with was that the article glosses over what I would suggest are significantly more problematic issues with Houston zoning.
Their only mention: "the Bayou City is not without any land use regulations"... is one that prevents sex shops next to schools.
I can't make sense of this, Houston has massive sprawl and all that entails. They cut costs a bit on roads by underspending on maintenance, but that hardly tips the balance.
Suppose we implement a LVT. Housing costs go down and we lift a ton of people out of poverty. Great! Now everyone can afford to own land. But as soon as they do of course they go and vote in tax limits (eg the hugely popular Prop 13) and other policies that incentivze land speculation.
My understanding is that this happened in New Zealand where in the 90s they eliminated a great LVT and replaced it with income and sales tax.
I lived in Houston for five years. I moved there very reluctantly for the only job I could find in the depths of the recession, but I grew to appreciate it as a complex and interesting place that is very much worthy of study. Here are some good things about Houston that I think outsiders should know.
First, Houston is a wonderfully diverse and cosmopolitan city, and not necessarily in the ways you would expect. When I lived there, the parking meters downtown were "Push 1 for English, 2 for Vietnamese, 3 for Spanish." The City website is offered in Arabic, French, Spanish, Mandarin, and Vietnamese (apparently in their English alphabetical order). When living there I met people from all over the world, and among them the general consensus was "this place is interesting." The large majority of people in Houston are proud of that diversity, and celebrate that their city is a global melting pot.
Second, many people assume that all of Texas is desert, but most of the state is not, and Houston is nearly a jungle - many people who visited when I lived there were shocked by how lush and green it is, more like Miami than LA. We had banana trees growing in the courtyard of our apartment, and yes, they were delicious. The nearly-tropical weather and rainfall means that the parks and gardens are often overflowing with flowers and beautiful plants. And while I would argue that there aren't as many of these as there should be for a city of its size, the parks in Houston improved noticeably during the years I lived there, and continue to improve.
Third, Houston is a fantastically low-ego and entrepreneurial place. In Houston, no one asks where you work, they ask "what do you do?" And people tend to have interesting answers. A lot of the people I met would identify as artisans of some kind, and perhaps acknowledge that they worked multiple jobs. "I'm a scrap metal artist, but I also work part-time at a bank." "I'm a pastry chef and a music teacher." "I design shoes and help my parents at their restaurant on weekends." With the very laid back business environment, and in particular because most of the city allows people to operate low-key businesses from their home, it's extremely common to find people running scrappy little businesses inside their neighborhood.
As a result of the cultural diversity and ease of doing business, Houston is also home to an exceptional food scene, made even better by the fact that most of it is quite affordable. I've yet to find another place that had the same casual abundance of excellent food from any part of the world you can imagine. New York is pretty comparable in terms of selection, but usually much more expensive.
Fourth, Houston is has a much richer arts and culture scene than outsiders realize. Houston has the second largest theater district in the nation (after Broadway). The Houston MFA and Museum of Natural Science are among the best in the nation. But more interesting, the city has dozens of smaller, very high quality museums sprinkled through its neighborhoods. Places like the Menil collection, a world-famous art gallery, just quietly chill in the midst of a residential neighborhood of mostly bungalows, small apartments, and neighborhood shops. And the Menil is free for everyone, a gift from the wealth of the de Menil family.
Finally, there are many Houstons, so while I can share my observations (and could share many more stories), it's still not a place that's easy to generalize. The city has annexed a truly absurd amount of it's suburban hinterland, and even then the land area extends greatly beyond the city limits to mostly fill the surrounding county (Harris County), which is about the size of Rhode Island. Infamously, much like LA, you can drive for hours and still be in the sprawl of Houston, and because it is so vast, daily life varies quite a bit among the city's sub-areas. To me this was the biggest negative about life there, I got very sick of all the driving.
For transparency, I lived entirely in "Urban Houston," which is roughly the western half of the city's innermost freeway loop, so my observations are mostly about life in that area (which by comparison is about the size of San Francisco). I also witnessed many old single-family homes get torn down and replaced by 3-4 townhomes. At the time it bothered me, because the old homes were often prettier than the new townhomes (not always, but often). However, this constant influx of supply where people wanted to move made it very realistic for a middle class family to buy a home and move into Urban Houston - at the time townhomes cost anywhere from $200k to $500k, and I bought a fairly nice condo for exactly $100k.
This post has gotten too long, so I'll just end by saying: yes, on the surface, much of Houston is ugly, and it's not easy to see the appeal from the outside. But most people who live there are optimistic and happy, in large part because they are surrounded by opportunity and upward mobility, and those things are worth a lot. And for many people, those things are worth more than scenic beaches or picturesque mountains in the distance, worth enough to even put up with the frustratingly hot and humid summers. So if you've previously dismissed Houston, perhaps reconsider. It's a complicated place, and far from perfect, but there are definitely lessons to be learned there.
It's a great and unique culture and it makes me very sad to see how misunderstood and disparaged it often is various places.
So many of these snide remarks are from people that have never actually lived here. Value them accordingly. We'll still take the future.
It really doesn't matter how many anecdotes or criticisms from urban designers get posted here, because the important part is that an enormous number of people want to and do live in Houston, which is tautologically better urban design than any city which to which people have been unable or unwilling to move.
Just because a city holds more people at a lower price doesn't make it intrinsically better planned.
If you ask people, they're bound to lie to you. What people do is much more indicative of their priorities than what they say.
Many gold rush boom towns pulled a lot of strings to get enough housing, tents, taverns or tenements to house their populations. Would we call most of those towns well planned? Even successful?
Picking a place to live is a balancing act. Houston might have a strong enough job market to offset several other negatives (long commutes, lack of green space). Money is a strong motivator, but doesn't always make for a better QoL or healthier existence.
Put another way, given the option between two suburban hell-scapes, people will pick the one that pays better. But, it's a still a suburban hell-scape.
Personally, I find Austin a much more palatable place to live than Houston (though I continue to remain in DC).
Having a job/money is big factor in quality of life and health. Having a job in Houston is a better than being homeless in a "nicer" city.
I understand what you're trying to say but if you start drilling down I find the distinction you're making... I don't know how to say it exactly but I think you end up creating a place that doesn't exist when you make the comparisons. For example...
> Personally, I find Austin a much more palatable place to live than Houston (though I continue to remain in DC).
"Palatable place to live", even though it's subjective, is a perfectly good metric. However, you would rather live in DC. I know that, because you do. The way you might describe your decision is something like, "I'd move to Austin if _____." That blank can be anything, "your family lived there", "the schools were better for my kids", "my job would let me", etc. So, the solution to what would make you move to Austin was actually this hypothetical Austin with better schools. But that place isn't real, so you don't move there.
Comparing all the places that are real, DC, Austin and Houston, you've chosen DC. And if the reason your in DC instead of Austin was in Houston, you may move to Houston despite your "preference" for Austin.
You're absolutely right that people won't always answer polls seriously or honestly, but it's fairly clear people will put up with awful situations if it will help their family out, so looking at their actions isn't a reliable indicator either.
If you want to remove certain factors you can see what different populations do instead. For instance, if you want to remove economic factors, just look where the super rich retired people live.
You're joking right. Like you think people actually weigh this in their choice? If history has taught us anything it's that people will let themselves be poisoned to make a buck without much thought for the long term consequences. The costs of that poor choice are often externalized onto others.
The whims of capitalism are one way to approach a housing crisis but I see no evidence to suggest they are the only or best way. And you'll have to forgive me if I appreciate that the people in my city government consider more factors than the immediate ability to cram more people in a the lowest possible cost when making planning decisions.
Nimbyism is a scourge no doubt but our choice isn't only between nimbyism and capitalism run amok. I live in a town with identifiable neighborhoods and a community centered downtown. I moved here for those things. A little density certainly wouldn't hurt but there's no need to let my neighbor open a motel or a nightclub next door.
It grew because people wanted to move there, jobs were good, and housing was (relatively) cheap. It's what people wanted. How could you possibly indict this?
Correction. It grew because lots of people did move there. People move despite their personal feelings all the time.
Same with Houston, just that it's also accessible to people who aren't making tons of money as software engineers.
Anecdotally, I spent two decades in Houston and have a pretty good feel for it. It has many redeeming qualities and will always have a place in my heart, but most people I talk to find the flatness, lack of seasons, and oppressive heat to be too much of downsides to "want" to live there. I don't think I have ever met anyone ever who moved to Houston because they wanted to move to Houston in the same way people move to Florida or San Diego or Denver because they want to move to those places.
If you make $40,000 in a lot cities you need to live in someone else's closet. But in Houston you can buy a house, raise a family and even go out to some of the cities nicest bars and restaurants occasionally.
Only if "perpetual population growth and sprawl" is your definition of a good time.
If you look at the prices in SF, people are willing to spend enormous amounts of money to live there, does that mean that it's tautologically better designed than cities that can't command such prices?