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Comment by duxup | Hacker News Reader

Hard to imagine a local city has the funds available to just buy up property.

I’m also not sure “punishing” (well now you have to buy it) local municipalities results in better governance.

Also sounds like an invite for corruption. Evaluate high, sell to the city… now the locals are all on the hook.

If the city can buy property at 90% of appraised value, they can sell to the market at true market value. As long as their appraised value is accurate, they profit from this arrangement.

It provides the proper incentive to align appraisals with market value and prevents the city from exploiting its citizens.

It’s an interesting idea, a few loopholes come to mind:

If the option to sell is at anytime through the year, there is the risk of city being on the hook when values tank across the board. If the exercise window is only say a month after the appraisal this risk is diminished.

I could see this system being used to exploit uneducated homeowners and essentially con them into selling below market value. Not sure how to lower the risk of this one happening.

1. I would expect the window would be the same as you have now to contest the value. Ideally nobody would exercise this right since it is essentially an SLA for government assessment quality. Everyone would rather have an assessment be consistent and slightly conservative than arbitrary and inflated.

2. I don't see the exploit? If they sell below market value then the government gets the profit.

I think you're missing the point - that system invites corruption of the appraiser. There's a nice kickback in it for someone who artificially inflates the appraisal of a worthless property and, forcing the city to buy it from the owner who is in cahoots with the appraiser. Leaving the citizens holding the bag of course.

That will become apparent as soon as the city is stuck holding a property it can't sell back to the open market and the appraiser will quickly find himself audited.

Why wouldn't a city use an independent appraiser to vet those numbers?

> Hard to imagine a local city has the funds available to just buy up property.

Hard to imagine the US government has 1.5 trillion lying around to pay people to stay home, but they figured it out.

Unfortunately the local city can’t just print more money. I suspect they could raise property taxes instead though.

I'm sure they'll figure it out.

Local cities /= federal government.

It doesn’t have to be the city. you can imagine an interesting system where instead of an appraisal, every property owner puts their own valuation and computes their own tax. The catch is that anyone is able to buy the property at the assessed price for cash, without any negotiations or any opportunity to match. You will see tax evasion go to zero immediately and enforcement cost will also be zero.

I think such a system, while good for theoretical discussion, would be ripe for all manners of abuse and problems as proposed. Perhaps in the ideal free market where everyone is equally educated on property values it might make sense. But such a reality will never exist.

> The catch is that anyone is able to buy the property at the assessed price for cash, without any negotiations or any opportunity to match.

Sounds like I lost all my property rights right there…

This is Henry George's land value tax, articulated well in the second greatest economics book of all time, Progress and Poverty

https://en.wikipedia.org/wiki/Georgism?wprov=sfla1

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