We shouldn't be taxing people on the fact that their house is near their job. And if they don't raise the price of their house, someone will eventually buy it at the market value of the house, and the value will simply have been destroyed.
For example, one could misinterpret the neighbor as having the same socio-economic status, making it far less clear how losing the house but gaining an equitable amount of money causes hardship. And blacks specifically have been targeted by such policies in the past, so it's a lot easier to imagine how other social policies align to make becoming un-housed even more problematic for that neighbor.
So yeah, don't like your new neighbors who just bought a $500k home next to you, you can give them $1.5m (or whatever) to get their house. How are they now worse off exactly?
That family can then probably buy the larger house next to yours for $1m, and have $500k in cash left over. A bank that was willing to give them a loan for a $500k house is less likely to do so when they've got an extra $1m in cash?
The system the authors proposed is mainly intended as a clean way to get rid of things like eminent domain and the holdout problem. Most real estate transactions would take place between "willing" sellers and buyers, just like they do now.
That doesn't work. People will set the "real" value to be lower than the real value, in order to reduce their taxes, but high enough that someone who wants to buy the house has to pay barely enough, after multiplying, to make it worthwhile to sell. The tax rates will then be raised accordingly and we'll just have "the mandatory bidding price is the real value" with extra steps.
But you seem to be arguing that if such a system were implemented the very structure of it would lead to a race to the bottom?
I don't see why that would be the case, if there's political reluctance to implement such a system to avoid certain outcomes, why wouldn't there be the same reluctance to raise the relevant taxes?
In any case, the book I cited upthread doesn't argue for some sort of "shock therapy" introduction of a system like this, but e.g. starting with commercial real estate.
Even people who'd argue that they should never have to sell their ancestral family home would probably find it hard to extent that argument to their neighbourhood Starbucks never having to accept a bid from a competing coffee company.
Maybe you want to go see a movie you've been dying to see tomorrow, and you've got your $100 tickets in hand.
But there's someone else in the same situation, but they'd really like to see it. If a market exists they could offer you $1000, and you'd both be happier, as you can now afford something you'd prefer more than the $100 activity.
The same goes for real estate, it's just a less liquid market currently.
The status quo effectively leaves you without a recourse if the current owner isn't willing to sell, the system noted upthread assumes that emotional bonds to real estate can be priced.
House purchases aren't quick so you'd only need to do a few a year.
No:
1. There's no requirement to list the house - who would even know if you sold it twice a year?
2. There's no requirement that the seller has to take the highest offer. The other bidder will have to bid again next year when taxes are due.[1]
[1] You can't set the tax based on what the bid is, because the bidder may not have the money (or may not be granted the bond) when time comes to actually do the transfer. The tax has to be based on what the actual selling price is.
It’s not universal worldwide to have the emotional connect we do to our homes