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Comment by twelvechairs | Hacker News Reader

> taxing the uplift in land values

Need to be clear on this as theres a lot of bad assumptions below

The best answer is not a standard 'tax' but a payment that is required when land surrounding new transit is redeveloped to higher density. This is the clearest, cleanest solution. Homeowners dont have to pay if they stay and developers just factor the cost in when buying property which removes the problem of money just ending up with existing landowners when they sell the land.

This idea has been around for a long time but not widely implemented in the west yet because the politics is hard. Whichever country does it first will have a massive head start for the future imo

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The director of the Switzerland rail real estate told me they went around the world studying existing systems and copied the Japanese way of building stations.

The government owned the stations and leased retail spaces out to businesses in a repeatable templated way. Their goal was for users to never have to leave the station on their way to and from work. So they standardized metro/train stations to have a grocery store, dry cleaning, etc. This was highly profitable and successful.

A lot of rail systems focus on the costs but don’t think about how to design it so that humans want to use rail.

Isn’t this a disincentive to densifying the land? It seems like the tax should occur at least on any sale, not just when redevelopment happens.

A single family home near transit is far more valuable than a single family home away from transit. There’s no reason existing homeowners should capture all of the value of that increase when they’ve paid nothing and done no work to make it happen.

There are holes regardless.

Imagine a railway line/station is built 10 mins walk from me.

I'm not interested in the railway line. So I rent out my home and use the proceeds to buy or rent a larger one in a different location without said railway line.

Trying to capture that value I think would result in some sort of weird rent control / rent tax central planning nightmare that would have pretty bad side effects. It'd probably end up looking a bit like California's Prop 13(?) where people just stay put.

I'll be the LVT guy https://en.wikipedia.org/wiki/Land_value_tax

The thread was started by Lars who wrote a book on LVT recently but apparently did not want to mention it :D

https://twitter.com/larsiusprime/status/1571947781874454533

Yeah, you could do that.

Personally I don't want to live in a society in which homeownership is not possible. I could get behind an LVT on holiday homes, second parcels of land, etc. I wouldn't like it, but I can see why it may be needed.

But a primary residence being subject to an annual tax which can change and outstrip the ability of the owner to pay just means that there's no meaningful way to build stability. I think that's a pretty awful side effect of a flat LVT on everything; I'm invested in my neighbourhood and improving it based on the fact that it's actually mine for life (rather than being temporarily mine).

How stable should property ownership be in an area experiencing growth? I think this could be tunable with short term price increase caps that expire 5-10 years out, and reset when the property is sold or the owner starts paying the full market LVT again.

95% of the time the only difference will be developers pay less for the land to start with and then pay this saving to government at time of development.

A small amount of cases the owners wont want to sell for those lower prices. So yes its a disincentive but only a minor one.

Yes existing homeowners get benefit without paying for it but the usual argument is we cant tax them as they didnt ask for it and some will not be able to pay. Forcing pensioners out of lifelong homes is not seen well

In broader terms we are always looking for some way to deliver owners rights as well as socialised community outcomes. No system can deliver all but this is as clear a compromise as can be made in the view of most I've seen who have looked into it in detail

People take risk buying undeveloped land. It’s a chicken and egg problem. You want to build transit where people live and people want to live where there’s transit. The party that makes the first plunge will potentially make a lot of money.

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