Lahaina Fire Victims Being Pressured to Sell Land
themessenger.com
themessenger.com
> Local developer Christopher Greene said he’s concerned that the fires will push local residents out of their community.
> "Does this benefit Maui moving forward or does it gentrify it more and hurt the local population? I think we know the answer. And so it’s really critical to rally as a community and also respect the Hawaiian people and their culture and kingdom."
And here is the video of his they show: https://youtu.be/ujLzG8zR8uw
Meanwhile, this is his project, https://islandproject.com/ , which as far as I can tell seems to basically be "Luxury Maui Timeshares on the Blockchain", https://islandproject.com/about-us/. My personal opinion, but it seems to basically merge the scummiest parts of the scammiest industries I can think of: time shares, crypto ("Non-fungible parcels"), and televangelism.
So to have this guy warn about how unscrupulous investors are taking advantage of the locals by gentrifying Maui??? Some people really need to invest in a mirror.
> He said those people may have “ill intent” and issued a warning to scammers.
> “You would be pretty poorly informed if you try to steal land from our people and then build here,” Green said in a press release Monday.
How, exactly, is buying land from someone "stealing"? What is the "ill intent" that is being alluded to?
> “Does this benefit Maui moving forward or does it gentrify it more and hurt the local population?
I know Lahaina pretty well and, while it has lots of fabulous historical spots, it is (was) also a tourist trap with your typical Las Vegas style art, expensive clothing brands, etc.
If I am going through a divorce and I dump my stock in a company to raise cash to pay my ex, is the buyer stealing from me? Even in the loose sense of the word?
Should we paternalistically prevent people from selling because they are desperate and we view the sale price as not enough, despite them wanting to sell?
So, yes, we probably should give them at least some short term assistance so they don't have to sell their most important asset at rock bottom prices. The banks get it, so should they.
I wouldn't call it "stealing", though.
If we are not going to help them through that do we have the right to criticize someone else that’s at least doing something even if it’s in an extremely greedy way?
Yes.
Whether there is ill-intent is true or not, the optics are bad. As it would be for anyone trying to conduct business off the back of a personal tragedy.
Zoning regulations take care of that.
A lot of that negative sentiment is building and going to explode one day because those of native origin are continuing to be pushed out of housing by the weathly from the US buying everything up.
I am very well aware of this.
It should be noted, however, that Lahaina's population is not really predominantly "native Hawaiian" in that sense.
Just like the rest of the United States.
https://www.reuters.com/legal/government/us-confronts-cultur...
Hawaii, along with the Treaty of Guadalupe Hidalgo, are examples of areas of significant escalation of the U.S. expansionist history through the overthrowing of recognized governments. It's all bad, but these are just a different type of bad.
Again, it's all bad, this is just a different kind of bad.
Economist Henry George (1839-1897) proposed that taxing land, but not the property constructed on that land, better reflected the fact that land is a limited shared community resource. [0]
This arrangement has both moral and economic efficiency benefits.
Among them, is the rich 1% are less incentivized to use limited land as an investment vehicle (like gold, or today, Bitcoin), a practice that has runaway price increasing effects, resulting in more affordable land for 99%.
So real estate investment bubbles are less likely, or likely to be less severe.
Since constructing on land does not directly raise its taxes, there is a strong incentive to use it most productively (greater multi-housing development, etc.)
Suppressing availability and productive use of land, by holding unused land as a financial hedge, or unused dwellings as a common step in money laundering, both become much less economically viable.
And there are other benefits of aligning tax (a shared rent) against land (a shared resource), instead of taxing property (the result of individual effort & resources).
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How that would apply here:
In Lahaina’s case, investors would be less incentivized to scoop up land since a land tax would not have dropped due to the disaster. No land was destroyed.
Whereas currently, property taxes, where property was destroyed, will have fallen significantly, incentivizing investors to use the disaster to acquire as much of the limited land as they can.
The more land investors take off the market, the higher the land prices will go, creating a self-reinforcing situation where regular people will be much less likely to ever be able to acquire land in the future.
Vast quantities of real estate are completely, or partially, valued as a store of value, due to its limited supply, and lower taxes for land owners who avoid developing the land vs. those that develop land (as development is taxed).
Virtually every balanced portfolio includes real estate as a financial hedge. Given limited land for this (or any other use) this drives up land prices immensely.
Billionaires own fortunes in unused plots, empty homes & apartments, and vast sparsely undeveloped land expanses, left completely or mostly unused. Because without property on it, land is currently taxed very lightly.
This pervasive circular-demand created by the financial instrument role of land also magnifies real estates role in financial bubbles and crashes.
Just as limited Bitcoins circular dynamics as a store of wealth encourage booms and busts: more demand => more value => more demand; and the reverse loop.
What makes land different from other resources is that it is both limited (especially habitable land near important resources), and necessary for every individual’s survival (you have to be, and store your artifacts of life, somewhere).
So demand for land doesn’t decrease when prices go up. As land prices go up, demand (in total dollars or other currency) goes up, not down.
UNLESS this combination of limitation and necessity is balanced by the economically sensible view that land is a limited common inheritance (nobody created it) and taxed to compensate citizens jointly.
AND development on land is not taxed, thus eliminating an effective double tax on the income that paid for the development (or equivalently, the income that pays off a development loan).
Then then land taxes cancel out speculative returns. The rich adapt by using another financial store of value vehicle that isn’t a survival necessity (gold, silver, Bitcoin, …), and land gets BOTH cheaper AND more productively used.
Presumably the taxes on the land take into account the developable value or relative attractiveness of the land. So oceanfront land (developed or not) would be taxed higher than desert land.
Assuming this is correct, then isn’t there already an incentive by owners to develop the land and get the most value out of it? E.g. You don’t see many undeveloped lots in Manhattan just being held as an investment hedge by a billionaire.
And for billionaires holding vacant condos and houses all over the place, aren’t they already being hit with the friction that a land tax would create in that they pay tax as if it weren’t vacant?
Unless Georgism just boils down to increasing the friction of holding vacant land as an incentive to make use of the land? If Billionaires are willing to own houses all over the place that are vacant and still pay taxes I am not sure this solves the problem by increasing the taxes owing on vacant land.
(Leaving out the case of land with natural resources to mine, or otherwise enjoy or extract, but little or no development potential.)
Developing land, by adding utility infrastructure, building structures, adding building amenities and aesthetic improvements, landscaping etc, all require new sunk costs, which then also increase taxes.
So the return on that property investment will have to cover not only its own cost, but the increase in taxes they create.
It is essentially buying something (development), then being asked to rent it forever (the tax on the increased property value).
A pure land tax would not tax property improvements directly, and so would make development much easier to pay for itself.
While making holding undeveloped land much more expensive (given total taxes across all real estate remain the same, with a higher land only tax, and zero tax on the property development).
Why even let people live somewhere when you can AirBnB it for $9-12k a month.
Capitalists gonna capitalize, end game will be everyone renting.
Investment funds state in filings that they buy properties in NIMBY areas because the local policies protect their investment.
So not NIMBY but
DPOMEAFVSIOTBMBY
The folks snapping up property there are likely to be more NIMBY, not less. Oprah Winfrey, Jeff Bezos, and Larry Ellison aren't buying land in Hawaii to fill it with affordable housing.