This looks more like a way to destroy society than prudent tax policy.
It would raise the value of your land.
Perhaps that's the point - in order for cities to stay dynamic and fair, we need to make everyone pay something close to market value for their land - even those who bought it a long time ago. But doing so is unlikely to make those people very happy.
If LVT helps to loosen up some undeveloped/underdeveloped land and get it into the hands of a willing developer then that is a big win for the fight against the housing crisis.
It's also a false dichotomy. We don't need LVT to solve housing. We don't even know if LVT would solve housing. On the other hand, we know exactly how to solve housing. People just don't want to.
We'll just have to wait and see then. Detroit is going to try it out and we'll see how it works for them.
we know exactly how to solve housing. People just don't want to.
It's a collective action problem. One of the ways we usually solve those is through government action. LVT is a candidate for exactly that!
Well that's a problem with those people if they think their most valuable capital asset is irrelevant.
It is relevant, because without LVT, the tax code is literally encouraging inefficient use of land. Housing prices consistently rising five times faster than salaries is a huge problem, and it is caused by inefficient land use.
If only that were so! Then the American real estate market wouldn't have been artificially stacked in favor of homeowners for the last eighty years.
This already happens just with more economic inefficiency under a property-tax regime. People already vote against improvements that would cause their taxes to go up.
So, up to the point where you would actually sell your land, LVT is simply a liability. Even if eventually you sell are not guranteed to actually make the amount implied by the LVT you have been paying.
Let's think about what structures and incentives and ways of thinking we would foster here. Everyone a property speculator! That worked out so well with housing.
Meanwhile the people who just want to raise a family in peace and stability can now be priced out of their homes because their neighborhood got too "good". And that's just the goldilocks analysis.
In grim reality, city councils can use this to soft-evict anyone, anywhere without giving a reason by simply raising the estimated land value. The corruption is going to be off the charts.
Which is also why I don't think it helps Detroit today as they don't have the problem problem of land that someone else would build up on