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Comment by kqr2 | Hacker News Reader

A LVT (land value tax) would be more appropriate. You want people to use land more effectively and encourage high density housing. Landlords / developers shouldn't be punished for providing more housing in the same footprint.

A LVT would automatically discourage owning multiple properties unless they are all net flow positive with respect to the LVT, which would decrease vacancy.

LVT can also be adjusted to prevent rent seeking.

https://en.wikipedia.org/wiki/Land_value_tax

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I had not heard of this strategy. Thanks for submitting it here :-) As a sidenote my father always said Prop 13 was never to protect seniors, but to help corporations buy massive plots they'd never have to pay adjusted taxes on in the future. Prop 13 locked in rates for more than just residents. I don't see an end to this without a phased elimination of prop 13, or an abrupt "now it's gone".

Homelessness will boom even more (increasing land values and taxes while on a fixed income), and small businesses will close (old buildings have low prop tax, and with most buildings triple net, the landlords don’t pay the tax).

We really signed our death sentence 20+ years ago. Californians won't have the attention span or the conviction to undo it with a phased or abrupt approach. We'll just have this unequal footing... forever

Yup, there are so many parking lots on absolute prime land in socal. Land that would turnover and rent out an entire 5 story apartment on top of it overnight, based on what neighboring plots have done. I guess having that low tax rate and renting the lot out to film shoots for their basecamp is less headache and more lucrative.

the issue with LVT is in a market where there aren't enough sales to properly value the price of land itself. It does seem to be a pretty good solution if you don't have stagnant market.

Where do you ever have an active market of raw land?

You don’t need raw land transactions. When you buy a house today it is already assessed separately from the land on which it sits.

And that assessment is based on an opinion (in other words, on air) rather than a market signal.

Not only that, it's not even an attempt to reflect the market value in most jurisdictions.

I've not heard of this: why is that? What else is it an attempt to reflect?

Here's a pretty randomly chosen one from a state that I know does the practice GP describes:

https://www.zillow.com/homedetails/3304-Gillenwater-Dr-Knoxv...

Sold in 2021 for $190K. Tax assessment in 2020 was $111K; in 2021 was $28K; in 2022 was $50K. The assessed value has no obvious tight relationship to the market value.

Eh, not quite. There are lots of market forces on that number, mainly not wanting to pay higher taxes and higher insurance and having the ability to appeal/contest it and get different appraisers.

I am not taxed differently on the land vs the buildings. There is no market force on the land portion specifically from the city. Any appeal I would make would be based on comps, which are invariably land and improvements together.

My insurance limits are distinct and negotiated between me and the insurance company, based on the cost to rebuild, which is at best loosely correlated to the current value of the improvements.

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