How Georgists Valued land in the 1900's
progressandpoverty.substack.com
progressandpoverty.substack.com
Weird snipe. YIMBYs are certainly skeptical of some kinds of community input, but that doesn't mean they're opposed to all community input or control of everything.
And, yeah, community input is bad.
If the only value you are able to hold onto is the development you do yourself, then you aren't going to block your neighbours from building up their property.
While developing a piece of real estate can cause a good deal of damage to the character of a community, ideas are much more dangerous in that regard.
Why is it then, that we allow for unscrupulous capitalists to disseminate ideas freely? Why isn't there "community input" into the things newspapers are allowed to publish?
But, because of community input, the voice of local busybodies is louder than that of the general population. It is a a disservice to democracy and prevents our governments from functioning in a way that serves the people.
Was the community input to Robert Moses' NYC plans bad?
* https://www.theguardian.com/cities/2016/apr/28/story-cities-...
How about to the Spadina Expressway in Toronto?
* https://en.wikipedia.org/wiki/Allen_Road#Spadina_Expressway
* https://www.tvo.org/article/the-streets-belong-to-the-people...
But that was a long time ago and the pendulum has swung too far in the opposite direction. Robert Moses could not build today. Nobody can build today. Largely because we have given neighborhood busybodies veto power over all decisions.
It's a disservice to the people when they democratically vote for something like a high speed rail and then never get it because the voices of local property owners matter more than that of the population.
This is the real problem. There are forms of community input that are fine, but if you let local neighborhood councils veto any kind of building they don't like, they'll do just that.
Community input is bad when it leads to bad results. Kind of a tautology, but my point is just that you can have good community input, it does happen, even if, yes, the general 'local' culture in the US tends to lend itself to NIMBYism.
We've seen a huge amount of economic success from allowing talented motivated people to do what they think is a good idea without developing a consensus on the proper course of action. That probably scales down into to the small too. Progress depends on letting outliers happen.
the benefits of the business goes to the private person running the business from their residence.
But the externalities falls to the community (or at least, shared by the community).
Therefore, a community wanting to ban a business from a residence is very valid imho.
However, if the business could either prove there are no externalities, or compensate for it in some way, then there should be room for negotiation, rather than a straight outright ban.
It's not 0 sum. Someone else, potentially from the community, also gets value in exchange.
A business profiting off making goods/services for a community is good and all, but can still produce externalities, for which everyone, including those who _didnt_ participate in the business transactions, would pay.
There are zero private businesses which generate positive externalities that they do not charge money for (and if they did, then it's no longer an externality). To do so would mean they leave money on the table! They can only shed negative externalities.
Generally it means that they can't capture the full value they add.
If I have a business installing domestic solar panels, I can capture the economic benefit to a homeowner of getting cheaper electricity, but not the broader impact of helping to decarbonise the grid.
(There might be a subsidy for this business where you live, but that's irrelevant: in principle a business like this can exist and be profitable without capturing all of the value it creates).
A trade takes place when both buyer and seller feels they gain something from the transaction. In general neither side captures all the surplus value, if they did the trade would not happen.
Typically a business sells services enjoyed by the community. A grocery store shortens the time to buy food and so on.
a non-patron of the store still incurs the externalized cost of a store (such as increased traffic, noise, etc). A patron of said store has benefits which offsets those externalized costs, but not for the non-patrons.
Therefore, a community wanting to ban a business from residence is the kind of problem that can only be dealt with from a higher level of government, which can distribute negative and positive externalities in a more-or-less even way. It is absolutely not "valid", on the assumption that valid means permissible, for a community to defect on its share of the negative externalities while still taking in the positive externalities from the rest of the country.
There’s just a blind assumption that it’s net positive for 100% of the population within a certain area, without any solid basis whatsoever.
Freudian
Throughout my life I have benefited from the fact that I live in a place with successful businesses and a strong economy.
The home business example is kind of a red herring. All the zoning I've ever seen does allow for home businesses with a few restrictions or requirements to prevent things like overwhelmed parking.
YIMBYs is a silly term, since its usually a developers talking about forcing changes in someone else's neighbourhood. Considering the input they like, it's only from the second definition of community, notably people not currently in an area, or standing to endure the downsides.
IMHO it is the genuine and most adequate 'community', because the less abusive way to decide is subsidiarity ( https://en.wikipedia.org/wiki/Subsidiarity ). Constraining people who live near the potential site makes them at best suspicious, they will better memorize this constraint than any benefit from other projects.
Also I think it's important to consider what we call a community. We can't consider every single block a community, a community is a town or even a metro area. They use shared water, to to shared schools, and they need to make decisions together because these things are interconnected.
Is there a genuine market preference for single family home ownership? I'm sure some people prefer to live that way especially because it allows you to take advantage of the ample subsidies we give single family home ownership. But if there was a preference for it we wouldn't need to artificially restrict people's ability to redevelop them into multi family homes. No one would choose to live in them so no one would build them.
And that's how you end up with the interstate cutting off the poor/black section of town from the rest. Of course there are different levels of community, but there tends to be some out-group that gets the short stick. If every neighborhood says no to new section 8 housing, where does it go?
Yeah, preferences vary by demographic and market, but overall, 65% of people want a SFH and the average preferred size has increased continuously over the past few generations.
The restiction isn't that people don't want to live there. The restriction is because you're intermingling the people who want SFH lifestyle with people who want multi-family home lifestyle. Of course the SFH current residents are concerned about the potential issues caused by neighbor renters, parking, etc. Even SFH rental properties are similarly looked down on due to the common problems that some tenants cause (noise, lack of respect for property, etc).
It is the exact opposite. Fighting this sort of thing is exactly why I want to get involved. The reason that these projects are put in poorer, less white areas is because we give small groups of individuals (sometimes even one individual if they are willing to file a lawsuit) veto power over projects provided they have the time and resources to use these levers. So people build projects through poorer less white areas because these areas often don't have the time or resources to fight back. In my town the plans were to build two wide fast arterial roads, one through the rich neighborhood and one through the poor immigrant neighborhood. Guess which one had a successful campaign to shut it down?
The whole concept of zoning was created, not to concentrate uses as you say but to enforce racial segregation and horde wealth among land owners.
> If every neighborhood says no to new section 8 housing, where does it go?
Exactly! We do have this happen because of this hyper-specific veto levers so we are left with section 8 housing pushed to the worst parts of towns.
People want a single family home but is it because they want the shape or because society is arranged such that it is functionally the only way for the middle class to build wealth and feel a sense of housing stability? And would they still want it if the subsidies were removed and they had to internalize the costs? I am sure that some people really do want it, probably a lot but it seems strange to use that as a reason to put your thumb on the scales.
I get that people are concerned but I feel like all of society is negotiating things like this. Some people feel uncomfortable seeing people with piercings or tattoos, should we ban them or restrict the places they should go? Everything is a trade off but I don't feel good treating certain types of people like they are toxic waste that needs to be contained.
Not considering each neighborhood is how we get here. If you treat the city as a whole as a community, you lose the granularity and it ends up as you describe - the rich veto in their area.
But what is your solution? The section 8 housing or other universally unpopular projects have go somewhere. Do you think the SFH owners in the poor part of town want it in their backyard? It has to go somewhere. It's not about containing people like toxic waste. It's about existing individuals not wanting to deal with a reduction in their estavlished quality of life over statistically founded concerns (not appearence related but project specific, such as traffc fatalies, noise, etc).
"People want a single family home but is it because they want the shape or because society is arranged such that it is functionally the only way for the middle class to build wealth and feel a sense of housing stability?"
Does it matter? Is there a solution that would make a difference? For most people, this isn't really building wealth because you need to live somewhere, so that wealth isn't available to use. From my experiences and talking with others, it is mostly because of the stability, freedom, and not having to deal with bad neighbors as closely. I'm not sure what costs you are referring to that wouldn't apply to other types of housing. The only real subsidy homeowners get would be the property tax deduction. Maybe some developers worked out deals that indirectly benefited homeowners, but so too for the apartments. Where I'm at, you have to pay to install utilities from the street, pay taxes to support the infrastructure, etc. In fact, SFHs tend to pay more taxes than condos and apartments, subsidizing the schools and other property funded programs.
I am not saying we shouldn't consider each area as important I just don't think we should structure policy so tiny areas are incentivized to fight each other and the loser is where everything "bad" gets built. Also I pointed to a clear mechanism by which this sort of thing leads to inequitable outcomes, what part of that do you disagree with?
> But what is your solution? The section 8 housing or other universally unpopular projects have go somewhere. Do you think the SFH owners in the poor part of town want it in their backyard?
I feel like I have a solution here and you haven't proposed one. My point is that we should be more permissive with where we build affordable housing, including and especially in more exclusive areas. What is your solution?
I think towns or metro areas should come together, decide what they want for the region together, turn that into a set of rules that will bring about those outcomes, and then stick to those rules. If there are problems with the rules they can be revisited but not by making special exceptions for each individual project. I want to get close to John Rawls' veil of ignorance where people are setting rules based on what they think is fair and not based on their own interests. Obviously, it is impossible to achieve this ideal but I think a higher level conversation is more conducive to this kind of decision making.
> Does it matter?
It totally matters because if it is the result of policy then it is something we can change. There are numerous costs. Yes the individual needs to pay for utility hookup but in general water systems and roads are more expensive per housing unit if each segment of shared infrastructure serves fewer people. Zoning policy in general increases the supply of single family homes relative to multi family homes, decreasing their cost. 30 year mortgages are guaranteed by the government and home appreciation gives home owners a huge tax exemption when they sell their home. These apply to condos as well but loans are difficult to get for some forms of multi-family housing and they still put their thumb on the scales in favor of home owners at the expense of renters who are much more likely to live in multi-family housing.
I'm not disagreeing with the result. What is the solution to the factions not fighting? I haven't heard one so far, so I'm disagreeing with your stated cause of it.
"My point is that we should be more permissive with where we build affordable housing, including and especially in more exclusive areas."
That's not a solution because there's no path to achieving it and ignores the established legal processes, such as appeals, that society has decided are fair. As you've pointed out, the exclusive areas fight it. My solution isn't worth going over in detail again, but has been raised in similar discussions on here. Basically, these problems are the result of population distribution. Creating incentives to repopulate and employ shrinking cities will provide the best overall results through economic reinvigoration of places like the rust belt, take advantage of vacant housing, and have less barriers to development of new housing.
"It totally matters because if it is the result of policy then it is something we can change."
It wasn't posed as a policy issue. It was posed as an architectural vs stability issue. Stuff like not dealing with bad neighbors or landlords can't be cured with policy anyways. Many utilities charge a connection cost per building, where you have an apartment building paying lower per resident fees than a home. And higher density often requires larger infrastructure, so it's not just cost per stretch.
"Zoning policy in general increases the supply of single family homes relative to multi family homes, decreasing their cost."
Maybe that's happened in your area, but not around here. Most of the townships around here permit higher density housing in many areas, but it's rarely built. The predominate thing bring built is single family. The zoning does nothing for the cost - the cost of a townhome is significantly cheaper than a single family home. The mortgage guarantee applies to mortgages on other residential property types as well. The tax break when selling also applies to other residential properties like condos and townhouses. I have friends and family who live in condos and townhouse- loans were not difficult to get at all. There's no merit here to support that SFHs are favored over higher density ownership.
"they still put their thumb on the scales in favor of home owners at the expense of renters who are much more likely to live in multi-family housing."
I'm not sure what you mean here. Many areas even have rent control and rent assistance. I don't see anything being done to benefit home owners at the expense of renters.
If you give local neighborhoods too much power over what gets built, guess what's gonna happen when the thing has to be built somewhere? That's right, it'll automatically go to whoever has the least political power, whoever will fight it in court the least.
And who has the least political power, in terms of neighborhoods? We all know the answer.
And based on pricing, it seems that most would pick the SFH if they could afford it.
Of course, in a city with transit and traffic pressure the calculus may change.
Where I am there’s basically NO redevelopment pressure, as you can find empty land within a mile.
I used to live in Munich and I'd be fine with it if it took the form it did there. We lived in a 'quiet neighborhood' in what amounted to a backyard duplex, where in front there was a 6-unit apartment building, with car parking underground. None of the ugly surface lots you see in the states.
The fact is it's not actually your backyard just because you've added that label to yourself. (See the DPRK)
Wealth of Nations
Maybe Land Value Taxes can solve the problem but I'm beginning to think that these problems are part of our characteristics as a species in ways that might be nearly impossible to successfully solve.
Our government literally just sits and sits and vast quantities of land that goes barely used for the lols, while our young people would happily build a shack on a piece of it instead of being relegated to hopelessness.
If I see an Apple shop across from a parking lot, it may not be immediately obvious that the land part of the valuations should be similar. I could see the crowd systematically getting this wrong.
Having said that, it's not a damning criticism. I think LVT is a good idea, and people are generally going to know what piece of land is worth more than another. You can then stitch the relative values to some sort of exchange-based anchoring to give your map real dollar values.
I do tend to think a Harberger system makes a lot of sense, though. Maybe something a little bit like:
- Everyone puts a value on their land. We take the total, figure out what percentage needs to be taken, and everyone pays their share of the tax take accordingly.
- Your land is for sale at the price you put, but you can change up the price if you don't want to sell it, and thus pay up extra tax. If you have land set at 1M and someone comes and offers 1M, but you don't want to sell, you can pay the tax at whatever price is too high for him, eg 2M would double your tax. The offer needs to be firm so that you have an actual choice, someone can't just double your tax bill on a whim.
If you must have that sort of system, there probably ought to be an obligation on the buyer to first pay to have the entire existing structure demolished.
I think the offer is supposed to be on the improved value (IE including the value of the building) but the tax is on the unimproved value, so you do get the value of your house if they buy the land.
Perhaps more reasonable would be, if we imagine a new Georgist city on undeveloped land, to require that every building is detachable from the land; IE it is attached to its foundations, by twistlocks, like intermodal containers, with the utilities also being supplied via some standardised connector. Not only would you then just be able to move your house to somewhere else, but it would have several other advantages. It would be a universal argument against NIMBYism - if you don't like new infrastructure being built near you, you can just move your house elsewhere. It would make it less disruptive to build new infrastructure anyway, as houses could be moved out of the way instead of being demolished.
If you now say that we need to provide two different valuations (land + structure) but we're only taxed on one, don't you think we'll find that everyone lives in very expensive houses on worthless plots of land?
What are you suggesting as an alternative?
- Both taxation and offer on the improved value - this is consistent, but it's no longer Georgism so it doesn't solve the problem of how to estimate and tax the unimproved value
- Both taxation and offer on the unimproved value - this is now unfair to the owner as you're not paying for the value of their house, and also they have the incentive to include the value of the house in the land value
No mandatory acceptance of offers, land valuation by fiat.
WHAT? This is ridiculous. What happens if someone buys the land out from under your skyscraper, and you can't afford to move it a couple blocks over? Do you live in a LEGO world?
Then you could "value" the land at £200k and pay a higher property tax to secure that preference. In other words, your property is more valuable, to you.
>If you must have that sort of system, there probably ought to be an obligation on the buyer to first pay to have the entire existing structure demolished.
I think you are right, which is a problem. Or you could stipulate that all the buildings are demolished before the land bought in this manner is used.
I think this system would evolve into people overvaluing their land to be between the land and the land+building value, and then keeping a public offer for the land+building value. That strategy would minimize the land-only sales and encourage buyers to buy the entire building instead.
That's fine, but then it becomes a property tax rather than a land value tax.
The hard part is that its implementation would cause a significant (& possibly violent) backlash from land owners intent on defending their privilege.
I already pay a land value tax. I also pay a tax on the house.
The same goes for commercial properties here.
Is this really not common? I constantly see internet claims about how it would cause violent uproar from evil land owners if we taxed land value, but as a land owner I can tell you it’s already happening.
Switching to a full land value tax would just redistribute the taxation entirely on to the land and make the structure tax free. That would be awesome for the people with giant, new construction houses around me but not so good for those of us with smaller, older construction buildings in the same neighborhoods. It would be really bad for the old people living out their final years in their modest old houses which need a lot of repairs (and therefore have low structure grades in the tax system and low structure taxation).
LVT does exist in several places in the world but it's usually around ~3-5%. Unusually for most taxes, it can be raised probably to almost 100% without any economic ill effects, but the land ownership classes would raise absolute hell.
This is how their propaganda mouthpieces reacted in the UK at the proposal: https://archive.ph/6gtRC
>That would be awesome for the people with giant, new construction houses around me but not so good for those of us with smaller, older construction buildings
Not sure why you feel specifically singled out, but ok.
It would be most awesome for people living in high density apartments and least awesome for people who live in crappy low density housing in high value areas which ought to be converted to apartments.
>It would be really bad for the old people living out their final years in their modest old houses which need a lot of repairs (and therefore have low structure grades in the tax system and low structure taxation).
Only if you pretend that those people can't move, and they would. Those people would just downshift to apartments in response - this used to be a lot more common anyway - my grandmother did this.
If you want somebody to feel sorry for, though, feel sorry for old people living out their final years in rented accomodation. If you rent, by definition, you have to pay LVT (to a private landlord), and if you can't pay - to the street for you.
If you are low-balling the price to save on taxes, you run the risk that someone swoops up your property for cheap.
You can't submit bids in this system without the intention of buying, if you have the highest bid you're forced to buy.
If you can demonstrate that the purchase offer is made because of personal animus, or the buyer has no reasonable and specific plans for the property (i.e. the billionaire buying out a small town without a workable business plan), then the courts would overturn it.
Ultimately, billionaires have lots of ways to mess with someone they don't like. If we don't like that, we should circumscribe what billionaires can do with their power.
It's not fine for grandma. She doesn't have a team of analysts, she just wants her house. The main criticism of capitalism is that it's bad for the little people. Replacing it with something else that's also bad for the little people isn't really any better.
You could try to find compromises like locking the family home until death or voluntary sale... then you have extra complications like making it legal for someone to start a small business at their family home without also creating a grey market for people to rent their family homes for other people to start businesses in (or just to live in) and getting the system we already have.
This is how you end up with homeless seniors and disabled people. In my opinion, we shouldn't be working up schemes to force people out of their property. Otherwise you get a developer that comes in and offers you a price you literally can't refuse, pushing the market entirely in favor of the wealthy.
Not really. You might be forcing someone out of a 2.5% mortgage into a 6% mortgage on a new property, incurring property transfer taxes, moving costs, loan underwriting, and other fees. You very well could lose money in some situations. Your argument also assumes they are not in the cheapest homes already. If they are, they could be forced out of the geographic area altogether if there are no cheaper homes (and inherently rents will be more expensive than the cheapest mortgages under that system).
I think they should be pushed out by the wealthy. If you're holding onto residential land in a developing city, and someone wants to build a skyscraper there they should be able to buy you out at a reasonable price. You shouldn't be able to hold land hostage while also paying low property tax
They shouldn't be forced to do it, but they seem to love it. You'd be suprised how many people would prefer a one room shack given the option, lots of people don't actually want the kind of houses zoning and codes require in more dystopian parts of the US, they would rather spend that money on leisure or their children, or their own health.
"You shouldn't be able to hold land hostage while also paying low property tax"
What property are you holding hostage that I can liberate from you?
Because the taxes aren't reasonable. Land is a limited resource.
Imagine a regulation that limited factories by taxing them on the amount of smog they produce. Your argument is like saying "old factories should be able to produce smog at the same tax rate as when they started, it's unreasonable to expect companies to just rebuild factories around new technology"
>What property are you holding hostage that I can liberate from you?
I don't own any property. But if I did, you would be free to liberate it for a pretty penny.
Parting with friends is a sadness. A place is only a place.
Taxes seem high to me in my area. Land is a limited resource, but not as limited as you are implying. There is plenty of land in other areas that could be developed. Instead, we have people with a preference for homes in existing areas favoring using the government to force people out.
Your smog example is completely off base and doesn't represent the way the taxes work in many areas outside of California. My taxes go up every year and will eventually be reassessed for additonal increase. However, that assessment goes up based on reasonable evaluation and not on someone potentially targeting you or your property by bidding it up.
"I don't own any property."
I assume you live somewhere. Perhaps you will be forced out when a wealthy company buys up all the rentals and raises rents.
If you put a $10m/yr property tax on the local Walmart, that money simply comes from slightly higher prices on everything (or most non-nationally advertised things).
Landlords aren’t paying property tax out of the goodness of their hearts, they’re paying them out of the rents, and if they go high enough they’ll either raise rents or sell-abandon the building.
Which may be the goal, after all.
Much more now taxes are behavioral rather than income for the government (especially given the deficits). And credits are explicitly so.
At least income taxes stop when your income stops. Many others don’t.
It's quite likely that once you can legally build a skyscraper on any piece of earth you own, that resorting to a tax extortion fest for old people in desirable areas will seem far more absurd than it already does.
High land values are in large part because zoning requires oversized land ownership for a token to build a housing unit, creating mass artificial demand. The other piece is in places like some of California the regulatory / licensing / permit costs cost more than it cost me to build my whole house.
If you cut off the profit motive by disenfranchising property owners in this respect, the building regulation will return to the level needed for (actual) public safety and wellness (as opposed to just racketeering).
The world is full of land that is held by sellers who won’t sell it “for what it’s worth” - for any number of reasons.
Heck, moving hassle alone means you’d need to hit me with a 50% premium to get me to sell my house, because I don’t want to move right now.
> I think they should be pushed out by the wealthy.
This pretty well summarizes why there is so much opposition..
Seriously? Dump the elderly and disabled on the street to favor the very rich?
We had a family farm that had our taxes go from under $4,000 to around $25,0000 in a single year. There was no warning it just happened. We ended up selling the farm in a few years at a value it was being taxed.
I also think that NIMBY/YIMBY is a strawman argument used to keep the conversation from developing.
Distracted from what? I do in fact view NIMBYs as the biggest roadblock to expansion of housing supply, so I must be part of the distracted masses you're referring to. What am I missing?
One example would be allowing mobile homes with HUD certification. Advocates for this idea would argue that it would provide affordable housing which is true if one looks at initial costs of just shelter. The problem is that currently HUD divides their housing standards by geography and north west Massachusetts and Virginia are considered the same region. This causes the insulation requirements are really inadequate for our winters. This was further complicated by mobile home providers supplying air sourced heat pumps as the heating and cooling. The mobile home was then able to marketed as energy efficient. The problem was that heating system would be completely inadequate without intense insulation upgrades.
The HUD certification comes along with the inability for any local building codes to be enforced. In 2006 as a town we voted to impose "Stretch Codes" for energy efficiency. We voted for that knowing it was going to add at 25% for any building project in town.
My opinion was that the result would unsustainable electric bills and inadequate heating for our vulnerable population. I believed that we would create a two tiered housing system and our vulnerable population would have inadequate housing. I have nothing against mobile homes and believed we could use mobile homes as housing under the current building codes if they had permanent foundation and were sheathed in an extra layer of insulation.
I saw the label of NIMBY as dismissive and distracting from actual issues and the conversation never developed.
I have experience with both air sourced heat pumps and insulation in our area. I have developed an abandoned school into studio apartments that use heat pumps exclusively for heating.
I find catchy labels like NIMBY and YIMBY close to meaningless and hamper dialog and the development of ideas.
Thank you for the comment I updated it to sound less conspiratorial.
Your mileage my vary.
Maybe in Southern California they can work but most everywhere else you end up spending lot rent + heating and it’s more than an apartment would be.
Of course some modular homes that have a technical mobile part are a different story.
Around here the “live while building” is usually done with a garage with a small apartment above it.
The other driver is that there is plenty of affordable(good deals) in neighboring towns 15 minutes aways.
Tenement housing is pretty horrible but way better than not being able to afford anything.
Boarding house rooms are horrible but better than not having a low cost/low commitment option while you figure things out.
Pretty much all of these existed a generation or two ago where I am from but are now completely gone and outright banned by city code. All done by supposed do-good era who had the best of intentions in mind.
We have completely removed the bottom rung of housing for anyone who needs to get started or fallen upon hard times. Once you fall you are simply not getting back up again.
Sometimes perfect is the enemy of good enough for now. I’d much rather live in a trailer home in Minnesota (and have!) than a tent or homeless on the street or in my car. There were very few other options available at the time. Less so now. Dealing with frozen pipes and only being able to afford to marginally heat one bedroom to 50 degrees during a cold spell is luxury to some folks.
This is despite Prop 13 and all the laws on top of it that are designed to keep seniors in their forever homes. Feels like maybe handouts to real estate investment is not the way to give people a roof over their head.
This was already done in every place I’ve ever lived. The local assessor has rules and algorithms for valuing land and valuing structures for tax purposes.
Insurers do the same.
It’s so common that I’m confused about why it’s a sticking point in these conversations. I think a lot of LVT proponents don’t even understand that land is currently taxed in many (most?) places. Switching to a pure LVT would just make the structures free from taxation and redistribute the missing tax revenue on to the pure land value.
Great for people with big, nice, new houses who would get to shift some of their tax burden to their neighbors with smaller, older, less nice houses on similar land.
However, the price to buy the land starts to head towards what it will be worth it developed as soon as the freeway becomes real.
> That strip is the most valuable piece of real estate in the whole city, a fact anyone who’s lived there for any amount of time knows intuitively. Take a moment and imagine yourself attending such a meeting in your own town, what would your answer to [what the most valuable stretch of street frontage in this city is] be?
I am astonished that the author thinks this is intuitively obvious.
Anyway, some kind of "registering a value for property is the same as putting in an offer to buy/sell that property" is needed to avoid subjective and perceptively unfair valuations.
This “step 1” mentioned in the article doesn’t scale, as for example to get enough individual-reported valuation data for each parcel of land that one would have to get an entire community to “vote” (answer) on the land value for each part of their jurisdiction (for example the entire county of San Francisco). For areas outside of one’s jurisdiction (to reduce bias by asking people to vote on land value outside their jurisdiction), the amount of information one has is limited and thus the reporting can be biased. The safest way to get the best valuation of any asset, is to take a playbook from the financial markets for whereby buyers have a direct incentive to best judge the valuation of the asset of any financial instrument for in order to maximize profit from the direct sale of the said asset. However, with the above valuation method cited in the article that there is no direct incentive for people to get correct or incorrect about their answers to land parcel valuations.
Furthermore, the part which LVT doesn’t address well is the valuation adjustments for the property built on the land itself, for example a good Leed certified building with a “good view” versus a run-down building requiring maintenance would have different valuations for which only a property taxation system (based on market value of the property value) will be able to infer. However, overall having a world where built properties on valuable parcels of land can be monopolized, just “seems” wrong.
This would work locally, maybe even up to the county level but how would we reach a consensus at the State and Federal levels?
Here is a link to a Federal study of land value: https://www.bea.gov/system/files/papers/WP2015-3.pdf
There is roughly 1.4B acres of private property that is worth $21,200B or $14,763/acre on average. At a 100% LVT of this average would generate ~20 Trillion in tax revenue. Giving the Feds 8, States seem to spend a total of around 3 or let’s say 4 to put towards debt payments, and then another 5 for local governments. Leaving 3 trillion to redistribute as a people’s dividend which with something like 150 million tax returns submitted each year would be something like $20k per household/tax payer.
This would 100% cover all costs of the government with a Single Tax. No more sales taxes, capital gains, corporate taxes, etc. And as someone who lives on less than an acre paying a fraction of $14,000 for taxes would be such a massive tax cut for me and most people I know.
Tragically this would cause most land in the US to have zero or negative market value, leading to massive distortions and trillions of dollars of wealth destruction. In addition farms would have onerous tax burdens also destroying them. Leading to them either needing to be nationalized or require significant (90+%) tax breaks.
So completely unrealistic and highly disruptive so will never be adopted. But with this Somner method maybe we could get closer to adopting the Single Tax.
I agree but some things like pollution are hard to quantify.
The second tax you bring up is pigouvian sales taxes and those should absolutely be implemented. They are the second least bad kind of tax.
But of course the Two Tax Movement is not what Georgism is referred to as.
Would it though? Nothing is actually destroyed. The land is still there so it's basically just a redistribution. Why not issue some bonds to existing land owners or something as compensation? That's what Britain did when they made slavery illegal? It might delay the benefits to the state by a few decades, but well worth it to fix incentives I would think...
I can’t read your post any other way, but it is so spectacularly unreasonable that I can’t imagine that’s a thing you think is remotely feasible.
In my opinion a Land Value Tax is the simplest way to raise the most money in the least bad manner and using back of the napkin math, even if it is an order of magnitude off, seems to have the possibility of raising a significant amount of that money while on the surface not being onerous to the average person.
Certainly the reality is that the vast majority of private land use is for agricultural purposes and would need to have special considerations with regards to a Land tax to avoid destroying that industry.
The absolute ideal method of retirement is home ownership. Its cheap and desirable for the home owner, and it requires the least services provided by the state until things seriously deteriorate. I once met a woman who was being forced out of her home. She bought it when it was behind a naval shipyard covered in rusted warships. The city bought the land off the military, turned it into a lovely park and opened views from her front windows directly to the water. This caused her land valued rates to increase (she said her property had reached 200 times what she paid for it. 30,000 to 6 million. But she also owed quite a decade of rates to the council and wasn't sure what she would have left over) to well beyond what she could afford, and ultimately with only pension for income it became untenable.
I really don't mind development, coming to the old lady and offering her a big payday for her to leave that she takes willingly, replacing her inner city house with higher density. But Land value as a mechanism to forcibly move on the elderly and hand their inner city character homes over to richer people who don't increase housing density is completely ass backwards.
You get stuck in a cycle of paying taxes -> improving services -> improved services increase land value -> increased land value increases taxes. Its absurd. It honestly becomes an optimal strategy to elect local officials who ruin the neighborhood and decrease value.
Why in the world wouldn’t it?
scoffs At least in my canton, "home ownership" largely implies a three-story house in the hillside overlooking the Alps with the nearest 200K+ city within 15m travel distance. I'm sorry to say that what you present is more comparable to being unhoused.
I'm sorry, but I have to intervene, because this is a stunningly strong claim.
> Its cheap ... for the home owner
Homes are unaffordable for most people today, to the point where renting can be more cost effective than buying. Housing consumes a lot of income which acts like a hidden tax - a drain on the economy.
> it requires the least services provided by the state until things seriously deteriorate
1) Things deteriorate when people can't afford housing. Labor and services become more expensive. 2) Not requiring the state to be involved is an ideological advantage, not a practical one.
> But she also owed quite a decade of rates to the council and wasn't sure what she would have left over
This is an anecdote and as such has limited value, but it's made even less useful by you not knowing the exact sums and percentages. It doesn't justify your sweeping claim in the slightest.
You also seem to be talking about property tax, not LVT.
> Land value as a mechanism to forcibly move on the elderly and hand their inner city character homes over to richer people who don't increase housing density is completely ass backwards.
There's not much wrong with moving for retirement. We don't like to do it, and residential property owners should to some extent (for a number of years) be exempt from land value tax, but the alternative (hoarding valuable land) is much worse.
> You get stuck in a cycle of paying taxes -> improving services -> improved services increase land value -> increased land value increases taxes.
Services don't improve just with tax, but with the influx of capital and development to the area, available jobs, etc. You're using an incomplete model to reason about it.
Some of the other benefits of LVT worth mentioning are that it 1) incentivises owners to use the land productively (density!), 2) discourages land speculation, 3) reduces urban sprawl.
Totally agree. People need to live where jobs are! That's the main determinant of where you live!
When you're retired, you don't need to commute any more so forcing others to have to live further away and commute past you is a large burden being placed on productivity. We want to tax unproductive behavior so this is an entirely reasonable thing to me. All things being equal, retired people should be incentivized to move when they retire!
Retired people need to live where shopping, health resources, and their offspring (if any) are.
Their offspring can't afford to live near them, and can't afford the time to visit with such long commutes.
Maybe if retired people moved, instead of staying where their job was 30 years ago, their kids could visit, and they could even afford more healthcare.
People liking something isn't how we should determine our incentive structure. People like gambling and smoking, but that doesn't mean they're good!
If something is a drain on productivity, we want less of it. In fact, this very argument is why LVT is so awesome! You can tax land without reducing its supply meaning it has zero deadweight loss! This is why economists love LVT, and why many call it the "least bad tax".
Around 65% of housing is owner-occupied in the US. That doesn’t entirely preclude it from being “unaffordable for most people” but it is evidence against that claim.
Out of 86 million owner-occupied homes, almost 80% (68.3 million) were moved into before 2019, before the affordability crisis. The number of owner-occupied houses that were moved into between 2022-2023 has declined by half from 2020-2021. Meanwhile, rentals raised by 50% in the same time frame.
This is evidence to the claim that house ownership is getting less affordable, and it's more solid than just looking at ownership percentage, because it shows a trend. However, even the ownership percentage number looks really poor in comparison with U.S.' greatest rivals, China, who have a 96% home ownership rate.
[1] https://www.census.gov/programs-surveys/ahs/data/interactive...
You might be different, but I have never met a retiree who wanted to rent. Its leisure time. Have a shed, build shit, store your caravan, host the grandkids.
>Housing consumes a lot of income which acts like a hidden tax - a drain on the economy.
Yeah that sucks, lets not increase the burden of home ownership with a larger, overt tax.
> Things deteriorate when people can't afford housing.
Yes, like the elderly being unable to afford housing with land value based taxes.
>You also seem to be talking about property tax, not LVT.
Property taxes determined by land value. It doesnt gain special properties as an acronym, and it doesnt decrease when it becomes the primary source of state or federal income.
> but the alternative (hoarding valuable land) is much worse.
Hoarding land is largely caused by valuable land grants from the government to property developers. It doesnt require some great big alternative taxation system.
>Services don't improve just with tax, but with the influx of capital and development to the area, available jobs, etc. You're using an incomplete model to reason about it.
Yes, land value increases via lots of terrible reasons to increase taxation thats very true.
>incentivises owners to use the land productively (density!)
Zoning laws are the big issue here, you are already incentivised to do this.
>discourages land speculation
Government land release and zoning reform discourage speculation.
For now, just consider that all of these benefits of house ownership will be unavailable to the current and future generations, because they won’t own, won’t have grandchildren (no space to raise kids), won’t have the means to retire and won’t have a shed to tinker in. Partly because of housing costs.
In my own jurisdiction, housing costs are dictated up to 70% by zoning and regulation. Mostly, the failure of successive governments to release enough land to meet demand. But also, zoning preventing higher density construction.
I dont feel the need to implement taxation reform to resolve clear supply and regulation issues. If a bunch of wealthy people were sitting in 1960s character homes, on land thats zoned for much higher density and just chilling that would be one thing. But when I know they are largely just fighting rezoning efforts so their neighbors dont build higher density, and lobbying against land release to ensure their property remains exclusive and expensive, those are the behaviors I want to deal with, and the reforms on that front are very obvious.
Most plans to implement LVT at scale that I've seen include provisions to increase the rate slowly over years and decades, and allow deferred payments for the elderly upon sale or from their estate because yeah, a lot of people made plans to retire based on the present tax regime. Younger people saving for retirement can plan on putting retirement savings into productive assets rather than land speculation. I'm also not entirely clear on why a pension that pays for everything except housing is fine, but providing housing for the elderly is a problematic level of state intervention.
This would allow you to pay a premium for a more stable tax rate. Perhaps you could accomplish this in the private sector through some type of "property tax insurance"?
A fairer system would be to allow unaffordable property taxes to be deferred indefinitely, while accruing fair interest, with the property as the collateral. "Unaffordable" would be means tested. When the owner dies or sells the property, the remaining property tax is paid from the sale of the property. This creates the possibility of properties being underwater, however, so there would have to be provisions to call in the property if the ratio gets too bad.
https://en.wikipedia.org/wiki/1978_California_Proposition_13
It’s the involuntary “beat it, Grandma!” that people find objectionable.
Separating someone from the place they had all their kids because they cant afford the tax is pretty bad. Especially when the property hasn't gotten any better. People shouldnt be at the mercy of subjective, third party evaluations of their wealth. This is why progressive taxation waits until gains are realised.
>Most plans to implement LVT at scale that I've seen include provisions to increase the rate slowly over years and decades
Never seen this, I always see Georgists lamenting home owners whose land has increased in value as evil and deserving.
>providing housing for the elderly is a problematic level of state intervention.
Providing housing for the elderly is fine. But if they are already self sufficient, forcing them into alternate housing is disgusting.
But if someone wants a sprawling estate, they should expect to pay more — especially in areas where that land could otherwise support hundreds of homes, jobs, or services. That’s the point. Land in high-demand areas is a scarce public resource. Using it efficiently — through dense development — lets more people benefit from the opportunity, infrastructure, and services that come with central locations.
Land value tax encourages exactly that. It doesn’t punish ownership — it rewards efficient use.
For example, the current condo in a 40-story tower might well be far less valuable than some tiny serviced flats.
Efficient use might be a very unpleasant target to go for.
So basically what we have today already, but at least a little bit fairer (but still pretty unfair, like what we have already today).
Distinction without a difference, a home includes the costs of the land it sits on, at least until you find a way to teleport a home to cheaper land without a cost.
>But if someone wants a sprawling estate, they should expect to pay more
LVT isnt about taxing sprawling estates more than other homes. Its about charging tax based on proportional value of the land being occupied. Land value is largely informed by factors that home owners cannot control.
>It doesn’t punish ownership — it rewards efficient use.
It does both, and it very obviously does both.