> On top of that, a tax that applies equivalently to all of the land available to the rental market in a given area will simply push prices upwards across the board
Most research asserts that a land value tax decreases the selling price of land.
Most research asserts that a land value tax decreases the selling price of land.
If I buy land for $100k today, I can assume I'm going to make say $6k a year from renting it to someone and $2k a year from it increasing in value, giving me a 8% roi
If I instead had to pay just $4k a year in LVT, the price would reduce to $50k to keep that 8% roi. I'll still be making money for doing nothing.
Now if that LVT was returned to the population at large, it's quite possible the population has more money to spend on land, so I could increase the rental price from $6k a year, but then the LVT would increase, because the idea is it reduces unimproved land value to zero -- nobody should make money from occupying land, they should make money through improving it.
In reality though any LVT implemented would be full of loopholes which would introduce absurd incentives. Just like taxing income, and worse taxing earned income more than non-earned income.
In fact, I'd argue the majority of landlords are shit investors sat on fairly low yields
You're right that some people will get squeezed out, but in high demand markets there are enough people willing to pay that it doesn't matter. The number of properties available for rent in California isn't growing as fast as the total population is growing. Property owners will eat the 5% increase for a while - at least until the existing leases expire - but eventually they'll incorporate that 5% increase into the rent.