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isn't that forcing people to develop land that we might not want to see developed? like coastal areas, islands etc. That would mean a big crust of hostels/weal

isn't that forcing people to develop land that we might not want to see developed? like coastal areas, islands etc. That would mean a big crust of hostels/wealthy houses along the coasts and gradually seeing normal people live when you go further inland. It's already occurring, but I don't think that's a trend we should reinforce, and the State is has the power to meddle to prevent the market power from doing very bad stuff.

twic 11y ago
You'd have to reduce the tax in areas like that. You can probably justify this by saying that land in an area where development is restricted isn't worth as much as land elsewhere.
- eru 11y ago
  If the tax is proportional to land value, and the development restrictions imposed make prices drop, than the reduction in tax is automatic.
tehwalrus 11y ago
Remote areas and coastline have a very low land value, which is affected by the local facilities and geology much more than other factors. House price != land value, but the two are related: Land value = House price - rebuild value. So, if the price of your house is roughly what it would cost to rebuild it from scratch, your land value is nearly zero, and so is the tax. In some places, the house price is actually lower than the rebuild cost; negative land value. (This applies to extremely remote and difficult to access locations). In central London, for example, the house prices are far more than the cost of the buildings; because they are near the rest of London and its facilities the land value is very high.
davmre 11y ago
The land value tax isn't the problem here. We can discourage development through zoning, environmental policy, etc. In the absence of explicit restrictions, the market value of coastal land will reflect its potential for development, so landowners are incentivized to sell to developers even without a land value tax. As you say, this is a trend that's already occurring. If we want to reverse that trend and preserve coastal land, then we should take steps to explicitly protect it, not just rely on current landowners to resist development when doing so goes against their own economic incentives. In the case where society does take action to restrict development, then a land value tax does the right thing: the market value of the property falls since there's no potential for development, and the land value taxes owed are relatively small.

twic 11y ago

You'd have to reduce the tax in areas like that. You can probably justify this by saying that land in an area where development is restricted isn't worth as much as land elsewhere.

eru 11y ago
If the tax is proportional to land value, and the development restrictions imposed make prices drop, than the reduction in tax is automatic.

tehwalrus 11y ago

Remote areas and coastline have a very low land value, which is affected by the local facilities and geology much more than other factors. House price != land value, but the two are related: Land value = House price - rebuild value. So, if the price of your house is roughly what it would cost to rebuild it from scratch, your land value is nearly zero, and so is the tax. In some places, the house price is actually lower than the rebuild cost; negative land value. (This applies to extremely remote and difficult to access locations). In central London, for example, the house prices are far more than the cost of the buildings; because they are near the rest of London and its facilities the land value is very high.

davmre 11y ago

The land value tax isn't the problem here. We can discourage development through zoning, environmental policy, etc. In the absence of explicit restrictions, the market value of coastal land will reflect its potential for development, so landowners are incentivized to sell to developers even without a land value tax. As you say, this is a trend that's already occurring. If we want to reverse that trend and preserve coastal land, then we should take steps to explicitly protect it, not just rely on current landowners to resist development when doing so goes against their own economic incentives. In the case where society does take action to restrict development, then a land value tax does the right thing: the market value of the property falls since there's no potential for development, and the land value taxes owed are relatively small.