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I disagree. If the housing costs shoot way up, why should those people suddenly pay more money? Did a real estate bubble suddenly make it more expensive to po

I disagree. If the housing costs shoot way up, why should those people suddenly pay more money? Did a real estate bubble suddenly make it more expensive to police the area? I don't think so. The city doesn't need more money, it needs to stick to its budget.

rayiner 11y ago
It's not about raising more money, it's about fairly apportioning the tax burden. Why should two homeowners with the same value of property pay different amounts of taxes just because one is old and has owned the house a long time?
- adiabatty 11y ago
  On the other hand, why should your tax bill go up simply because other people are willing to spend increasingly large amounts of money to buy a house like yours? It's not like income tax where your tax bill only goes up when you get more money to pay it with.
  - mahyarm 11y ago
    Because when their own bills go up, they have an incentive to vote for things that bring the cost of housing down. When they don't have to pay for the cost of housing, but instead personally benefit through increased housing value, they will of course vote for it.
  - greeneggs 11y ago
    One can argue that it should be the opposite of an income tax. If the value of your house goes up because you remodel the kitchen, then it seems fair that you should be able to pocket that value. You did the work, so your taxes should not increase. If the value of your house goes up because the government opens a new light rail station nearby, then you did nothing to earn this, so it seems fair that society should be able to get higher taxes from you. In a speculative bubble, you did nothing to earn the extra value, but---arguably!---neither did the government, so it is less clear cut.
    - carboncopy 11y ago
      Agreed. The current system is controversial because there is a dichotomy between what entrenched residents and newcomers pay to that government. I assert it's a problem with a non-trivial solution.
  - mseebach 11y ago
    The thing is, when the tax burden is evenly spread out, it will rise more in step with the amount of money needed by the city (as decided by voters), not so much the price of the house. Indeed, in a (largely mythical, I know) well-run city, the property tax (in pct) should go down as prices rise. Right now, many California cities are broke, and their only way of raising revenues is to soak the newcomers.
  - yason 11y ago
    The taxes should indeed go up to optimize land use in general. If you have a house built in 1902 in the middle of a big city, you're paying minimal taxes and find yourself surrounded by high-rises, it's very inefficient land use. Your lot could provide housing for hundreds if not thousands of people if another high-rise was built there. Thus, you should either pay for your privilege (in taxes) or sell the lot (for a lot of money, presumably) to let other people use the space more efficiently. However, I must say that a property tax itself is a wicked one and should be replaced by land value tax. Land is more valuable in the centre than in the outskirts of the city, so when properly taxed it creates the tendency to increase density of the highly taxed land and allows for more liberal land use where nobody else wants to build.
    - webmaven 11y ago
      So, in what ways is land-value a better taxable asset than property-value?
      - yason 11y ago
        Property value goes up if you build a bigger, better building on your lot so you might as well stick with the old one. That promotes stagnation and under-use: it might not make sense for an individual or a business to give the lot to better use and move further away to enjoy lower taxes if the location is not particularly important. In contrast, land value goes up in the average if a lot of people keep building desirable buildings in what turns out to be a desirable district in the city. That promotes what people like. Consequently, inefficient land uses move further away from the desirable areas. Implementing neither property tax nor land-value tax is not straight-forward in general and there are corner-cases that need to be sorted, but in general land use is what ultimately provides its value. Often property tax codes already incorporate parts of land-value taxing, but the intrinsic value of property to be taxed is debatable: what is the value (to the community) of a small, low-taxed detached house in the downtown versus a huge, high-taxed mansion outside of the city? The opportunity cost of taxing property might be huge.
  - rayiner 11y ago
    Your tax bill doesn't go up just because the value of your house goes up. Your municipality has to vote to spend that extra tax revenue instead of cutting property tax rates. If they do that (and remember old people are the dominant demographic of voters), why shouldn't people pay more?
  - rdlecler1 11y ago
    Your tax value goes up with the value of your asset. There are no free lunches just because you showed up a generation or two earlier.
- Grishnakh 11y ago
  Because the person who has owned the house a long time doesn't have higher income to make up for it, they're likely a retired person on a fixed income. Since you want them to move out so bad, why don't you have the government pay them to move out? I never see these local governments offer to pony up $10k or so for the moving expenses for people priced out of their houses to move out. These people bought a house in a town thinking it'd be a good place to settle down, not that they'd be forced out of their house in a decade or two. It's really no better than forced relocation, which is a form of genocide.
  - oasisbob 11y ago
    I think that's a stretch. Being priced out of a market is not the same thing as genocide. Population transfer is a different thing from gentrification is a different thing from eminent domain is a different thing from genocide.
    - Grishnakh 11y ago
      It's not as extreme, but it is similar. Forcing people out of their homes is usually frowned upon when it's some Natives being forced at gunpoint to pack their stuff and walk across the continent, but somehow when it's old retirees being forced to sell their house just to pay the taxes and then hope to find a new place to live somewhere, where they don't know anyone and are completely unfamiliar, that's somehow OK. It's really the same thing as gentrification, just that it's a different demographic.
msellout 11y ago
Prices don't rise spontaneously (or not exactly). There's increased demand, which usually means more people living and working in the area. Therefore, in fact the cost of policing and everything else does increase.
- Grishnakh 11y ago
  Yes, they do rise spontaneously. There are not more people living and working in the area: the prices of the existing houses have risen, just because of speculation and flipping. It's not like there's more people getting packed into these houses (for the most part). You only get more people living and working in the area if you build more houses. If you do that, then of course you're going to have more property tax, even if the existing house values don't change at all. New houses = new property taxes. That's how you pay for the extra policing, not by soaking the existing residents.
Arnt 11y ago
It does, actually. The police, like all the other things the city does, needs buildings for its work and housing for its employees.
- Grishnakh 11y ago
  No, it doesn't, actually. The police can get their money from the property tax for any new residents who have built new houses. If there's no new houses, then there's no net increase in population, and there's no need for more police, or more police buildings.
  - Arnt 11y ago
    Needs change and buildings age. The City of New York is just building a new police station in an area that's been fully built up for roughly 150 years. http://www.dezeen.com/2016/02/01/big-bjarke-ingles-new-york-police-department-station-nypd-bronx/ http://www.dezeen.com/2016/02/01/big-bjarke-ingles-new-york-... I expect the Vancouver police department also ends up paying its officers extra to cover the boomtown rents. (Not just police, of course. All public services.)
    - Grishnakh 11y ago
      So why do they need more money for this? When my car wears out and I need a new car, I don't go to my boss and say "hey, I need money for a big down-payment on a new car, so I need you to give me a big raise." And then, 5 years later, come back to my boss and say "I need yet another new car, so I need yet another big raise to pay for it." Instead, I save money over time so that when I need that new car, I have the money already saved up for it. In fact, I've saved the money because, over time, my old car has gotten cheaper to own (lower insurance, lower registration fees, loan paid off), and I've budgeted for transportation expenses over all that time so that the new car cost isn't a big surprise. So please explain to me why the existing taxes for police services aren't enough for them to save up and budget and buy new buildings as necessary. As for boomtown rents, that's not a problem either. The boomtown means that property values are skyrocketing, which means that property tax revenues are also skyrocketing, so they're already making more money without even having to raise taxes. So why do they need even more?
jpambrun 11y ago
This is the argument of somebody who is profiting or care deeply about somebody who is profiting from this. 1% is less than the inflation (even more so is the real estate is shooting up), this means that city spending will increase by more than 1% and that other younger citizens will have to pick up the slack.

rayiner 11y ago

It's not about raising more money, it's about fairly apportioning the tax burden. Why should two homeowners with the same value of property pay different amounts of taxes just because one is old and has owned the house a long time?

adiabatty 11y ago
On the other hand, why should your tax bill go up simply because other people are willing to spend increasingly large amounts of money to buy a house like yours? It's not like income tax where your tax bill only goes up when you get more money to pay it with.
- mahyarm 11y ago
  Because when their own bills go up, they have an incentive to vote for things that bring the cost of housing down. When they don't have to pay for the cost of housing, but instead personally benefit through increased housing value, they will of course vote for it.
- greeneggs 11y ago
  One can argue that it should be the opposite of an income tax. If the value of your house goes up because you remodel the kitchen, then it seems fair that you should be able to pocket that value. You did the work, so your taxes should not increase. If the value of your house goes up because the government opens a new light rail station nearby, then you did nothing to earn this, so it seems fair that society should be able to get higher taxes from you. In a speculative bubble, you did nothing to earn the extra value, but---arguably!---neither did the government, so it is less clear cut.
  - carboncopy 11y ago
    Agreed. The current system is controversial because there is a dichotomy between what entrenched residents and newcomers pay to that government. I assert it's a problem with a non-trivial solution.
- mseebach 11y ago
  The thing is, when the tax burden is evenly spread out, it will rise more in step with the amount of money needed by the city (as decided by voters), not so much the price of the house. Indeed, in a (largely mythical, I know) well-run city, the property tax (in pct) should go down as prices rise. Right now, many California cities are broke, and their only way of raising revenues is to soak the newcomers.
- yason 11y ago
  The taxes should indeed go up to optimize land use in general. If you have a house built in 1902 in the middle of a big city, you're paying minimal taxes and find yourself surrounded by high-rises, it's very inefficient land use. Your lot could provide housing for hundreds if not thousands of people if another high-rise was built there. Thus, you should either pay for your privilege (in taxes) or sell the lot (for a lot of money, presumably) to let other people use the space more efficiently. However, I must say that a property tax itself is a wicked one and should be replaced by land value tax. Land is more valuable in the centre than in the outskirts of the city, so when properly taxed it creates the tendency to increase density of the highly taxed land and allows for more liberal land use where nobody else wants to build.
  - webmaven 11y ago
    So, in what ways is land-value a better taxable asset than property-value?
    - yason 11y ago
      Property value goes up if you build a bigger, better building on your lot so you might as well stick with the old one. That promotes stagnation and under-use: it might not make sense for an individual or a business to give the lot to better use and move further away to enjoy lower taxes if the location is not particularly important. In contrast, land value goes up in the average if a lot of people keep building desirable buildings in what turns out to be a desirable district in the city. That promotes what people like. Consequently, inefficient land uses move further away from the desirable areas. Implementing neither property tax nor land-value tax is not straight-forward in general and there are corner-cases that need to be sorted, but in general land use is what ultimately provides its value. Often property tax codes already incorporate parts of land-value taxing, but the intrinsic value of property to be taxed is debatable: what is the value (to the community) of a small, low-taxed detached house in the downtown versus a huge, high-taxed mansion outside of the city? The opportunity cost of taxing property might be huge.
- rayiner 11y ago
  Your tax bill doesn't go up just because the value of your house goes up. Your municipality has to vote to spend that extra tax revenue instead of cutting property tax rates. If they do that (and remember old people are the dominant demographic of voters), why shouldn't people pay more?
- rdlecler1 11y ago
  Your tax value goes up with the value of your asset. There are no free lunches just because you showed up a generation or two earlier.
Grishnakh 11y ago
Because the person who has owned the house a long time doesn't have higher income to make up for it, they're likely a retired person on a fixed income. Since you want them to move out so bad, why don't you have the government pay them to move out? I never see these local governments offer to pony up $10k or so for the moving expenses for people priced out of their houses to move out. These people bought a house in a town thinking it'd be a good place to settle down, not that they'd be forced out of their house in a decade or two. It's really no better than forced relocation, which is a form of genocide.
- oasisbob 11y ago
  I think that's a stretch. Being priced out of a market is not the same thing as genocide. Population transfer is a different thing from gentrification is a different thing from eminent domain is a different thing from genocide.
  - Grishnakh 11y ago
    It's not as extreme, but it is similar. Forcing people out of their homes is usually frowned upon when it's some Natives being forced at gunpoint to pack their stuff and walk across the continent, but somehow when it's old retirees being forced to sell their house just to pay the taxes and then hope to find a new place to live somewhere, where they don't know anyone and are completely unfamiliar, that's somehow OK. It's really the same thing as gentrification, just that it's a different demographic.

msellout 11y ago

Prices don't rise spontaneously (or not exactly). There's increased demand, which usually means more people living and working in the area. Therefore, in fact the cost of policing and everything else does increase.

Grishnakh 11y ago
Yes, they do rise spontaneously. There are not more people living and working in the area: the prices of the existing houses have risen, just because of speculation and flipping. It's not like there's more people getting packed into these houses (for the most part). You only get more people living and working in the area if you build more houses. If you do that, then of course you're going to have more property tax, even if the existing house values don't change at all. New houses = new property taxes. That's how you pay for the extra policing, not by soaking the existing residents.

Arnt 11y ago

It does, actually. The police, like all the other things the city does, needs buildings for its work and housing for its employees.

Grishnakh 11y ago
No, it doesn't, actually. The police can get their money from the property tax for any new residents who have built new houses. If there's no new houses, then there's no net increase in population, and there's no need for more police, or more police buildings.
- Arnt 11y ago
  Needs change and buildings age. The City of New York is just building a new police station in an area that's been fully built up for roughly 150 years. http://www.dezeen.com/2016/02/01/big-bjarke-ingles-new-york-police-department-station-nypd-bronx/ http://www.dezeen.com/2016/02/01/big-bjarke-ingles-new-york-... I expect the Vancouver police department also ends up paying its officers extra to cover the boomtown rents. (Not just police, of course. All public services.)
  - Grishnakh 11y ago
    So why do they need more money for this? When my car wears out and I need a new car, I don't go to my boss and say "hey, I need money for a big down-payment on a new car, so I need you to give me a big raise." And then, 5 years later, come back to my boss and say "I need yet another new car, so I need yet another big raise to pay for it." Instead, I save money over time so that when I need that new car, I have the money already saved up for it. In fact, I've saved the money because, over time, my old car has gotten cheaper to own (lower insurance, lower registration fees, loan paid off), and I've budgeted for transportation expenses over all that time so that the new car cost isn't a big surprise. So please explain to me why the existing taxes for police services aren't enough for them to save up and budget and buy new buildings as necessary. As for boomtown rents, that's not a problem either. The boomtown means that property values are skyrocketing, which means that property tax revenues are also skyrocketing, so they're already making more money without even having to raise taxes. So why do they need even more?

jpambrun 11y ago

This is the argument of somebody who is profiting or care deeply about somebody who is profiting from this. 1% is less than the inflation (even more so is the real estate is shooting up), this means that city spending will increase by more than 1% and that other younger citizens will have to pick up the slack.