7 ms·

How do supporters of the UBI deal with the real estate valuation problem? It seems that assets that are highly immobile and have elasticity that is directly pro

by gburt 10y ago

How do supporters of the UBI deal with the real estate valuation problem? It seems that assets that are highly immobile and have elasticity that is directly proportional to income would eat up all or almost all of the transfer. It is possible that there is a counterbalancing effect of people being able to live outside of the big city, but I still suspect a form of "minimum rent" would arise in the case there was a UBI and the whole transfer would end up consolidating with a few landlords.

mc32 10y ago
Maybe you make UBI an income guarantee rather than a right to live in a given place guarantee. In such a structure the state could incentivize moving to areas which are losing population, such as Midwestern rustbelt cities and towns in the US, or any place not the MDF in MX or the Ruhr valley in DE, etc.
- ghaff 10y ago
  Any remotely rational policy would not try to adjust subsidies to enable living in luxury locations. No, you're not going to be able to live in San Francisco. You'll be able to (barely) afford a crappy apartment in Detroit.
- kylebgorman 10y ago
  I don't think we should incentivize moving to such places unless we plan to also (somehow) massively increase the opportunities available in such places.
  - mc32 10y ago
    Isn't the whole idea of UBI that it's subsidizing the lack of good jobs for people who for one reason or another can't land decent jobs? I don't see why someone who isn't being overly productive also needs to live in a location where one could use more productive people. In other words if a mill worker's site shutdown and this person now depends solely on UBI I don't see why they should feel like they should afford some place in the closest big city if they don't get a job since their active addition to productivity is nil. If they get a job then they may or may not afford a place in that city. Still, it's not "owed" anyone.
  - dllthomas 10y ago
    > plan to also (somehow) massively increase the opportunities available in such places. The incentive itself does this. First, there's the "opportunity" of living on the UBI - not a great option but more than there was before. Second, there's the opportunity of meeting the needs of the other people moving to such places, as well as those who lived there before (with their increased ability to pay). And this leaves aside the fact that an increasing number of opportunities are not inherently tied to location.
- dragonwriter 10y ago
  UBI, by definition, is an fixed, unconditional, income. If it's need-tested (such as scaling by a formula taking into account local cost of living) it's not a UBI, it's a conditional, needs-treated welfare program. UBI is specifically intended to dodge bureaucratic overhead by avoiding means-, needs-, and behavior-testing common in existing welfare programs. So the "alternative" you propose is actually what a UBI is by definition.
  - mc32 10y ago
    Start its implementation in economically depressed regions first.
    - dragonwriter 10y ago
      Unnecessary complication. If you do it generally, it'll matter more and go further in depressed regions on it's own. Line drawing exercises are unnecessary and counterproductive.
ktRolster 10y ago
Build more houses. Here's the graph that really makes it clear: https://pbs.twimg.com/media/CgXjY3cWIAAVfCM.jpg https://pbs.twimg.com/media/CgXjY3cWIAAVfCM.jpg
- ghaff 10y ago
  That graph makes it clear that there are a whole lot of relatively low cost areas that, one would assume, don't have much of a housing shortage and a relatively small number of cities where housing costs are high to very high. Presumably people who don't have a specific, often employment-related, reason to live in one of those high-cost areas would not do so.
  - Retric 10y ago
    A fixed UBI makes moving to low cost areas very appealing. This lowers housing prices in the hot spots and raises wages in high cost areas. Net results city's become less packed and far more affordable.
  - ktRolster 10y ago
    The graph makes it clear that no high-cost area has built many houses recently.
dragonwriter 10y ago
There's no evidence I've seen that the supply curve for housing has the properties you describe; as I see it, the original you describe simply doesn't exist in that form.
bufordsharkley 10y ago
Land Value Tax, of course. The UBI is unthinkable without it.
- dredmorbius 10y ago
  What's the mechanism by which the LVT (Georgian Tax) prevents rent / property value escallation?
  - notahacker 10y ago
    Theoretically, if increases in the value of a site are taxed at very high marginal rates, landowners have a lot of incentive to increase the supply of housing to be able to actually gain any benefit from the increase in demand.
    - norea-armozel 10y ago
      Also, I would like to point out that any property improvements themselves don't get factored into the land value tax itself. Properly, a land value tax is a response to the value of the land itself (where you're literally just buying a plot sans any external improvements). So, demand for land itself sets the bar for the tax. If a plot is $100 today but doubles to $200 dollars the tax should (on a curve or however it's computed) increase thusly. But if you improve the property on the land like adding better windows to your home or solar panels those improvements don't factor into the tax. Thus, it incentivizes you to keep adding to the property value without the current penalties of the property tax system we have today.
    - dragonwriter 10y ago
      No, if increases in value of landholdings are taxed at a high rate, than landholders have a lot of incentive to invest their surplus revenues in non-land assets whose appreciation is not so highly taxed.
      - bufordsharkley 10y ago
        What are these assets? Surely not most capital, which depreciates rapidly. The only assets that would apply would be: * Intellectual property (patents and copyrights). This would be a problem, but only to an extent-- there isn't such an inelastic demand on the return of IP as there is on housing stock. * Picassos, etc. This, while true, isn't especially relevant. Is there something you're getting at that I'm missing here?
adrianN 10y ago
If people don't have to work, it becomes a lot less appealing to live in places where rents are super high. That might counterbalance some of the effect.
- deleted 10y ago
  [deleted]

by gburt 10y ago

mc32 10y ago

Maybe you make UBI an income guarantee rather than a right to live in a given place guarantee. In such a structure the state could incentivize moving to areas which are losing population, such as Midwestern rustbelt cities and towns in the US, or any place not the MDF in MX or the Ruhr valley in DE, etc.

ghaff 10y ago
Any remotely rational policy would not try to adjust subsidies to enable living in luxury locations. No, you're not going to be able to live in San Francisco. You'll be able to (barely) afford a crappy apartment in Detroit.
kylebgorman 10y ago
I don't think we should incentivize moving to such places unless we plan to also (somehow) massively increase the opportunities available in such places.
- mc32 10y ago
  Isn't the whole idea of UBI that it's subsidizing the lack of good jobs for people who for one reason or another can't land decent jobs? I don't see why someone who isn't being overly productive also needs to live in a location where one could use more productive people. In other words if a mill worker's site shutdown and this person now depends solely on UBI I don't see why they should feel like they should afford some place in the closest big city if they don't get a job since their active addition to productivity is nil. If they get a job then they may or may not afford a place in that city. Still, it's not "owed" anyone.
- dllthomas 10y ago
  > plan to also (somehow) massively increase the opportunities available in such places. The incentive itself does this. First, there's the "opportunity" of living on the UBI - not a great option but more than there was before. Second, there's the opportunity of meeting the needs of the other people moving to such places, as well as those who lived there before (with their increased ability to pay). And this leaves aside the fact that an increasing number of opportunities are not inherently tied to location.
dragonwriter 10y ago
UBI, by definition, is an fixed, unconditional, income. If it's need-tested (such as scaling by a formula taking into account local cost of living) it's not a UBI, it's a conditional, needs-treated welfare program. UBI is specifically intended to dodge bureaucratic overhead by avoiding means-, needs-, and behavior-testing common in existing welfare programs. So the "alternative" you propose is actually what a UBI is by definition.
- mc32 10y ago
  Start its implementation in economically depressed regions first.
  - dragonwriter 10y ago
    Unnecessary complication. If you do it generally, it'll matter more and go further in depressed regions on it's own. Line drawing exercises are unnecessary and counterproductive.

ktRolster 10y ago

Build more houses. Here's the graph that really makes it clear: https://pbs.twimg.com/media/CgXjY3cWIAAVfCM.jpg https://pbs.twimg.com/media/CgXjY3cWIAAVfCM.jpg

ghaff 10y ago
That graph makes it clear that there are a whole lot of relatively low cost areas that, one would assume, don't have much of a housing shortage and a relatively small number of cities where housing costs are high to very high. Presumably people who don't have a specific, often employment-related, reason to live in one of those high-cost areas would not do so.
- Retric 10y ago
  A fixed UBI makes moving to low cost areas very appealing. This lowers housing prices in the hot spots and raises wages in high cost areas. Net results city's become less packed and far more affordable.
- ktRolster 10y ago
  The graph makes it clear that no high-cost area has built many houses recently.

dragonwriter 10y ago

There's no evidence I've seen that the supply curve for housing has the properties you describe; as I see it, the original you describe simply doesn't exist in that form.

bufordsharkley 10y ago

Land Value Tax, of course. The UBI is unthinkable without it.

dredmorbius 10y ago
What's the mechanism by which the LVT (Georgian Tax) prevents rent / property value escallation?
- notahacker 10y ago
  Theoretically, if increases in the value of a site are taxed at very high marginal rates, landowners have a lot of incentive to increase the supply of housing to be able to actually gain any benefit from the increase in demand.
  - norea-armozel 10y ago
    Also, I would like to point out that any property improvements themselves don't get factored into the land value tax itself. Properly, a land value tax is a response to the value of the land itself (where you're literally just buying a plot sans any external improvements). So, demand for land itself sets the bar for the tax. If a plot is $100 today but doubles to $200 dollars the tax should (on a curve or however it's computed) increase thusly. But if you improve the property on the land like adding better windows to your home or solar panels those improvements don't factor into the tax. Thus, it incentivizes you to keep adding to the property value without the current penalties of the property tax system we have today.
  - dragonwriter 10y ago
    No, if increases in value of landholdings are taxed at a high rate, than landholders have a lot of incentive to invest their surplus revenues in non-land assets whose appreciation is not so highly taxed.
    - bufordsharkley 10y ago
      What are these assets? Surely not most capital, which depreciates rapidly. The only assets that would apply would be: * Intellectual property (patents and copyrights). This would be a problem, but only to an extent-- there isn't such an inelastic demand on the return of IP as there is on housing stock. * Picassos, etc. This, while true, isn't especially relevant. Is there something you're getting at that I'm missing here?

adrianN 10y ago

If people don't have to work, it becomes a lot less appealing to live in places where rents are super high. That might counterbalance some of the effect.

deleted 10y ago
[deleted]