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I live in Toronto. It is mind-blowing the number of condos being built. More are in progress now here than exist on Manhattan. But as far as world cities go, th

by nibs 10y ago

I live in Toronto. It is mind-blowing the number of condos being built. More are in progress now here than exist on Manhattan. But as far as world cities go, the condos and rent are both very affordable. So I think to a certain extent it does work to build more, but it is not 1:1, and lots of people come here because of the (relative) affordability.

bufordsharkley 10y ago
It's a reminder that we have a prisoner's dilemma on our hands: if one city fixes things, they share an disproportionate burden of the load that will follow. Real success will only happen if everybody coordinates on better land-use policy. The likely outcome is that they won't, and here we are.
- Agustus 10y ago
  What kind of land-use policy are you proposing and how will it be kept out of the hands of politicians who abuse it for their own personal gain?
  - bufordsharkley 10y ago
    My ideal reform would be the Land Value Tax[0], which admittedly has run into problems in execution with poor implementations. It depends upon assessments on land value that reflect current market value of that land. In one notable case of the LVT in practice (Pittsburgh), assessors made a real hash of it, with assessments well out of proportion to market demand. I would like to see a proof of concept to fix this, mainly an automated algorithmic assessment map of land values, based off of public sales records. It's a fun project to attempt; I should start up a repo some time. [0] https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax
    - dragonwriter 10y ago
      The problem with using sales records for LVT is the central concept of LVT is that it's based on unimproved value, and actual sales of land usually include improvements and separating out there unimproved value is non-trivial and hard to validate.
      - bufordsharkley 10y ago
        Yes, that's the challenge. But with some assumptions (within an urban area, neighboring plots have about the same land value; when a plot is sold at two different times, the difference in the prices may reflect the rise in land value), one could get some reasonable estimates.
        amazon_not 10y ago
        Waiting for a plot to be sold may take too long. How about an auction based pricing model? Property owner declares land value and pays tax based on that value. Taxman has checks and balances to make sure that the declared land value isn't egregiously low balled. The declared land value is made public and anybody can make an offer to buy the land at that value plus a premium. If the offer is accepted, all is good and we have a new declared land value. If the offer is declined, a new declared land value is set at the offer price. The owner pays an additional tax to reflect the new declared value and a penalty if it is found that the old declared land value was (significantly) below prevailing land values. The trick is in setting the penalty in such a way that it becomes unappealing to declare less than fair market value. The risk is that declared market value is unduly inflated to protect against the penalty, but the property owners self interest in paying the least amount of taxes should protect against that. Also applying a (small) fudge factor to the acceptable fair market value when the penalty does not apply should help. Markets do move and there is no need to (harshly) penalize normal appreciation and market developments.
        bufordsharkley 10y ago
        I've thought about something like this-- self-assessment seems very promising. Two notes: * If a person's offer is accepted to buy their land, we need to figure out how to agree upon the price of the improvements, too. I could imagine a system of arbitrators being useful here. * People's natural loss-aversion would be a problem here-- one would expect a person to overstate the worth of their land by 50% or so.
deleted 10y ago
[deleted]

by nibs 10y ago

bufordsharkley 10y ago

It's a reminder that we have a prisoner's dilemma on our hands: if one city fixes things, they share an disproportionate burden of the load that will follow. Real success will only happen if everybody coordinates on better land-use policy. The likely outcome is that they won't, and here we are.

Agustus 10y ago
What kind of land-use policy are you proposing and how will it be kept out of the hands of politicians who abuse it for their own personal gain?
- bufordsharkley 10y ago
  My ideal reform would be the Land Value Tax[0], which admittedly has run into problems in execution with poor implementations. It depends upon assessments on land value that reflect current market value of that land. In one notable case of the LVT in practice (Pittsburgh), assessors made a real hash of it, with assessments well out of proportion to market demand. I would like to see a proof of concept to fix this, mainly an automated algorithmic assessment map of land values, based off of public sales records. It's a fun project to attempt; I should start up a repo some time. [0] https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax
  - dragonwriter 10y ago
    The problem with using sales records for LVT is the central concept of LVT is that it's based on unimproved value, and actual sales of land usually include improvements and separating out there unimproved value is non-trivial and hard to validate.
    - bufordsharkley 10y ago
      Yes, that's the challenge. But with some assumptions (within an urban area, neighboring plots have about the same land value; when a plot is sold at two different times, the difference in the prices may reflect the rise in land value), one could get some reasonable estimates.
      - amazon_not 10y ago
        Waiting for a plot to be sold may take too long. How about an auction based pricing model? Property owner declares land value and pays tax based on that value. Taxman has checks and balances to make sure that the declared land value isn't egregiously low balled. The declared land value is made public and anybody can make an offer to buy the land at that value plus a premium. If the offer is accepted, all is good and we have a new declared land value. If the offer is declined, a new declared land value is set at the offer price. The owner pays an additional tax to reflect the new declared value and a penalty if it is found that the old declared land value was (significantly) below prevailing land values. The trick is in setting the penalty in such a way that it becomes unappealing to declare less than fair market value. The risk is that declared market value is unduly inflated to protect against the penalty, but the property owners self interest in paying the least amount of taxes should protect against that. Also applying a (small) fudge factor to the acceptable fair market value when the penalty does not apply should help. Markets do move and there is no need to (harshly) penalize normal appreciation and market developments.
        bufordsharkley 10y ago
        I've thought about something like this-- self-assessment seems very promising. Two notes: * If a person's offer is accepted to buy their land, we need to figure out how to agree upon the price of the improvements, too. I could imagine a system of arbitrators being useful here. * People's natural loss-aversion would be a problem here-- one would expect a person to overstate the worth of their land by 50% or so.

deleted 10y ago

[deleted]