4 ms·
> an unproductive investment (property) Why is property unproductive? It produces accommodation, doesn't it?
by MarkMc 10y ago
> an unproductive investment (property)
Why is property unproductive? It produces accommodation, doesn't it?
- closeparen 10y agoInvesting in land doesn't make more land. Rising land values don't even produce taller buildings, since zoning and neighbors work to preserve the character of neighborhoods. Investing in manufacturing companies makes more factories.
- Sargos 10y agoRaising land values does in fact produce taller buildings. HIgh land value means land is either scarce or very attractive. With high land value it makes more sense to make a two story building on one plot of land rather than a one story building on two plots of land. That's even in the face of NIMBY neighbors since builders must deal with that no matter what.
- bufordsharkley 10y agoRising land values don't produce taller buildings when landowners don't feel the pain of rising land values (see: Prop 13). A very efficient tax is the land value tax: by untaxing the improvements on land and taxing the land values more heavily, you incentivize efficiency.