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The author’s main point seems to be that in a market dominated by landlords in which rents are rising, cities do not have an incentive to improve public service
by ramphastidae 8y ago
The author’s main point seems to be that in a market dominated by landlords in which rents are rising, cities do not have an incentive to improve public services as any improvement in their quality will only benefit landlords through further increases in housing prices.
Am I missing something, or wouldn’t higher tax revenues from growing property values easily offset this issue in such a scenario?
- thomasahle 8y agoHigher tax revenues does not offset the problem of increases in housing prices. You may say that housing prices is not a problem, and cities should just lean into it an keep improving public service, but if they are trying to reduce housing prices thst might be counter productive.
- lordalch 8y agoThis is why California's property tax system, in which taxes don't increase until a property is sold, is often cited as a major factor in its housing dilemma.
- timerol 8y agoTo be pedantic, 1978 California Proposition 13 (Prop 13) limits property tax increases to a max of 2% per year. In the decades since, especially in areas with high growth, the overall tax being paid on property has become a tiny percentage of the property value. This tax is reset to a reasonable rate when significant construction or a sale happens.
- georgeecollins 8y agoCan't stress often enough the problem that the unintended consequences of this bill have caused. Most people that voted for it though it would just limit the increase of property taxes on homes. They didn't realize it affected warehouses, factories, etc. It's a mess that has to be changed.
- mcguire 8y agoIf I remember my government class, it was primarily backed by the owners of multifamily rental property. While most single family houses at the time changed hands every few years, apartment buildings were typically kept for decades.
- sampo 8y ago> wouldn’t higher tax revenues from growing property values easily offset this issue in such a scenario? If the tax values indeed follow the actual property values. And if the country/city has a sufficiently high property tax percentage. Some places have only tiny property taxes.
- C1sc0cat 8y agoCompare the UK where a 20+ Million £ mansion on ambassadors row pays a few thousand pounds in council tax.
- sampo 8y agoPer month or per year?
- Khol 8y agoCouncil tax on the most expensive property (band H) in kensington and chelsea is £2,246.14 in 2018/2019. Westminster would be £1421.00. Council tax for my band C property in south gloucester was around £1700, with the highest (band H) in the area being around £3800. All numbers yearly.
- jen20 8y agoThe difference is what that funds. In the UK, council tax is intended to fund things like rubbish removal. In the US, property tax funds schools. Other taxes make up for the low “property” tax in the UK (property in quotes because renters pay it directly too - it is an occupancy tax not an ownership tax)
- sampo 8y agoProperty taxes should be relative high, so the city gets their part of the increasing land value when the city grows. So that land owners get to collect only a small-ish part of the windfall of the increased value. It is, after all, the city that made the land more valuable by building more city around it.