6 ms·
If the problem is that too much capital is flowing from productive investments, like tech, to unproductive land speculation then perhaps part of the solution is
by pgreenwood 7y ago
If the problem is that too much capital is flowing from productive investments, like tech, to unproductive land speculation then perhaps part of the solution is to capture part of that windfall gain through a land value tax [1], i.e. a tax on just the land and not the buildings, thereby reducing the speculative component from housing investment without reducing incentive to develop more housing stock.
[1] https://en.m.wikipedia.org/wiki/Land_value_tax https://en.m.wikipedia.org/wiki/Land_value_tax
- buss 7y agoYou're right that a LVT would help, but the existing regulations prevent people from actually redeveloping their land into more productive uses. When it's illegal to build apartments in over 70% of San Francisco, that's the first and lowest hanging fruit to pick.
- pgreenwood 7y agoI agree restrictive regulation are a major part of the problem. But LVT would have the effect of reducing prices even if stock were not increased, leaving rents unaffected.
- qwhelan 7y agoLVT is illegal in California due to Prop 13, so you'd need a constitutional amendment to even consider it.
- rcpt 7y agoWell let's get one then. Is it really that hard to put it on the ballot every 2 years? Only needs to pass once to undo 40 years of damage.
- acdha 7y agoI was born around the time prop 13 passed and it wasn’t until I was in my twenties that I realized _why_ everything had been obviously built like an affluent society but crumbling due to lack of maintenance for as long as I’d been aware of it. One memory in particular was when the San Diego Union Tribune ran a picture of new computers from one of those supermarket programs, sitting under a hole in the roof because the district had been underfunded on maintenance for three decades.
- wasdfff 7y agoBuilding maintenace is the most readily glaring, but by far the worst aspect of prop 13 passing is how much school districts were and still are defunded. Untold damage to 40 years of students.
- acdha 7y agoI’m also curious how it’ll work for hiring new teachers: they’re usually offered worse wages than the retiring boomers saw at the same point in their careers and the housing market is much worse.
- Decade 7y agoIt’s working poorly. All the school districts near me have chronic teacher shortages, and there’s tremendous teacher turnover. Occasionally a teacher will go homeless before leaving for a district with lower cost of living. A prominent neighborhood activist has switched from NIMBY to YIMBY because his wife was recruited on an emergency basis to teach high school English without a teaching certificate, and has been teaching for the past several years. All the teachers I know of my age are living either with parents or with their parents’ financial assistance. The one mitigating factor is that young parents are having difficulty affording this region, so schools are starting to close and not need any teachers anymore.
- deleted 7y ago[deleted]
- wasdfff 7y agoWhen a bungalow from 1940 sells for 1.1m in santa monica, its not because that bungalow is plated with gold, but because you can destroy the bungalow and build on that plot in santa monica. All of the inflated values of houses in ca is due to the parcel and not the structure already. A house might only be 200k, but the dirt it sits on is worth 900k. Prop13 really needs to go away. It chronically defunded local government and schools for almost 50 years and directly brought us to the crisis where we are at today.