7 ms·

Here's the biggest objection, that would hold true for many expensive areas of the Western world, and any policy that will dramatically increase the supply of r

• leetcrew 7y ago
  I tend to lean libertarian on most issues, but I am starting to think it just doesn't make very much sense for people to own land privately. it's one of the only things in the world that is truly scarce (ie, you can't make more plots in the upper east side), and the value of land tends to be based much more on improvements to the surrounding area than improvements to the land itself. also, land ownership seems to lead to all sorts of perverse incentives to lobby for laws that distort the housing market. sometimes I wonder if it wouldn't be better to take a snapshot of all property values at a certain point in time, pay out the owners at the current value, and switch land over exclusively to long term leases from the government (where the lessee is allowed to sublet).
  • amalcon 7y ago
    I've heard the argument that this is what property taxes are (usually as means to oppose property taxes). What practical thing would you expect to change, that's different from just raising property taxes?
    • leetcrew 7y ago
      you don't get to resell the land when you're done with it, so it loses its value as a speculative investment. also the government gets a window whenever the lease ends to decide to do something else with the land (eg, build a train station).
      • amalcon 7y ago
        I guess it depends on the term of the lease. You do get to sub-lease the land when you're done with it. The terms could even include an up-front cash payment that looks not dissimilar to a sale. This creates some value as a speculative investment, depending on how long the lease is going to last.
        • leetcrew 7y ago
          > The terms could even include an up-front cash payment that looks not dissimilar to a sale. that's an interesting point. whether or not they structure it as an upfront payment, there's still an opportunity for people to grab a ton of leases, do nothing with the land, and essentially arbitrage the government rent. I guess you couldn't really eliminate this behavior, but you could limit it by the shortening the length of the lease term. of course, if the term is too short and the government is free to pick a different lessee next, it might be uneconomic to actually build anything.
  • schoen 7y ago
    An alternative that some libertarians seem to like is the land value tax, as proposed by Henry George. https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax It has the problem that if you think existing property rights in land are legitimate, instituting it looks like a massive expropriation. Also, you can't avoid getting priced out of your home by buying it. It apparently has some pretty large economic efficiency and incentive benefits.
    • wolco 7y ago
      But then the goal is to run down property values so investment stops.
      • schoen 7y ago
        Whose goal?
    • leetcrew 7y ago
      LVT was part of the inspiration for this idea. > Also, you can't avoid getting priced out of your home by buying it. this is part of what I was getting at in the "land is one of the only truly scarce things" bit. I don't think the expectation that you should be able to afford to live on a specific piece of land forever is reasonable.
      • CydeWeys 7y ago
        Plenty of people who rent even have that expectation, which I find completely unreasonable.
  • wolco 7y ago
    Private ownership pushes the cost of upkeep to the property owner and charges them a yearly fee. I'm not sure society could afford to maintain those properties while cities lose their taxation ability. It also anchors a person to society forces them to partipate.
    • leetcrew 7y ago
      I'm not suggesting the city becomes a landlord and starts renting out apartments to people. I'm suggesting the city owns the land, you lease the land for something like twenty or fifty years and do what you want with it. next lessee gets to decide what they want to do with whatever you built there.
      • beerandt 7y ago
        I get what you're saying in theory. But in practice, that's essentially no different than the simple fee system most places have today, with the exception of forcing land to be re-sold at some set interval. (Unless you're advocating for a method of distribution / allocation other than highest bidder.) What most people consider ownership is really just leasing from the state via yearly property tax values. What you're suggesting would only increase property values further. It's a similar mechanism that fuels "gentrification."
  • bluGill 7y ago
    That is what we already have. Land values are the price to change the lease from one person to another.
    • leetcrew 7y ago
      you can certainly look at it that way, but the cost to change the lease is way bigger than the "rent". I'm also implying that you shouldn't be taxed on improvements you make to the land (like building a house). you pay for occupancy of the land itself and for any services consumed.
      • nybble41 7y ago
        I'm perfectly fine with the idea of a "land value tax" so long as the value of unimproved land is properly assessed: it is only use by humans that gives land economic value, so the value of unimproved land is zero. Feel free to multiply that by whatever rate you see fit.
        • leetcrew 7y ago
          imagine you have a single acre of dirt in the middle of the financial district in Manhattan. even if you aren't using it yourself, you really think the value of that land is zero? the fact that you aren't currently using the land for anything doesn't mean someone else couldn't use it for something extremely valuable. you are keeping that land idle at a massive opportunity cost. on the flip side, if you have a huge plot of land out in North Dakota, the tax may well be close to zero.
          • nybble41 7y ago
            > the fact that you aren't currently using the land for anything doesn't mean someone else couldn't use it for something extremely valuable That (speculative) value is based on how they propose to use the land. In other words, their improvements. That acre of dirt in the middle of the financial district might as well not exist, in economic terms, until someone actually builds something on it or otherwise starts using it to satisfy human needs or wants. Put another way, say that acre of land is on the other side of an impassable barrier. It's exactly the same land, but no one can get to it to make use of it. What is its value now? The value comes from how the land is used, not the land itself. If you're proposing to base the tax on what others would be willing to pay for the land (the market value) then this is no longer a land value tax but rather a property tax.
  • isostatic 7y ago
    A land value tax, where you pay for the value of the land. Society builds a new subway stations near you, and land increases 20%, you pay 20% more tax. Society puts a power plant on your doorstep, land drops 40%, and you pay 40% less tax. What you do with that land is irrelevent - you pay the same whether you have a small house on a 15 story building on it.
    • war1025 7y ago
      Isn't that exactly what property taxes currently are?
      • deleted 7y ago
        [deleted]
      • leetcrew 7y ago
        no? if you renovate your house in a way that increases the value of the structure, you will pay more tax. under LVT, you only pay more tax when the land itself increases in value. that's how the tax gets its name.
        • deleted 7y ago
          [deleted]
        • war1025 7y ago
          My property taxes are a combination of both land value and dwelling value. So property tax is a superset of land value tax (at least here in Iowa). My understanding is that this is all screwed up in California because there are restrictions on how much your taxes can go up each year. So it's not an issue of needing an additional tax, it's just a matter of needing to un-break California's property tax system.
          • leetcrew 7y ago
            I personally don't know enough econ to know whether LVT is actually a good idea, but intuitively it makes sense to me. the basic objection to property tax as it currently exists is that it penalizes you for improving your property. at the margin, this creates a perverse incentive to let housing stock degrade or even leave whole lots unused. in general LVT advocates want it to replace traditional property taxes, no be added alongside them. the claim is that, for a target tax revenue, LVT can raise the funds much more efficiently. as for California, the problem with their tax system is outside the scope of LVT vs traditional property tax. they have land with massive valuations but get relatively little revenue out of it due to extremely low grandfathered rates.
• dsalzman 7y ago
  I think the property values directly near this area would dramatically increase. The development of this 50 square mile area would also take 10-20 years and be completed in many phases. Most large property developers manage lots this way in order to manage pricing.
• whiddershins 7y ago
  So pay out those people! They have a legitimate concern, just not one that should stop anything new from ever happening. Although I think, based on experience and intuition mixed with logic, most nearby property values would actually go up.
  • defterGoose 7y ago
    >So pay out those people! If you give a mouse a cookie...
    • Spivak 7y ago
      If you’re talking about owners holding out for huge sums of money then honestly good for them. They clearly know the value of the land to the developer and ought to have every right to squeeze.
• 6gvONxR4sf7o 7y ago
  >"I own property here, and if we do this, the value of my property will fall. Therefore, we shouldn't do it". Everyone acts like this is about value as money, but it isn't. The value comes from a variety of factors. If you started pouring sewage into my bedroom, you can bet the value of my place is going to fall, and that's why I'd be strongly opposed to it, but it's not about the money. The dollar value would fall because it'd make it a worse place to live, which is the real cause of the objections. The dollar value going down is (often) a symptom, not a cause.