4 ms·

Perhaps not coincidentally, almost all of the increased land rent that comes with increased density is captured by the Singaporean state, since it is the ultima

Perhaps not coincidentally, almost all of the increased land rent that comes with increased density is captured by the Singaporean state, since it is the ultimate landowner ("privately owned" land is actually leased from the state on a 99 year basis). This means that as an area becomes more desirable, more people move there, land rent goes up, and the state earns more and more capital to build/maintain infrastructure and bureaucracy that is proportional to its population. Contrast with the Bay Area (only used as an exemplar of basically all of America/the western world), which is full of extraordinarily wealthy people paying enormous rents to live under a dysfunctional government with a budgetary shortfall of $6.3B. It appears that high Singaporean rents go back into paying for a society worth living in, while high San Franciscan rents go into the pockets of a handful of landlords (who of course contributed nothing to San Francisco's explosion of productivity over the last few decades).

jbc1 7y ago
That's really interesting. So Singapore basically has almost a georgist type thing going on? Do they collect much revenue in other ways or just predominantly rely on rent?
- eru 7y ago
  It's not that Georgist in practice. See https://www.iras.gov.sg/irashome/Annual-Reports/Corporate-Information-and-Highlights/Our-Revenue-Collection/ https://www.iras.gov.sg/irashome/Annual-Reports/Corporate-In... for where government revenue comes from. Income taxes provide more than taxes connected to land. Singapore is however probably the closest thing you can find to an implementation of orthodox economics' prescriptions. (Especially since Hong Kong introduced minimum wage laws.)
eru 7y ago
I'm not sure if the 99 years aren't too long for that too bite properly. Modern Singapore is less than 60 years old. I'd buy the logic more, if the leases were for eg 10 years at a time. (Or if there were charging a land value tax.) But do see https://www.iras.gov.sg/irashome/Property/Property-owners/Working-out-your-taxes/Property-Tax-Rates-and-Sample-Calculations/ https://www.iras.gov.sg/irashome/Property/Property-owners/Wo... Singapore is an outlier in so many ways, it's hard to say what essential and what's accidental when comparing to eg California. For example, NIMBYs seem to have almost no power here. In return for putting up with construction sites everywhere all the time, we get fancy modern infrastructure. And between 2012 and now, residential rents seem to have come down by about a quarter. Mostly because much more housing supply came online.
- ethanbond 7y ago
  Yeah, it's hard to disaggregate causality here and this picture might change over time. Given the state of most western metropolises, though, it's worth considering whether we want to be highly paid sharecroppers forever.
  - eru 7y ago
    Well, in economic analysis, we can always separate the roles of landowner and sharecropper. If we have to have any government, then we need to finance that government. Given the government the role of landowner and renting out the land to the highest bidder is the least bad way we know to do that financing. (That's what Georgism is all about.) If you buy land (and there's not a huge property tax or land value tax), than you are sharecropper and landowner in personal union. But the price you paid for the land was just the capitalised present value of those future land rents. So you don't even get much out of owning the land. In equilibrium, you could have invested in other assets just as well. In any case, I like living in Singapore. And I especially like that I don't have to buy an owner-occupied home to avoid capital gains taxes, like in most other countries.
    - ethanbond 7y ago
      Absolutely. To clarify my above statement (can't edit), the "we" in my comment "it's worth considering whether we want to be highly paid sharecroppers forever," is referring to we Americans/westerners/who do not live in a Georgist-like state.
      - eru 7y ago
        https://www.iras.gov.sg/irashome/Annual-Reports/Corporate-Information-and-Highlights/Our-Revenue-Collection/ https://www.iras.gov.sg/irashome/Annual-Reports/Corporate-In... says that Singapore isn't that Georgist. At least on the face of it, when measured by where the tax take comes from. Living here, I think we could levy a land value tax, and decrease eg person income taxes or VAT. But I can't complain too much in practice.
madengr 7y ago
It’s a whole different argument as to San Francisco productiveness. Is twitter productive? I’d call it a waste of time.
- ethanbond 7y ago
  I absolutely agree. "Productivity" in my comment means that it creates/accrues capital.
- eru 7y ago
  When someone uses a term without qualification, it's a reasonable first assumption to go with the meaning of the corresponding Wikipedia article, like https://en.wikipedia.org/wiki/Productivity https://en.wikipedia.org/wiki/Productivity Productivity is a technical term in economics. It connects to people's subjective judgement in the aggregate (ie San Francisco is only considered productive if people want what they produce) but doesn't care that one person in particular doesn't like what they do. For comparison, I don't like 'Light Beer', but a big brewery figuring out how to make more Light Beer from less malts still counts as a productivity improvement.
Faark 7y ago
This sounds a lot like how this Vox video [0] describes the situation in Hong Kong. Except without the intentionally established scarcity to keep prices and thus gov revenue up, leading to shitty living conditions. I'm not sure there is a way to perfectly set up incentives in the first place. The more important aspect seems to be culture: public officials actually wanting to serve the citizens & do good. [0] https://youtu.be/hLrFyjGZ9NU?t=173 https://youtu.be/hLrFyjGZ9NU?t=173
dragonwriter 7y ago
> which is full of extraordinarily wealthy people paying enormous rents to live under a dysfunctional government with a budgetary shortfall of $6.3B. The state has a large surplus and the City and County of San Francisco has a projected deficit of an order of magnitude less than that amount, and the US budget deficit is on the rough scale of two orders of magnitude larger. What dysfunctional government are you referring to?
- ethanbond 7y ago
  Ah, sorry about that. Late night commenting is never advisable. I was taking this number from here (https://www.statedatalab.org/state_data_and_comparisons/city/sanfrancisco https://www.statedatalab.org/state_data_and_comparisons/city...) and is actually meant to be the debt rather than a budget deficit. Looking into the source more it seems like it may not be the best (link: https://www.sourcewatch.org/index.php/Truth_in_Accounting https://www.sourcewatch.org/index.php/Truth_in_Accounting). From the voter information pamphlet (link: https://voterguide.sfelections.org/en/overview-san-francisco%E2%80%99s-debt https://voterguide.sfelections.org/en/overview-san-francisco...) it appears that official figures for the city's debt is in the $2.29B range, not including "the San Francisco Community College District, San Francisco Unified School District, and Bay Area Rapid Transit District (BART)." I revise my above statement to "[San Francisco] is full of extraordinarily wealthy people paying enormous rents to live under a dysfunctional government with a city debt of at least $2.29B." In any case, even if San Francisco had zero debt, it would still be a dysfunctional government. One need only walk through the Mission to see that.

jbc1 7y ago

That's really interesting. So Singapore basically has almost a georgist type thing going on? Do they collect much revenue in other ways or just predominantly rely on rent?

eru 7y ago
It's not that Georgist in practice. See https://www.iras.gov.sg/irashome/Annual-Reports/Corporate-Information-and-Highlights/Our-Revenue-Collection/ https://www.iras.gov.sg/irashome/Annual-Reports/Corporate-In... for where government revenue comes from. Income taxes provide more than taxes connected to land. Singapore is however probably the closest thing you can find to an implementation of orthodox economics' prescriptions. (Especially since Hong Kong introduced minimum wage laws.)

eru 7y ago

I'm not sure if the 99 years aren't too long for that too bite properly. Modern Singapore is less than 60 years old. I'd buy the logic more, if the leases were for eg 10 years at a time. (Or if there were charging a land value tax.) But do see https://www.iras.gov.sg/irashome/Property/Property-owners/Working-out-your-taxes/Property-Tax-Rates-and-Sample-Calculations/ https://www.iras.gov.sg/irashome/Property/Property-owners/Wo... Singapore is an outlier in so many ways, it's hard to say what essential and what's accidental when comparing to eg California. For example, NIMBYs seem to have almost no power here. In return for putting up with construction sites everywhere all the time, we get fancy modern infrastructure. And between 2012 and now, residential rents seem to have come down by about a quarter. Mostly because much more housing supply came online.

ethanbond 7y ago
Yeah, it's hard to disaggregate causality here and this picture might change over time. Given the state of most western metropolises, though, it's worth considering whether we want to be highly paid sharecroppers forever.
- eru 7y ago
  Well, in economic analysis, we can always separate the roles of landowner and sharecropper. If we have to have any government, then we need to finance that government. Given the government the role of landowner and renting out the land to the highest bidder is the least bad way we know to do that financing. (That's what Georgism is all about.) If you buy land (and there's not a huge property tax or land value tax), than you are sharecropper and landowner in personal union. But the price you paid for the land was just the capitalised present value of those future land rents. So you don't even get much out of owning the land. In equilibrium, you could have invested in other assets just as well. In any case, I like living in Singapore. And I especially like that I don't have to buy an owner-occupied home to avoid capital gains taxes, like in most other countries.
  - ethanbond 7y ago
    Absolutely. To clarify my above statement (can't edit), the "we" in my comment "it's worth considering whether we want to be highly paid sharecroppers forever," is referring to we Americans/westerners/who do not live in a Georgist-like state.
    - eru 7y ago
      https://www.iras.gov.sg/irashome/Annual-Reports/Corporate-Information-and-Highlights/Our-Revenue-Collection/ https://www.iras.gov.sg/irashome/Annual-Reports/Corporate-In... says that Singapore isn't that Georgist. At least on the face of it, when measured by where the tax take comes from. Living here, I think we could levy a land value tax, and decrease eg person income taxes or VAT. But I can't complain too much in practice.

madengr 7y ago

It’s a whole different argument as to San Francisco productiveness. Is twitter productive? I’d call it a waste of time.

ethanbond 7y ago
I absolutely agree. "Productivity" in my comment means that it creates/accrues capital.
eru 7y ago
When someone uses a term without qualification, it's a reasonable first assumption to go with the meaning of the corresponding Wikipedia article, like https://en.wikipedia.org/wiki/Productivity https://en.wikipedia.org/wiki/Productivity Productivity is a technical term in economics. It connects to people's subjective judgement in the aggregate (ie San Francisco is only considered productive if people want what they produce) but doesn't care that one person in particular doesn't like what they do. For comparison, I don't like 'Light Beer', but a big brewery figuring out how to make more Light Beer from less malts still counts as a productivity improvement.

Faark 7y ago

This sounds a lot like how this Vox video [0] describes the situation in Hong Kong. Except without the intentionally established scarcity to keep prices and thus gov revenue up, leading to shitty living conditions. I'm not sure there is a way to perfectly set up incentives in the first place. The more important aspect seems to be culture: public officials actually wanting to serve the citizens & do good. [0] https://youtu.be/hLrFyjGZ9NU?t=173 https://youtu.be/hLrFyjGZ9NU?t=173

dragonwriter 7y ago

> which is full of extraordinarily wealthy people paying enormous rents to live under a dysfunctional government with a budgetary shortfall of $6.3B. The state has a large surplus and the City and County of San Francisco has a projected deficit of an order of magnitude less than that amount, and the US budget deficit is on the rough scale of two orders of magnitude larger. What dysfunctional government are you referring to?

ethanbond 7y ago
Ah, sorry about that. Late night commenting is never advisable. I was taking this number from here (https://www.statedatalab.org/state_data_and_comparisons/city/sanfrancisco https://www.statedatalab.org/state_data_and_comparisons/city...) and is actually meant to be the debt rather than a budget deficit. Looking into the source more it seems like it may not be the best (link: https://www.sourcewatch.org/index.php/Truth_in_Accounting https://www.sourcewatch.org/index.php/Truth_in_Accounting). From the voter information pamphlet (link: https://voterguide.sfelections.org/en/overview-san-francisco%E2%80%99s-debt https://voterguide.sfelections.org/en/overview-san-francisco...) it appears that official figures for the city's debt is in the $2.29B range, not including "the San Francisco Community College District, San Francisco Unified School District, and Bay Area Rapid Transit District (BART)." I revise my above statement to "[San Francisco] is full of extraordinarily wealthy people paying enormous rents to live under a dysfunctional government with a city debt of at least $2.29B." In any case, even if San Francisco had zero debt, it would still be a dysfunctional government. One need only walk through the Mission to see that.