4 ms·

What are you basing your predictions here on? Do you have an example where this has happened?

AnthonyMouse 6y ago
Do you have an example of where LVT was tried at scale anywhere at all ever? I'm just describing the incentives. Identify the flaw in the logic.
- CyberDildonics 6y ago
  I'm not arguing for or against anything and I didn't write an elaborate prediction, I'm just asking what you are basing your predictions on.
  - throwaway201103 6y ago
    The fundamental problem is that the value of land is inexorably tied up in the things people do with the land to actually earn money. Vacant land has little value in that sense until it's improved. You can't separate the land value from the investment in the improvements made that actually generate income. It's not quite that simple because a vacant lot in a trendy area has more potential value than a lot in a run-down area. But only because of the improvements on other nearby properties. That's what makes the land valuable -- not anything intrinsic about the land itself.
- loeg 6y ago
  You're describing a scenario starting with extreme zoning restrictions and then immediately lifting those restrictions. I don't think your predictions relate to a LVT at all — similar drastic development with varying height would happen in any desirable area with sudden change in zoning restriction. Imagine instead that zoning restrictions were relaxed gradually.
  - AnthonyMouse 6y ago
    Not really. If you only eliminated the zoning restrictions then the incentive to build much taller than average buildings would be reduced, and the taxes that had to be collected from owners of smaller buildings wouldn't change or could in fact be reduced as the new taller buildings pick up more of the tax burden.
- paconbork 6y ago
  >They abandon their properties, which have already declined in value, because the tax is more than the newly lowered cost of buying space in one of the tall buildings. If we hit the saturation point for tall apartment buildings, the land is less valuable (since you can't extract as much value from it), decreasing the land value taxes (and thus, incentive to leave homes). Lower land value taxes incentivize constructing more modest apartment buildings, as those will now be profitable. This process continues until housing supply meets demand. Also many people prefer living in single-family houses. The bay area is full of people who won't sell their single-family house even though the value has gone up 20x. They wouldn't abandon their properties unless they had to. And if they have to it means they can sell them for a lot to a developer who will profitably build an apartment.
  - throwaway201103 6y ago
    It's one thing to sell because you have an unrealized 20x gain. It's another thing to be forced to sell because you can't afford the taxes.
  - AnthonyMouse 6y ago
    > If we hit the saturation point for tall apartment buildings, the land is less valuable (since you can't extract as much value from it), decreasing the land value taxes (and thus, incentive to leave homes). The problem here is that you're assuming we can just reduce government revenues that way. That would imply a corresponding reduction in government spending, or else the government would have to increase the rate to account for the reduced land value. Which is why people would be forced out of single family homes. The amount of government services required by the occupants of a twelve story building would have to be financed by a tax that collects the same money from the owner of a single family home. The latter would be forced out by that amount of tax.
- mullingitover 6y ago
  > Do you have an example of where LVT was tried at scale anywhere at all ever? Pennsylvania[1]. > The number of vacant structures in Harrisburg declined from over 4200 in 1982 to under 500 by 2001. The downtown—previously a ghost town—is alive, even at night. The number of businesses on the tax roll has grown from 1,908 to 8,864. > After LVT was adopted by voters in 1996, 70% of residential parcels saw a tax decrease; importantly, in the most at-risk neighborhoods (older pre-war housing and factory blocks) upwards of 90% of homes had their tax liability reduced. Local business taxes were frozen by law at 1996 levels. Construction returned to the city: the number of taxable building permits surged past neighboring Bethlehem, market investment returned, and capital improvement reappeared in city budgets. Tax burdens on productive work and business declined. The losers in this trade were absentee owners of vacant lots, who had to shoulder much more of the burden. [1] https://www.strongtowns.org/journal/2019/3/6/non-glamorous-gains-the-pennsylvania-land-tax-experiment https://www.strongtowns.org/journal/2019/3/6/non-glamorous-g...
  - AnthonyMouse 6y ago
    So this is basically considering the opposite scenario -- not one in which there is pent up demand but one in which there are many existing abandoned buildings. Moreover, it's a scenario in which the introduction of LVT was not revenue neutral -- you're including in the measurement the economic benefits of a tax cut. It means you're essentially here: > It seems obvious that this only works if the amount of the land tax isn't large enough to cause these behavioral changes.

Do you have an example of where LVT was tried at scale anywhere at all ever? I'm just describing the incentives. Identify the flaw in the logic.

CyberDildonics 6y ago
I'm not arguing for or against anything and I didn't write an elaborate prediction, I'm just asking what you are basing your predictions on.
- throwaway201103 6y ago
  The fundamental problem is that the value of land is inexorably tied up in the things people do with the land to actually earn money. Vacant land has little value in that sense until it's improved. You can't separate the land value from the investment in the improvements made that actually generate income. It's not quite that simple because a vacant lot in a trendy area has more potential value than a lot in a run-down area. But only because of the improvements on other nearby properties. That's what makes the land valuable -- not anything intrinsic about the land itself.
loeg 6y ago
You're describing a scenario starting with extreme zoning restrictions and then immediately lifting those restrictions. I don't think your predictions relate to a LVT at all — similar drastic development with varying height would happen in any desirable area with sudden change in zoning restriction. Imagine instead that zoning restrictions were relaxed gradually.
- AnthonyMouse 6y ago
  Not really. If you only eliminated the zoning restrictions then the incentive to build much taller than average buildings would be reduced, and the taxes that had to be collected from owners of smaller buildings wouldn't change or could in fact be reduced as the new taller buildings pick up more of the tax burden.
paconbork 6y ago
>They abandon their properties, which have already declined in value, because the tax is more than the newly lowered cost of buying space in one of the tall buildings. If we hit the saturation point for tall apartment buildings, the land is less valuable (since you can't extract as much value from it), decreasing the land value taxes (and thus, incentive to leave homes). Lower land value taxes incentivize constructing more modest apartment buildings, as those will now be profitable. This process continues until housing supply meets demand. Also many people prefer living in single-family houses. The bay area is full of people who won't sell their single-family house even though the value has gone up 20x. They wouldn't abandon their properties unless they had to. And if they have to it means they can sell them for a lot to a developer who will profitably build an apartment.
- throwaway201103 6y ago
  It's one thing to sell because you have an unrealized 20x gain. It's another thing to be forced to sell because you can't afford the taxes.
- AnthonyMouse 6y ago
  > If we hit the saturation point for tall apartment buildings, the land is less valuable (since you can't extract as much value from it), decreasing the land value taxes (and thus, incentive to leave homes). The problem here is that you're assuming we can just reduce government revenues that way. That would imply a corresponding reduction in government spending, or else the government would have to increase the rate to account for the reduced land value. Which is why people would be forced out of single family homes. The amount of government services required by the occupants of a twelve story building would have to be financed by a tax that collects the same money from the owner of a single family home. The latter would be forced out by that amount of tax.
mullingitover 6y ago
> Do you have an example of where LVT was tried at scale anywhere at all ever? Pennsylvania[1]. > The number of vacant structures in Harrisburg declined from over 4200 in 1982 to under 500 by 2001. The downtown—previously a ghost town—is alive, even at night. The number of businesses on the tax roll has grown from 1,908 to 8,864. > After LVT was adopted by voters in 1996, 70% of residential parcels saw a tax decrease; importantly, in the most at-risk neighborhoods (older pre-war housing and factory blocks) upwards of 90% of homes had their tax liability reduced. Local business taxes were frozen by law at 1996 levels. Construction returned to the city: the number of taxable building permits surged past neighboring Bethlehem, market investment returned, and capital improvement reappeared in city budgets. Tax burdens on productive work and business declined. The losers in this trade were absentee owners of vacant lots, who had to shoulder much more of the burden. [1] https://www.strongtowns.org/journal/2019/3/6/non-glamorous-gains-the-pennsylvania-land-tax-experiment https://www.strongtowns.org/journal/2019/3/6/non-glamorous-g...
- AnthonyMouse 6y ago
  So this is basically considering the opposite scenario -- not one in which there is pent up demand but one in which there are many existing abandoned buildings. Moreover, it's a scenario in which the introduction of LVT was not revenue neutral -- you're including in the measurement the economic benefits of a tax cut. It means you're essentially here: > It seems obvious that this only works if the amount of the land tax isn't large enough to cause these behavioral changes.