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Even if land were historically taxed at say NYC rates in SF the supply and demand problem would still rear its head. The problem is artificial supply constrain

Even if land were historically taxed at say NYC rates in SF the supply and demand problem would still rear its head. The problem is artificial supply constraints created first and foremost by zoning and secondly by a myriad of other regulation that infringed upon property rights and adds friction (time, money, risk, all of the above) that prevents people from exercising their property rights. Prop 13 (a monetary incentive to not sell) falls into this latter category. LVT would just be the revers of Prop 13. It's not going to solve a fundamental supply and demand problem that's created at a lower level. You'd have everything built out as much as the zoning allows for but the net result would still be inadequate because the zoning is too restrictive and the regulatory friction is going to still works its magic at the margin.

thaumasiotes 6y ago
> a myriad of other regulation that infringed upon property rights and adds friction (time, money, risk, all of the above) that prevents people from exercising their property rights. Prop 13 (a monetary incentive to not sell) falls into this latter category. I think Prop 13's incentive not to redevelop is actually more significant here than its incentive not to sell.
- kelnos 6y ago
  Right. At least when you're old enough to be in retirement there are a bunch of ways (expanded this year) to sell and keep your old tax assessment on your new place. AFAIK redevelopment will always trigger a reassessment no matter what.
pydry 6y ago
Zoning is a result of NIMBYism. NIMBYism is a result of people who really want to protect the value of their land. Some of these people will be quite desperate to do this because they're highly leveraged. Negative equity is a good incentive to turn up to your local planning meetings and inhibit development.
- throwaway0a5e 6y ago
  I think NIMBYism only looks financially attractive because everyone who bought a square of land in a "city" since the 1970s or so and held for at least a decade has won big regardless of where. That doesn't mean that SF/SV isn't forgoing a lot of money in order to keep its NIMBY policy. Think about how much just the squares of land those single family homes and low rise buildings in SV are on would be worth if the SF was developed to NYC, Chicago or Boston levels. I think the fundamental problem here is that the people of SV people do not believe in property rights (e.g. the right to develop property you own as you see fit) to such an extent that they are willing to put their money where their mouth is and codify it in the form of (restrictive zoning and other shenanigans that hinder development) even though this inhibits growth and limits their upside. Edited for clarity
  - deleted 6y ago
    [deleted]
  - nitrogen 6y ago
    This is because fundamentally people aren't buying houses for "upside", they are buying them because they want somewhere to live.
    - kelnos 6y ago
      Yes and no, and this is a big part of the problem: young adults in the US are taught that their primary residence is/will be their biggest investment. So you get this weird set of fears that encompasses the worst of both. The house-as-residence aspect makes them fearful that you won't make your mortgage payments, or your mortgage will end up under water, and the bank will foreclose on you and you'll be homeless. The house-as-investment aspect makes them fearful that they'll take a loss or even break even come sale time, and then their retirement nest egg will be weak. So I agree that fundamentally yes, people are buying a house to live in, but it's a lot more loaded than that. If housing costs were more reasonable, perhaps we could turn the tide against this "primary-home-as-investment" attitude, which I believe to be counterproductive.
  - 6y ago

thaumasiotes 6y ago

> a myriad of other regulation that infringed upon property rights and adds friction (time, money, risk, all of the above) that prevents people from exercising their property rights. Prop 13 (a monetary incentive to not sell) falls into this latter category. I think Prop 13's incentive not to redevelop is actually more significant here than its incentive not to sell.

kelnos 6y ago
Right. At least when you're old enough to be in retirement there are a bunch of ways (expanded this year) to sell and keep your old tax assessment on your new place. AFAIK redevelopment will always trigger a reassessment no matter what.

pydry 6y ago

Zoning is a result of NIMBYism. NIMBYism is a result of people who really want to protect the value of their land. Some of these people will be quite desperate to do this because they're highly leveraged. Negative equity is a good incentive to turn up to your local planning meetings and inhibit development.

throwaway0a5e 6y ago
I think NIMBYism only looks financially attractive because everyone who bought a square of land in a "city" since the 1970s or so and held for at least a decade has won big regardless of where. That doesn't mean that SF/SV isn't forgoing a lot of money in order to keep its NIMBY policy. Think about how much just the squares of land those single family homes and low rise buildings in SV are on would be worth if the SF was developed to NYC, Chicago or Boston levels. I think the fundamental problem here is that the people of SV people do not believe in property rights (e.g. the right to develop property you own as you see fit) to such an extent that they are willing to put their money where their mouth is and codify it in the form of (restrictive zoning and other shenanigans that hinder development) even though this inhibits growth and limits their upside. Edited for clarity
- deleted 6y ago
  [deleted]
- nitrogen 6y ago
  This is because fundamentally people aren't buying houses for "upside", they are buying them because they want somewhere to live.
  - kelnos 6y ago
    Yes and no, and this is a big part of the problem: young adults in the US are taught that their primary residence is/will be their biggest investment. So you get this weird set of fears that encompasses the worst of both. The house-as-residence aspect makes them fearful that you won't make your mortgage payments, or your mortgage will end up under water, and the bank will foreclose on you and you'll be homeless. The house-as-investment aspect makes them fearful that they'll take a loss or even break even come sale time, and then their retirement nest egg will be weak. So I agree that fundamentally yes, people are buying a house to live in, but it's a lot more loaded than that. If housing costs were more reasonable, perhaps we could turn the tide against this "primary-home-as-investment" attitude, which I believe to be counterproductive.
- 6y ago