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Land value taxation and reduction of regulations which artificially limit supply are the obvious solutions. Taxing improvements to land makes it less likely th
by nwah1 5y ago
Land value taxation and reduction of regulations which artificially limit supply are the obvious solutions.
Taxing improvements to land makes it less likely that people will build or renovate, so all such taxes should be removed. Taxing land, however, disincentivizes landlords from holding land idle.
Regulations are also important.
If there is a mandatory minimum amount of parking that must be provided, then it becomes that much harder to build more units, even if you are near transit and most of your tenants don't need cars.
If there are height restrictions, restrictions on mixed-use development, restrictions on the number of units allowed, and so on then these will likewise cap the amount of supply.
- Aerroon 5y agoThe problem is that the people who like rent control also dislike land value taxes. Land value taxes mean that if your neighborhood gets a successful shopping mall then the land value goes up and some people are priced out of the area. The reason people support things like rent control is "I've lived here my whole life but I can't afford rent anymore because it keeps going up."
- nwah1 5y agoI agree. Rent control vests certain residents who for whatever reason have chosen to remain tenants in the same place for a long time, at the expense of newcomers and overall economic productivity. But for people who hate change, it works as intended. Makes it hard for new people to move in, and makes building new things an unattractive proposition. However, with respect to affordability, a key complaint across the board, LVT does indeed help by reducing the amount of speculative holding and removing tax penalties for improvements. Under LVT residents will be able to afford better accommodations for less money. Particularly if other onerous policies are removed such as rent control, building restrictions, parking mandates, taxes on demolition, and the like.
- imtringued 5y agoThe half-assed solution is progressive taxation. Your first plot will be taxed very little. Every plot after that more and more. It's not perfect because it is basically a subsidy to owner occupants so it won't help suburbs become denser. However, it disconnects the impact of taxation on home owners and commercial developers/investors which means home owners will be more willing to tax developers. The one benefit is that large scale development will naturally consider denser housing because they want to optimize their tax burden.