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Wouldn't a land value tax encourage urban sprawling ? Current ubran policies in the western world, coupled with the normalization of remote working already do

Wouldn't a land value tax encourage urban sprawling ? Current ubran policies in the western world, coupled with the normalization of remote working already do this to some extent.

zeepthee 5y ago
How would it encourage urban sprawling?
- Pet_Ant 5y ago
  Preosumably the closer to the city centre the higher the per square fot value so to minimise costs you move to the edge of town, thus sprawl.
  - pydry 5y ago
    Or you buy an apartment in a high rise and share the cost with the other residents. It would certainly discourage the building of houses in the city centre.
    - taffer 5y ago
      > It would certainly discourage the building of houses in the city centre. No, that's not how it works. The value of a property is made up of the value of the land and the value of the buildings on it. If one of these two components is taxed, its value is reduced. However, it is important to remember that the supply of land is fixed, but the supply of buildings is not. If one taxes buildings, as is the case with a traditional property tax, construction activity is reduced, but if one taxes only land, as is the case with a land value tax, construction activity is not impeded at all. That's the beauty of a land value tax: it doesn't distort anything. With a property tax, an undeveloped lot in the center of town is taxed less than a high-rise. With a land value tax, both are taxed at the same rate. Relatively speaking, a property tax promotes sprawl, a land value tax promotes density.
      - pydry 5y ago
        That's essentially my point. A house in the city center which consumes the same amount of land as an apartment block would face the same tax bill. Who would want that house with that tax bill?
        merrywhether 5y ago
        Someone who wants to demolish it and turn it into an apartment building! That’s literally the point of LVT: incentivizing increasingly efficient usage of land in high-value areas.
        imtringued 5y ago
        The bill is high because people are willing to pay it. If the neighboring properties are 3 story multifamily buildings then this one will be upgraded to a 3 story building as well.
- ForHackernews 5y ago
  If you're taxed on the value of the land, rather than the value of the property built on top of that land, it arguably incentivizes buying super-cheap exurban land and planting massive McManisions on it. Obviously in real life, people care about other things besides just pure acreage, but you can see the argument.
  - taffer 5y ago
    If people only cared about land area, the distinction between urban and non-urban land wouldn't even exist. What makes urban land special is the infrastructure, schools, workplaces, restaurants, cafés, theaters, libraries. These things make a city a city. These things promote density because people cluster around them. As I explained in another comment[1], a property tax discourages density and encourages sprawl. A land value tax, on the other hand, does not have these adverse effects on density because it taxes only the fixed supply of land, not the variable supply of buildings. [1] https://news.ycombinator.com/item?id=28423428 https://news.ycombinator.com/item?id=28423428
- neutronicus 5y ago
  Aspiring single-family home dwellers will go farther afield in search of less-taxed land
  - thriftwy 5y ago
    Maybe they will go to smaller metropolitan area instead?
pydry 5y ago
It would probably encourage less urban sprawl by driving more efficient use of city center land and housing.
- R0b0t1 5y ago
  It depends. If owned land is converted for rent then the LVT is passed on to the tenant. To avoid paying the LVT tenants are incentivized to own, which may imply buying new construction. As population density increases, desirability increases, and people may try investing with the goal of renting, which with an LVT will more sharply decrease the desirability of population density.
  - taffer 5y ago
    > To avoid paying the LVT tenants are incentivized to own LVT is paid by the owner of the land. That is the whole point of a LVT, that you cannot avoid it.
    - R0b0t1 5y ago
      On paper, yes, but it'll just get passed on to the renter.
      - pydry 5y ago
        Renters would pay the same rents they do now. For some landlords that would cover their tax bill. Others not so much. It would precipitate a collapse in property values, but not a rise in rents.
        R0b0t1 5y ago
        I must sincerely ask you if you read my original comment and the person I am replying to: As population density increases, desirability increases, and people may try investing with the goal of renting, which with an LVT will more sharply decrease the desirability of population density. An LVT can incentivize sprawl because all else equal the LVT would ultimately be passed on to renters.
taffer 5y ago
On the contrary, a land value tax is often proposed to discourage sprawl. Since a land value tax is the same whether you leave a lot vacant or build a single family home or a multi family home, it encourages density and leads to less sprawl.
Lammy 5y ago
Sprawling to where? It’s an island

Wouldn't a land value tax encourage urban sprawling ? Current ubran policies in the western world, coupled with the normalization of remote working already do this to some extent.

zeepthee 5y ago

How would it encourage urban sprawling?

Pet_Ant 5y ago
Preosumably the closer to the city centre the higher the per square fot value so to minimise costs you move to the edge of town, thus sprawl.
- pydry 5y ago
  Or you buy an apartment in a high rise and share the cost with the other residents. It would certainly discourage the building of houses in the city centre.
  - taffer 5y ago
    > It would certainly discourage the building of houses in the city centre. No, that's not how it works. The value of a property is made up of the value of the land and the value of the buildings on it. If one of these two components is taxed, its value is reduced. However, it is important to remember that the supply of land is fixed, but the supply of buildings is not. If one taxes buildings, as is the case with a traditional property tax, construction activity is reduced, but if one taxes only land, as is the case with a land value tax, construction activity is not impeded at all. That's the beauty of a land value tax: it doesn't distort anything. With a property tax, an undeveloped lot in the center of town is taxed less than a high-rise. With a land value tax, both are taxed at the same rate. Relatively speaking, a property tax promotes sprawl, a land value tax promotes density.
    - pydry 5y ago
      That's essentially my point. A house in the city center which consumes the same amount of land as an apartment block would face the same tax bill. Who would want that house with that tax bill?
      - merrywhether 5y ago
        Someone who wants to demolish it and turn it into an apartment building! That’s literally the point of LVT: incentivizing increasingly efficient usage of land in high-value areas.
      - imtringued 5y ago
        The bill is high because people are willing to pay it. If the neighboring properties are 3 story multifamily buildings then this one will be upgraded to a 3 story building as well.
ForHackernews 5y ago
If you're taxed on the value of the land, rather than the value of the property built on top of that land, it arguably incentivizes buying super-cheap exurban land and planting massive McManisions on it. Obviously in real life, people care about other things besides just pure acreage, but you can see the argument.
- taffer 5y ago
  If people only cared about land area, the distinction between urban and non-urban land wouldn't even exist. What makes urban land special is the infrastructure, schools, workplaces, restaurants, cafés, theaters, libraries. These things make a city a city. These things promote density because people cluster around them. As I explained in another comment[1], a property tax discourages density and encourages sprawl. A land value tax, on the other hand, does not have these adverse effects on density because it taxes only the fixed supply of land, not the variable supply of buildings. [1] https://news.ycombinator.com/item?id=28423428 https://news.ycombinator.com/item?id=28423428
neutronicus 5y ago
Aspiring single-family home dwellers will go farther afield in search of less-taxed land
- thriftwy 5y ago
  Maybe they will go to smaller metropolitan area instead?

pydry 5y ago

It would probably encourage less urban sprawl by driving more efficient use of city center land and housing.

R0b0t1 5y ago
It depends. If owned land is converted for rent then the LVT is passed on to the tenant. To avoid paying the LVT tenants are incentivized to own, which may imply buying new construction. As population density increases, desirability increases, and people may try investing with the goal of renting, which with an LVT will more sharply decrease the desirability of population density.
- taffer 5y ago
  > To avoid paying the LVT tenants are incentivized to own LVT is paid by the owner of the land. That is the whole point of a LVT, that you cannot avoid it.
  - R0b0t1 5y ago
    On paper, yes, but it'll just get passed on to the renter.
    - pydry 5y ago
      Renters would pay the same rents they do now. For some landlords that would cover their tax bill. Others not so much. It would precipitate a collapse in property values, but not a rise in rents.
      - R0b0t1 5y ago
        I must sincerely ask you if you read my original comment and the person I am replying to: As population density increases, desirability increases, and people may try investing with the goal of renting, which with an LVT will more sharply decrease the desirability of population density. An LVT can incentivize sprawl because all else equal the LVT would ultimately be passed on to renters.

taffer 5y ago

On the contrary, a land value tax is often proposed to discourage sprawl. Since a land value tax is the same whether you leave a lot vacant or build a single family home or a multi family home, it encourages density and leads to less sprawl.

Lammy 5y ago

Sprawling to where? It’s an island