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Who’s getting tossed out of homes? If they own any part of it, they can sell their land at its new higher value and pocket their share of the gains. Then the ca

Who’s getting tossed out of homes? If they own any part of it, they can sell their land at its new higher value and pocket their share of the gains. Then the can either move into a nearby newly redeveloped multi-unit building (increased efficiency as incentivized by LVT) or they can move further out to land with the same low value on which they used to live in a detached home. This same type of thinking drives me crazy in CA where Prop 13 exists because someone might have to move because they’ve made a million dollars in house value (simply by existing) that they might have to realize.

refurb 5y ago
You just described someone forced out of their home.
- pessimizer 5y ago
  And very precisely, too. They can't afford to keep their home because since other people want it, the taxes rise. The only solution is to sell to one of those people who wants it, and to move to a less desired home. 1) The buyer is pricing the house at its worth minus its future tax liabilities (which is what the seller receives), and the seller will use that money to purchase another house which also has tax liabilities. That house has to be worse, or the tax liabilities lower (or in the same general tax area, both.) 2) The seller is in an appreciating asset, but can't choose when to sell. They must sell when the tax liabilities become too much[*]. Meaning they must regardless of whether the property will probably continue to appreciate. This is a wealthy buyer's advantage over the seller, although this is partially ameliorated by competition between wealthy buyers who have priced in likely appreciation. But a very wealthy buyer can create appreciation through buying nearby properties to control the area, and through lobbying. 3) Also, real estate tax law tends to benefit wealthy buyers who leave rental properties empty, and can use those liabilities to offset profits they make in another area. This seems like a formula for downward mobility. And for people to be forced out of the neighborhoods where they have networks and jobs, and have to move to worse places where they have no networks, and are farther from jobs. [*] In the worst case, they mortgage the home in order to pay the tax liabilities, and to extend the time before they must sell - meaning that when they sell, they're actually paying off back taxes with the money, meaning they have even less (or no) money for their next residence.
  - merrywhether 5y ago
    Re: 3, you can’t apply non-LVT outcomes to an LVT scenario. The tax situation would eventually force the redevelopment of the lot (outside of a few super-rich owners who want a trophy SFH and are inelastic to tax pressure), bringing more density and opportunity for people to live in valuable space.
- merrywhether 5y ago
  This happens now anyway, except currently people are priced out by an increasing cost of goods and services and then forced to leave the area entirely. The idea/hope/whatever behind LVT is that it would force redevelopment into more density, allowing more people to live in valuable areas while keeping cost of living flat and manageable. Density is the end-goal of LVT proponents. I admit I don’t have a lot of attachment to a given plot of land, and understand some people place more value on that. But it’s also pretty selfish for one person/family to claim a plot in a productive market to the exclusion of ten others by standing in the way of densification. It’s a question of singular good vs that of the collective, and there is no right answer there at which point I guess it’s agree to disagree?

refurb 5y ago

You just described someone forced out of their home.

pessimizer 5y ago
And very precisely, too. They can't afford to keep their home because since other people want it, the taxes rise. The only solution is to sell to one of those people who wants it, and to move to a less desired home. 1) The buyer is pricing the house at its worth minus its future tax liabilities (which is what the seller receives), and the seller will use that money to purchase another house which also has tax liabilities. That house has to be worse, or the tax liabilities lower (or in the same general tax area, both.) 2) The seller is in an appreciating asset, but can't choose when to sell. They must sell when the tax liabilities become too much[*]. Meaning they must regardless of whether the property will probably continue to appreciate. This is a wealthy buyer's advantage over the seller, although this is partially ameliorated by competition between wealthy buyers who have priced in likely appreciation. But a very wealthy buyer can create appreciation through buying nearby properties to control the area, and through lobbying. 3) Also, real estate tax law tends to benefit wealthy buyers who leave rental properties empty, and can use those liabilities to offset profits they make in another area. This seems like a formula for downward mobility. And for people to be forced out of the neighborhoods where they have networks and jobs, and have to move to worse places where they have no networks, and are farther from jobs. [*] In the worst case, they mortgage the home in order to pay the tax liabilities, and to extend the time before they must sell - meaning that when they sell, they're actually paying off back taxes with the money, meaning they have even less (or no) money for their next residence.
- merrywhether 5y ago
  Re: 3, you can’t apply non-LVT outcomes to an LVT scenario. The tax situation would eventually force the redevelopment of the lot (outside of a few super-rich owners who want a trophy SFH and are inelastic to tax pressure), bringing more density and opportunity for people to live in valuable space.
merrywhether 5y ago
This happens now anyway, except currently people are priced out by an increasing cost of goods and services and then forced to leave the area entirely. The idea/hope/whatever behind LVT is that it would force redevelopment into more density, allowing more people to live in valuable areas while keeping cost of living flat and manageable. Density is the end-goal of LVT proponents. I admit I don’t have a lot of attachment to a given plot of land, and understand some people place more value on that. But it’s also pretty selfish for one person/family to claim a plot in a productive market to the exclusion of ten others by standing in the way of densification. It’s a question of singular good vs that of the collective, and there is no right answer there at which point I guess it’s agree to disagree?