6 ms·

Good analysis. What we are experiencing is an inevitable decline in a late stage of an empire. Land and real estate market under current laws doesn't clear, s

Good analysis. What we are experiencing is an inevitable decline in a late stage of an empire. Land and real estate market under current laws doesn't clear, so leaves too many city lots vacant or unused. Lots don't come back to market and new properties are promptly snatched up by speculation on even less availability. This forms a monopoly in housing and land markets. Orders of magnitude larger than any big tech, oil or railroads that we've ever experienced. In effect, most of disposable income of orninary people is eaten away by the monopoly. Everyone pays a "rent" tax which is impossible to avoid. This is well described by Georgist economists. What is not described yet and what the article touches on is important. The real estate monopoly, sucking away all incomes, doesn't allow for many winners in the economy. In the 50s every man could have been a "winner" in an environment of half of the world destroyed after ww2. Nowadays there are only a few winners at the top. Women only mate with winners and would rather hold out than having to reproduce with losers. You witness rise of feminism, break down of family units and rock bottom birth rates. Beginning in Japan which suffered from the mega real estate crash first, now the same scenario spreading to the rest of the world. The land monopoly won't be dismantled because both parties benefit and most importantly, population is invested in this pyramid scheme of ever increasing house prices. You can't expect people to vote away their ponzi life savings stored in crumbling houses. The inevitable stage that follows is a next-gen feudal society with landed aristocracy as we know it from history. You only win in life if you get born into the right family with enough inherited real estate, getting paid rent taxes by serfs.

ep103 5y ago
Or, and hear me out here.... we could tax non-primary residences. But I agree, we should instead allow the free market to lead us towards a non-competitive hereditary based future
- kiba 5y ago
  We should erode the value of housing and housing debt through inflation, and have the government buy up lands to redevelop into high density housing with corresponding transport infrastructure. Then set land value tax when the government sold the land back to the market, or otherwise continue to subside and manage these housing stocks. Otherwise, the middle class will continue to fight any land reform.
  - thomasahle 5y ago
    > We should erode the value of housing and housing debt through inflation If you want to lower house prices, easier to just tax houses/properties more.
    - kiba 5y ago
      If you want to lower house prices, easier to just tax houses/properties more. Increase taxation, the middle class homeowners will revolt. Political will is required to build more housing.
      - thomasahle 5y ago
        Sure. Political will and homeowner revolt is why we havent done it already. You seem to say inflation can sidestep these issues. But why should we even assume house prices wont just grow with inflation, or much faster, as has been the case so far?
        imtringued 5y ago
        If land value taxes won't happen, then the next best thing is a ground lease for all new plots of land.
        snidane 5y ago
        Land value tax and ground lease are equivalents. Calling it a lease or tax or fee or whatever is just a political strategy to appeal to the right group. Naming it a tax will surely infuriate right leaning propertarians and common populace. Interesting idea about govt buying up all land and then reimposing LVT on then newly privatised land. I am skeptical, because of 1. government corruption 2. higher chance of experiencing a land market reset through war
        kiba 5y ago
        Government corruption shouldn't be a reason to stop the government from doing anything, unless it is an issue that obviously going to stop effective implementation.
- mjevans 5y ago
  Hypothetically, summer / winter homes. The tax law should exempt, from this tax on inverters, any home the owner resides in for at least 33.4% of a year (literal text "one third of a calendar year, rounded up to the next whole day"). Someone could thus have a summer and winter home, but only two. An additional clause should also disqualify any home rented for value for more than 1/3rd of a year. Letting friends and family stay free thus exempted from the disqualification. (Still must comply with the above qualifier on primary residence.)
  - ep103 5y ago
    Sure! Taxes can go up with each subsequent home owned. Taxes can go up in inverse proportion to time spent in the home. Taxes can go up in proportion to the total value of the home (to avoid simply buying your neighbor's home and calling it one property to bypass this law). Etc, etc, etc. There are plenty of possible ways to implement this, and I leave it to actual experts to determine what the best way is. But the plethora of ways makes it quite clear that at least one viable path should be determinable and implementable.
sien 5y ago
People in the US are moving to states where housing in successful cities is cheap. https://www.sfchronicle.com/local/article/Texas-population-grew-more-than-twice-as-fast-16130905.php https://www.sfchronicle.com/local/article/Texas-population-g... Texas grew by 15.9% between 2010 to 2020. Florida by 14.6% , Georgia by 10.6% and North Carolina by 9.5% . Average house price in Houston is 285K according to Redfin. Either Zoning will change in CA, NY and other places or they will fade in importance.
- snidane 5y ago
  You can't escape a monopoly of such size. There isn't a city where housing is cheap. At best it is a temporary situation or your view is biased by working in a above average income field. Zoning will bever help. Once you make space for more housing, developers will build units to be snatched up for speculation that will be left vacant. You need the housing market to clear. To release unused units to the market. For that you need land tax or an equivalent.
  - epicureanideal 5y ago
    Or just build huge amounts of homes. It's not impossible. The US doesn't even build as many dwellings as we used to in the 60s and 70s if I remember correctly. Enable developers to build skyscrapers of 500 square foot apartments until there are enough of THOSE apartments to house literally 100% of the population. Then people can choose to either pay say $1000/mo to live in one of those small apartments, or whatever it costs to buy a single family home. And if people have the option of renting somewhere cheap, even if it isn't ideal, that'll help balance the market. Right now we have situations where people need to pay $2000+/mo for the smallest of apartments.
    - sien 5y ago
      US home building peaked in absolute terms in the 1970s. When adjusted for population it's even more down. https://fred.stlouisfed.org/series/HOUST https://fred.stlouisfed.org/series/HOUST
    - 5y ago
evancharles 5y ago
Our real estate and land markets seem hyper fragmented, not close to being a monopoly? Maybe I'm misunderstanding.
- epicureanideal 5y ago
  They are only fragmented at first glance. Upon a closer look, there are organizations like the Association of Bay Area Governments, and of course all kinds of unofficial meetings and shared information sources that keep people on the same page. Similar to how "salary surveys" are "not collusion" among the big employers, even though they're used to effectively fix the price of employee salaries to certain ranges and treat that as some sort of natural barrier like a mountain range that can't be overcome.
88913527 5y ago
> In the 50s every man could have been a "winner" in an environment of half of the world destroyed after ww2. In the United States, quite possibly so. But what about people who already had their wealth literally bombed away? For example, most of Dresden was destroyed. My argument isn't that improved economies are zero-sum, but rather the example of the 1950s was one where many were set up to succeed and others to lose. And if you look further back, the opportunity to have cheap ubiquitous land to carve out suburban areas was enabled by taking land from Native Americans. The economic pie is ever-growing, but it seems moments of great technical advancement, war, etc segment the growth into new groupings of winners and losers, and for the average person, riding on the coattails of this growth is merely being at the right place at the right time, perhaps being at the right spot on the socioeconomic ladder.
- jhoechtl 5y ago
  > In the United States, quite possibly so. But what about people who already had their wealth literally bombed away? For example, most of Dresden was destroyed. It's true for Germany as well and called the Wirtschaftswunder. https://en.wikipedia.org/wiki/Wirtschaftswunder https://en.wikipedia.org/wiki/Wirtschaftswunder This period of fast growth in Germany happened a bit later than in the US, more like in the 60', 70'.
- imtringued 5y ago
  The bombs not only destroy the city, they also destroy the hubris. It wouldn't surprise me if most wars are motivated by land disputes because land is one of the few things that can only be protected and obtained through violence.

ep103 5y ago

Or, and hear me out here.... we could tax non-primary residences. But I agree, we should instead allow the free market to lead us towards a non-competitive hereditary based future

kiba 5y ago
We should erode the value of housing and housing debt through inflation, and have the government buy up lands to redevelop into high density housing with corresponding transport infrastructure. Then set land value tax when the government sold the land back to the market, or otherwise continue to subside and manage these housing stocks. Otherwise, the middle class will continue to fight any land reform.
- thomasahle 5y ago
  > We should erode the value of housing and housing debt through inflation If you want to lower house prices, easier to just tax houses/properties more.
  - kiba 5y ago
    If you want to lower house prices, easier to just tax houses/properties more. Increase taxation, the middle class homeowners will revolt. Political will is required to build more housing.
    - thomasahle 5y ago
      Sure. Political will and homeowner revolt is why we havent done it already. You seem to say inflation can sidestep these issues. But why should we even assume house prices wont just grow with inflation, or much faster, as has been the case so far?
      - imtringued 5y ago
        If land value taxes won't happen, then the next best thing is a ground lease for all new plots of land.
        snidane 5y ago
        Land value tax and ground lease are equivalents. Calling it a lease or tax or fee or whatever is just a political strategy to appeal to the right group. Naming it a tax will surely infuriate right leaning propertarians and common populace. Interesting idea about govt buying up all land and then reimposing LVT on then newly privatised land. I am skeptical, because of 1. government corruption 2. higher chance of experiencing a land market reset through war
        kiba 5y ago
        Government corruption shouldn't be a reason to stop the government from doing anything, unless it is an issue that obviously going to stop effective implementation.
mjevans 5y ago
Hypothetically, summer / winter homes. The tax law should exempt, from this tax on inverters, any home the owner resides in for at least 33.4% of a year (literal text "one third of a calendar year, rounded up to the next whole day"). Someone could thus have a summer and winter home, but only two. An additional clause should also disqualify any home rented for value for more than 1/3rd of a year. Letting friends and family stay free thus exempted from the disqualification. (Still must comply with the above qualifier on primary residence.)
- ep103 5y ago
  Sure! Taxes can go up with each subsequent home owned. Taxes can go up in inverse proportion to time spent in the home. Taxes can go up in proportion to the total value of the home (to avoid simply buying your neighbor's home and calling it one property to bypass this law). Etc, etc, etc. There are plenty of possible ways to implement this, and I leave it to actual experts to determine what the best way is. But the plethora of ways makes it quite clear that at least one viable path should be determinable and implementable.

sien 5y ago

People in the US are moving to states where housing in successful cities is cheap. https://www.sfchronicle.com/local/article/Texas-population-grew-more-than-twice-as-fast-16130905.php https://www.sfchronicle.com/local/article/Texas-population-g... Texas grew by 15.9% between 2010 to 2020. Florida by 14.6% , Georgia by 10.6% and North Carolina by 9.5% . Average house price in Houston is 285K according to Redfin. Either Zoning will change in CA, NY and other places or they will fade in importance.

snidane 5y ago
You can't escape a monopoly of such size. There isn't a city where housing is cheap. At best it is a temporary situation or your view is biased by working in a above average income field. Zoning will bever help. Once you make space for more housing, developers will build units to be snatched up for speculation that will be left vacant. You need the housing market to clear. To release unused units to the market. For that you need land tax or an equivalent.
- epicureanideal 5y ago
  Or just build huge amounts of homes. It's not impossible. The US doesn't even build as many dwellings as we used to in the 60s and 70s if I remember correctly. Enable developers to build skyscrapers of 500 square foot apartments until there are enough of THOSE apartments to house literally 100% of the population. Then people can choose to either pay say $1000/mo to live in one of those small apartments, or whatever it costs to buy a single family home. And if people have the option of renting somewhere cheap, even if it isn't ideal, that'll help balance the market. Right now we have situations where people need to pay $2000+/mo for the smallest of apartments.
  - sien 5y ago
    US home building peaked in absolute terms in the 1970s. When adjusted for population it's even more down. https://fred.stlouisfed.org/series/HOUST https://fred.stlouisfed.org/series/HOUST
  - 5y ago

evancharles 5y ago

Our real estate and land markets seem hyper fragmented, not close to being a monopoly? Maybe I'm misunderstanding.

epicureanideal 5y ago
They are only fragmented at first glance. Upon a closer look, there are organizations like the Association of Bay Area Governments, and of course all kinds of unofficial meetings and shared information sources that keep people on the same page. Similar to how "salary surveys" are "not collusion" among the big employers, even though they're used to effectively fix the price of employee salaries to certain ranges and treat that as some sort of natural barrier like a mountain range that can't be overcome.

88913527 5y ago

> In the 50s every man could have been a "winner" in an environment of half of the world destroyed after ww2. In the United States, quite possibly so. But what about people who already had their wealth literally bombed away? For example, most of Dresden was destroyed. My argument isn't that improved economies are zero-sum, but rather the example of the 1950s was one where many were set up to succeed and others to lose. And if you look further back, the opportunity to have cheap ubiquitous land to carve out suburban areas was enabled by taking land from Native Americans. The economic pie is ever-growing, but it seems moments of great technical advancement, war, etc segment the growth into new groupings of winners and losers, and for the average person, riding on the coattails of this growth is merely being at the right place at the right time, perhaps being at the right spot on the socioeconomic ladder.

jhoechtl 5y ago
> In the United States, quite possibly so. But what about people who already had their wealth literally bombed away? For example, most of Dresden was destroyed. It's true for Germany as well and called the Wirtschaftswunder. https://en.wikipedia.org/wiki/Wirtschaftswunder https://en.wikipedia.org/wiki/Wirtschaftswunder This period of fast growth in Germany happened a bit later than in the US, more like in the 60', 70'.
imtringued 5y ago
The bombs not only destroy the city, they also destroy the hubris. It wouldn't surprise me if most wars are motivated by land disputes because land is one of the few things that can only be protected and obtained through violence.