5 ms·

Completely disagree. If I buy a piece of land and spend to make improvements, I’d expect to sell at a price that justifies the investment or let my kids inherit

• zz865 5y ago
  We're on this thread here to make housing more affordable, not to ensure your kids get your investment. Actually with a 99 year lease they probably will get it, just not your grandkids.
  • kory 5y ago
    Property improvements on personal residences aren't a financial investment. They usually don't have a high, or even positive, rate of return. Rather, they're improvements to your home and your quality of life. They're also your kids' home, and could be their kids' home, and so on. Government bureaucrats should not have free control over those improvements after 100 years. Making all land rentable clearly isn't about encouraging development and affordability; a land value tax could do that. Making all land only rentable is clearly a scheme to allow government to steal valuable land from the current owners who otherwise could afford the taxes and wouldn't sell. Many NIMBYs don't even care about their home value (unless they've purchased recently and don't want to be underwater on their mortgage). If you actually talk to most homeowners, especially the long term ones, they care much more about the neighborhood and home they've built so hard to create. Seeing a life of memories razed for concrete and glass townhomes/towers isn't an easy pill for anyone to swallow. All that said, we do need to upzone for affordability. But all of this talk of "we aren't protecting your investment" is misguided, that isn't what single family homeowners care about.
    • novok 5y ago
      Buildings are actually a deprecating asset, even if you renovate them, outside of maybe some rare heritage art pieces or other similar rare things. The only reason why RE 'goes up' is the value of the land underneath. You can easily demonstrate this by two neighbor buildings on similar kinds of land with equal sqft, the newer building usually sells for significantly more than the older 50 yo one.
      • kory 5y ago
        There are some exceptions (eg. older craftsman houses in Portland/Seattle seem to be appreciating as more of them are razed for higher density). Craftsman homes are much more popular in those cities than any style besides possibly mid century modern.
• burnished 5y ago
  Your statement would be more compelling if it interesected with the person you responded to, maybe some evidence that the housing in Singapore responds in the way that you predict here. As it stands you're firmly in "old man yelling at cloud" territory with your predictions.
  • deleted 5y ago
    [deleted]
  • kory 5y ago
    To be fair, you didn't provide counter evidence for your claim I'm a "yelling old man," either.
    • burnished 5y ago
      OK. >If I buy a piece of land and spend to make improvements, I’d expect to sell at a price that justifies the investment or let my kids inherit my life’s work. >Land leases massively disincentivize making improvements to land or structures, because it’s not even yours. What a great way to ensure the quality of our neighborhoods goes down over time. There you go. Big statements about hypothetical expectations and pessimistic predictions for the future treated as though they were obvious, but really just re-statements of your own misgivings. Classic 'yelling old man'. You can hear dire predictions of that sort at any time now thanks to the internet. My favorite recent example was a round-a-bout coming to some rural area and the facebook announcement (?!) getting dire predictions of chaos and doom with the same sort of structure as the second example.
      • kory 5y ago
        Ok, so you don’t have counter argument then. Good to know.
• nostrademons 5y ago
  There are various ways to make this work out, eg. let leaseholders sell improvements on the land to the next leaseholder at time of transfer, which would then factor into who's willing to lease the land next and how much they are willing to pay for it. At that point it's probably easier administratively to say that you "own" the property and are paying a "land value tax" rather than a lease, but the principle is the same. The government receives the economic returns from the land being scarce, from its location, and from public works that increase its utility. The developer or property owner receives the economic returns from improvements they personally make to the property. What could be more fair?
  • kory 5y ago
    Landowners should be paying a land value tax equivalent to the value of their property. That way local services are well-funded. What I"m not ok with is a lease system where the stability of your family and descendants is put at risk if the government refuses to re-lease the property to you. Who knows how tyrannical the government will be in a 100 years. Ownership is a stronger model. Your property can't easily be taken away by bureaucrats so long as you pay taxes on time.
    • tzs 5y ago
      > Landowners should be paying a land value tax equivalent to the value of their property. That way local services are well-funded. Why is that a good way to fund local services? The costs to provide most services have nothing to do with the value of the property, so why should my neighbor pay more for them than I do just because their house is on a bigger lot?
      • kory 5y ago
        The difference would be negligible unless the land is valuable enough that more improvements could be supported by local services and demand. For example, if your home sits in a hot area where there is high demand for apartments, the home with the larger lot would pay more taxes because the potential for the lot is much higher. Once the lot built to its potential, the tax per occupant would level to a fair cost per local government service used. Of course, the owner can continue to pay a higher tax burden to use more of the lot for themselves. Because they own the lot, the government can’t force them to do anything else. That’s how it should be. No government intervention / lease needed, just incentivize development by asking owners to pay an appropriate tax amount for the value of the space they occupy and let people make their own choices.
• shalmanese 5y ago
  A 1.01% property tax is financially equivalent to a 99 year lease, it's just that one is politically a lot more palatable in certain countries.
  • kory 5y ago
    Not really equivalent in general, though. You don't have to re-purchase after 100 years. There is no risk that the government refuses to re-lease the property to you.
    • yellowapple 5y ago
      That risk doesn't have to exist with land leases, either; it could very well (and in practice does) work exactly like LVT does (and indeed, at a 100% LVT, the difference between LVT v. a land lease is semantics) - i.e., with the current user of that land (i.e. the current LVT payer, or the current leaseholder) being in control of whether to keep paying LVT / renew the lease. If your lease on your apartment expires, do you think you're not given first dibs on whether to renew the lease? Same deal here.
• tzs 5y ago
  If the lease is sellable and for long enough term you still have incentive to make improvements. Say you buy a 99 year lease and plan to live there 20 years. When you are ready to leave you are selling the remaining 79 years on the lease. Your improvements should increase the price you get for the remainder of the lease. While the remaining term on the lease is still long it is not much different than owning (except that you might not be allowed to do things that harm the value of the property). As the remaining time on the lease goes down, it slowly shifts from being like owning (with similar incentives) to being like rental. I'd guess that for at least the first half of the lease (in the case of a 99 year lease) and maybe even up to 70 years so so into it there is plenty of incentive still for leaseholders to improve the property. So you end up with a property that goes through 3 phases. In phase 1 the people living there have incentives to improve it. Then in phase 2 they just have incentives to maintain it (except maybe the last leaseholder). Then in phase 3 the lease has ended and the property is back in the hands of whoever owns it. Phase 3 is the most interesting one I think. Imagine a development that was all 99 year leases starting at about the same time. When the leases all end the land is all back under the control of one entity. In the 100 years since the development was built a lot might have changed, and there might be some other better use for that land. That entity can then use the land for that. If the development instead had sold each lot instead of 99 year leasing them, then 100 years later when there is some better use for the land it might be much harder or even impossible to implement that. The question then is which is overall better? People owning their homes means there is always an incentive to improve the land and buildings. Long term sellable leases means that there is only such an incentive part of the time, but in exchange for that whole neighborhoods periodically become open to redevelopment. That could lead to more overall improvement in the long run for a city as a whole.
  • kory 5y ago
    I strongly oppose the existence of such an entity that has absolute control over land, especially if it’s a government. If you want affordability, land value tax will incentivize appropriate development. If you want to steal/take control over land arbitrarily from its users, land rent is a good choice. In my opinion, if someone owns land and can afford the tax, leave them be. Let them keep their land rather giving it to an entity that supposedly knows better what to do with the land than the occupant.
• deleted 5y ago
  [deleted]
• yellowapple 5y ago
  > If I buy a piece of land Why do you presuppose that land is something you should be able to buy outright? It's your improvements on that land that you (should) rightfully own and be able to sell or pass on to future generations; those improvements are the result of your labor, after all (be it directly or indirectly). The land is not; it existed for millions (if not billions) of years before you, and barring a literal Earth-shattering catastrophe will exist for billions of years after you. > Land leases massively disincentivize making improvements to land or structures, because it’s not even yours. They do the precise opposite. If you're going to take up space, you should be using it for its maximum potential - and that's exactly what things like land leases or land value taxes incentivize (since it's pretty pointless to spend that money if you don't intend to develop it to its full potential).