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Those supply issues you mention are true but ultimately not the key. Cities are expensive, but we have endless amounts of cheaper suburbs. Yet people still wan
by nwah1 5y ago
Those supply issues you mention are true but ultimately not the key.
Cities are expensive, but we have endless amounts of cheaper suburbs. Yet people still want to live in cities despite the price. Why is that? Because they get a value from that, and that value is reflected in higher land values
Adding more supply of buildings doesn't make the land any cheaper. In fact it would make it more expensive via agglomeration effects.
So the issue for affordability is land value. And the way to reduce it without destroying the underlying desirability is to clamp down on land speculation.
This can be done by shifting taxes off of buildings and onto land.
- randomhodler84 5y agoBy George I think you might be on to something there…
- jakecopp 5y ago> Yet people still want to live in cities despite the price. Why is that? Because they get a value from that, and that value is reflected in higher land values Yep agreed. > Adding more supply of buildings doesn't make the land any cheaper. We don't need land to be any cheaper - we need more dwellings (apartments). Nobody cares about land prices in the middle of large cities (but developers), they care about apartment prices/rent. > In fact it would make it more expensive via agglomeration effects. If by agglomeration effects you mean zoning for allowing more buildings - yes, relaxed zoning laws increase land prices AND increase supply of apartments. This is a good thing for housing affordability! > So the issue for affordability is land value. This does not follow as I believe the previous points are incorrect. > This can be done by shifting taxes off of buildings and onto land. Land taxes are an excellent idea - because they encourage building the maximum number of apartments allowed (more housing => more supply => cheaper housing), rather that sitting on an empty block of land speculating (which does greater society no good). Feel free to correct me if I've missed something!