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> tenants will somehow be able to use the land without paying the land rent. I believe proponents of Georgist Land Taxes generally believe that rents are alrea

> tenants will somehow be able to use the land without paying the land rent. I believe proponents of Georgist Land Taxes generally believe that rents are already as high as they can be. This seems reasonable for areas with housing shortage, as housing is a very inelastic commodity as far as commodities go. However, it might not be a good assumption for areas with a surplus of housing. I do know (multiple!) people who each have multiple properties in Austin (e.g. a suburb house and a downtown condo) who are not renting them out after moving to California. Currently the property tax is offset by rising property prices and its not worth the hassle/risk to put tenants into the properties. A higher property tax would absolutely cause them to either rent out the units or sell them, increasing housing supply. Saudi Arabia finally created their first tax ever while I was there. It was a tax on un-developed land inside city limits. Saudi oligarchs would buy empty land and just leave it barren, because the property value would go up and there was no cost to hold it. This led to a big housing shortage. By taxing unimproved land, Saudi was able to encourage a big boom in condominium development. I believe proponents of higher land taxes are trying to do something similar, but instead of taxing "undeveloped" land, they are aiming to tax "under-developed" land to try to spur additional unit construction.

PragmaticPulp 5y ago
> Currently the property tax is offset by rising property prices and its not worth the hassle/risk to put tenants into the properties. Depending on the local laws, leaving properties empty can actually be riskier than having them occupied. I had a friend struggle to evict squatters who moved into his rental property while it was vacant for a few weeks between tenants for upgrades. He lost months trying to get them evicted and they did a lot of damage to the house because they didn’t have anything to lose. Houses are also tough assets to just sit on because they slowly decay over time and require periodic maintenance and updates, even if nobody is living there. An empty house can actually accumulate damage faster than an occupied house because nobody is there to notice leaks or other problems. Leaving a property empty is definitely not a normal situation outside of maybe a few select markets with outlier (bubble) levels of appreciation and speculation. Building an entire tax system around this possibility doesn’t seem like a good idea.
sokoloff 5y ago
> I believe proponents of Georgist Land Taxes generally believe that rents are already as high as they can be. Rents are a function of supply and demand and demand may very well be near a point where there is not much more willingness to pay on the part of tenants. That doesn't mean that arbitrary changes to supply will leave resulting rents unaffected. (If government makes rental property durably unattractive as an investment, we should expect the supply of that property to diminish.)

PragmaticPulp 5y ago

> Currently the property tax is offset by rising property prices and its not worth the hassle/risk to put tenants into the properties. Depending on the local laws, leaving properties empty can actually be riskier than having them occupied. I had a friend struggle to evict squatters who moved into his rental property while it was vacant for a few weeks between tenants for upgrades. He lost months trying to get them evicted and they did a lot of damage to the house because they didn’t have anything to lose. Houses are also tough assets to just sit on because they slowly decay over time and require periodic maintenance and updates, even if nobody is living there. An empty house can actually accumulate damage faster than an occupied house because nobody is there to notice leaks or other problems. Leaving a property empty is definitely not a normal situation outside of maybe a few select markets with outlier (bubble) levels of appreciation and speculation. Building an entire tax system around this possibility doesn’t seem like a good idea.

sokoloff 5y ago

> I believe proponents of Georgist Land Taxes generally believe that rents are already as high as they can be. Rents are a function of supply and demand and demand may very well be near a point where there is not much more willingness to pay on the part of tenants. That doesn't mean that arbitrary changes to supply will leave resulting rents unaffected. (If government makes rental property durably unattractive as an investment, we should expect the supply of that property to diminish.)