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The absence of something like a land value tax, and/or the current zoning/tax regime, can cause distortions in the market when things change, also. San Fransis
by mikem170 5y ago
The absence of something like a land value tax, and/or the current zoning/tax regime, can cause distortions in the market when things change, also.
San Fransisco is a good example, where new housing is not being built to satisfy demand, causing property values to increase, and property taxes are prevented from increasing.
Children can't afford to live in the neighborhood where they grew up because housing costs too much, older people can't downsize because they'll loose their tax breaks, teachers and police officers can't afford to live in the neighborhoods they service, the character of the neighborhood changes as it gentrifies as only the rich can afford to move there, increasing income inequality as the rentier class grows richer through their subsidized investments, etc.
- valenterry 5y agoSo, how exactly does "the absence of something like a land value tax (...) cause distortions in the market when things change", all other factors being equal? I fail do get that point and in your example, you don't explain how property value increases would have not happened in the existance of a land value tax.
- mikem170 5y agoMy assumption was that density would be allowed to increase as part of a land value tax regime, since that is what it is meant to encourage. More supply of housing. The OP mentioned concerns about changing to a land value tax. I was throwing out there the fact that there are also problems under the current zoning regime, like those I mentioned in San Fransisco, a drastic example.