4 ms·

I would have assumed exactly the opposite in terms of urban land being uniform in value. 10 acres that are 30 minutes from Des Moines, IA are going to be very

I would have assumed exactly the opposite in terms of urban land being uniform in value. 10 acres that are 30 minutes from Des Moines, IA are going to be very similar in value (price people are willing to pay) compared to 10 acres that are 10 miles down the road. Rural land is generally quite uniform and more likely to be functionally the same. In an urban area, say Los Angeles, 10 acres in Malibu (an area with very high demand for property) is going to have a totally different value (again, price people are willing to pay) as compared to 10 acres 10 miles away in skid row. The problem, that other people have highlighted, is how do you (the government/IRS/agency in charge) determine the value of each of those land areas? Letting some city planners in LA decide that those two areas should have the same LVT, or allowing them to determine what tax each should have, is gifting a lot of power to people who may or may not be qualified, and may or may not experience any sort of consequence for poor decision making/ biased value assessment/ etc. The exact way that sort of value/tax-setting would play out would be very interesting, but the unintended consequences could end up being pretty bad. I've always thought it was interesting that property tax assessments don't just use the previous purchase price, and instead rely on a relatively arbitrary valuation. That could be one way to more accurately determine an LVT - make it a set percent of the previous purchase price of the land, that would allow the taxes to be priced in to land transactions. I still just don't love the idea at its core.

colinmhayes 4y ago
Now you've brought the horror that is prop 13 to a tax that is supposed to replace all other taxes. Things change in value, we have to account for that.
bee_rider 4y ago
With a land value tax we could at least come up with pretty straightforward equations, right? Some starting value from being in town, then add something for oceanfront property, then add something some extra bump based on distance from some set of amenities provided by the community (parks, subways, etc). It is at least possible to come up with something, unlike, what, the assessor's gut feeling about how nice your house is? This seems like it is putting much more arbitrary power in the hands of some random person.
- its_ethan 4y ago
  > Some starting value from being in town, then add something for oceanfront property, then add something some extra bump based on distance from some set of amenities provided by the community (parks, subways, etc). How do you know you weren't also supposed to take the floor plan or exterior paint color into consideration? How do you account for the value lost from having obnoxious neighbors? What happens when, in the future, a nice bookstore/coffee shop is opened up down the street, or alternatively a liquor store? Ultimately, how do you know if whatever equation you've constructed is exhaustive or "correct"? It might sound like "well then you just adjust the equation" but this wouldn't be without consequence. One outcome of getting that equation incorrect is that a home is valued at a point where the imposed tax prices out anyone from purchasing the home - it would sit empty/foreclosed for as long as it takes a local government bureaucracy to come in and attempt to re-assess its value. So you could effectively be removing houses from a competitive home buying market, which is going to increase the price of other homes until they too have priced people out of the area. Multiply that by entire zip codes, and while you're working on adjusting that equation, you could end up having a real shit show on your hands with a bunch of people being displaced or in worse financial positions. > It is at least possible to come up with something, unlike, what, the assessor's gut feeling about how nice your house is? This seems like it is putting much more arbitrary power in the hands of some random person. I agree with the point that a home assessment is strange and arbitrary, but you're really just saying we should replace the assessor who goes and visits a property with a group of assessor's that just come up with an equally arbitrary equation that gets blanket applied to entire cities? Why is that preferable to something like just using the previous home sale price or, honestly, just staying with the current system that we know is generally very functional?
  - bee_rider 4y ago
    You don't know the equation you came up with is correct, but it is at least describable, so if someone doesn't like it they can live elsewhere I guess, or argue about it at the next town hall session. If a bad equation is designed, then that's a problem, but it is a general bad governance problem that effects everyone, rather than an arbitrary lightning-strike problem like a bad assessment. Floor plan or paint color -- the point of a land value tax is that it is based on the value of the land. Floor plan and paint color would be improvements on the property, so they would be excluded. The current system is not very functional. Housing is not very affordable in most cities due to speculative real estate investment and under-development. I mean, we clearly get by, but just because the alternative is being homeless.
lordnacho 4y ago
Someone came up with this delicious game: Landowners decide for themselves what value their land has, and pay tax accordingly. But whatever they say the value is, someone else is allowed to buy it for.
- its_ethan 4y ago
  It's certainly a fun game, but does that mean if I decide my property is worth $100,000, accurate or not, I am forced to sell it just because someone comes along and decides they want to buy it? Also, is this a game that happens every year to allow for appreciation? For a realistic implementation, why not just use the fact that the landowner already decided what the value their land has when they purchased it and/or paid people to develop it. Why not just use those values?
  - lordnacho 4y ago
    I think you need a new value each year, otherwise of course if the economy goes well people will buy your land off you cheaply. So you get to decide your tax each year but if you save yourself too much someone else will grab the excess value.
    - TimPC 4y ago
      This game is terrible because even yearly is too slow. The property market went up 30% in my city this past year. If I set a fair price at the beginning of the year I’m forced to sell my house at a loss. Only if guess that I should overpay by at least 30% at the beginning of the year does my house remain unsold.

colinmhayes 4y ago

Now you've brought the horror that is prop 13 to a tax that is supposed to replace all other taxes. Things change in value, we have to account for that.

bee_rider 4y ago

With a land value tax we could at least come up with pretty straightforward equations, right? Some starting value from being in town, then add something for oceanfront property, then add something some extra bump based on distance from some set of amenities provided by the community (parks, subways, etc). It is at least possible to come up with something, unlike, what, the assessor's gut feeling about how nice your house is? This seems like it is putting much more arbitrary power in the hands of some random person.

its_ethan 4y ago
> Some starting value from being in town, then add something for oceanfront property, then add something some extra bump based on distance from some set of amenities provided by the community (parks, subways, etc). How do you know you weren't also supposed to take the floor plan or exterior paint color into consideration? How do you account for the value lost from having obnoxious neighbors? What happens when, in the future, a nice bookstore/coffee shop is opened up down the street, or alternatively a liquor store? Ultimately, how do you know if whatever equation you've constructed is exhaustive or "correct"? It might sound like "well then you just adjust the equation" but this wouldn't be without consequence. One outcome of getting that equation incorrect is that a home is valued at a point where the imposed tax prices out anyone from purchasing the home - it would sit empty/foreclosed for as long as it takes a local government bureaucracy to come in and attempt to re-assess its value. So you could effectively be removing houses from a competitive home buying market, which is going to increase the price of other homes until they too have priced people out of the area. Multiply that by entire zip codes, and while you're working on adjusting that equation, you could end up having a real shit show on your hands with a bunch of people being displaced or in worse financial positions. > It is at least possible to come up with something, unlike, what, the assessor's gut feeling about how nice your house is? This seems like it is putting much more arbitrary power in the hands of some random person. I agree with the point that a home assessment is strange and arbitrary, but you're really just saying we should replace the assessor who goes and visits a property with a group of assessor's that just come up with an equally arbitrary equation that gets blanket applied to entire cities? Why is that preferable to something like just using the previous home sale price or, honestly, just staying with the current system that we know is generally very functional?
- bee_rider 4y ago
  You don't know the equation you came up with is correct, but it is at least describable, so if someone doesn't like it they can live elsewhere I guess, or argue about it at the next town hall session. If a bad equation is designed, then that's a problem, but it is a general bad governance problem that effects everyone, rather than an arbitrary lightning-strike problem like a bad assessment. Floor plan or paint color -- the point of a land value tax is that it is based on the value of the land. Floor plan and paint color would be improvements on the property, so they would be excluded. The current system is not very functional. Housing is not very affordable in most cities due to speculative real estate investment and under-development. I mean, we clearly get by, but just because the alternative is being homeless.

lordnacho 4y ago

Someone came up with this delicious game: Landowners decide for themselves what value their land has, and pay tax accordingly. But whatever they say the value is, someone else is allowed to buy it for.

its_ethan 4y ago
It's certainly a fun game, but does that mean if I decide my property is worth $100,000, accurate or not, I am forced to sell it just because someone comes along and decides they want to buy it? Also, is this a game that happens every year to allow for appreciation? For a realistic implementation, why not just use the fact that the landowner already decided what the value their land has when they purchased it and/or paid people to develop it. Why not just use those values?
- lordnacho 4y ago
  I think you need a new value each year, otherwise of course if the economy goes well people will buy your land off you cheaply. So you get to decide your tax each year but if you save yourself too much someone else will grab the excess value.
  - TimPC 4y ago
    This game is terrible because even yearly is too slow. The property market went up 30% in my city this past year. If I set a fair price at the beginning of the year I’m forced to sell my house at a loss. Only if guess that I should overpay by at least 30% at the beginning of the year does my house remain unsold.