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It seems like the biggest challenge to Georgism is that municipality/county/state/federal regulations on land use would have a significant effect on land value.

by jmole 4y ago

It seems like the biggest challenge to Georgism is that municipality/county/state/federal regulations on land use would have a significant effect on land value. A landlord might lobby for restrictive land use policy while sitting on a parcel, and then lobby for opening those restrictions when it comes time to sell. Essentially avoiding the tax by using government policy to suppress the true land value. There are solutions to this of course, but they come down to zoning and land use regulation, which is sort of the core of all our other problems with real estate in America.

zozbot234 4y ago
> municipality/county/state/federal regulations on land use would have a significant effect on land value. That's not "a challenge" it's a positive side effect. Those government institutions would be enabled to internalize the value that they create, which is presently being captured by random private parties that did not create it.
- TimPC 4y ago
  I agree that there is a positive side effect here in that municipalities now have a strong incentive to rezone in ways that increase land value since they capture a portion of that value from their share of the LVT.
- jmole 4y ago
  Look at the case of Atherton, CA - multi-million dollar home values due to city ordinances around minimum lot size and land usage. The land value here is created by scarcity, and driven largely by the success of the greater metro area. But if you are trying to value this land from a Georgist perspective, and one that takes into account property zoning and use requirements, the land is worth much less than it should be due to the restrictions, and would be taxed lower than parcels of similar size in nearby cities. This seems, in theory, to reward obstinate enclaves of low-density development within larger metros. The homeowners have no reason to elect a council that would vote against their interests in this respect, and their taxes would stay low.
  - TimPC 4y ago
    No one is arguing Georgist tax policy will solve all of zoning. We will still have some issues with land use and no system is absolutely perfect. Still I think on the balance this is a vast improvement over the status quo.
TimPC 4y ago
The problem is current speculation on land is relatively easy. Having to lobby for a change in zoning one-way when you buy the land and having to take on the risk of not being able to get the change of zoning back the other way when you sell it is a significant risk. I'd also argue because LVT rates are much higher as percentages than property tax rates, holding the land would still be more expensive than the solution. I agree there are also significant issues with zoning, but zoning alone won't solve the problem. A bunch of people capture a bunch of economic rents unearned, and it would be much better for government to capture these economic rents as part of the system and charge us less tax on things that actually are earned.

by jmole 4y ago

zozbot234 4y ago

> municipality/county/state/federal regulations on land use would have a significant effect on land value. That's not "a challenge" it's a positive side effect. Those government institutions would be enabled to internalize the value that they create, which is presently being captured by random private parties that did not create it.

TimPC 4y ago
I agree that there is a positive side effect here in that municipalities now have a strong incentive to rezone in ways that increase land value since they capture a portion of that value from their share of the LVT.
jmole 4y ago
Look at the case of Atherton, CA - multi-million dollar home values due to city ordinances around minimum lot size and land usage. The land value here is created by scarcity, and driven largely by the success of the greater metro area. But if you are trying to value this land from a Georgist perspective, and one that takes into account property zoning and use requirements, the land is worth much less than it should be due to the restrictions, and would be taxed lower than parcels of similar size in nearby cities. This seems, in theory, to reward obstinate enclaves of low-density development within larger metros. The homeowners have no reason to elect a council that would vote against their interests in this respect, and their taxes would stay low.
- TimPC 4y ago
  No one is arguing Georgist tax policy will solve all of zoning. We will still have some issues with land use and no system is absolutely perfect. Still I think on the balance this is a vast improvement over the status quo.

TimPC 4y ago

The problem is current speculation on land is relatively easy. Having to lobby for a change in zoning one-way when you buy the land and having to take on the risk of not being able to get the change of zoning back the other way when you sell it is a significant risk. I'd also argue because LVT rates are much higher as percentages than property tax rates, holding the land would still be more expensive than the solution. I agree there are also significant issues with zoning, but zoning alone won't solve the problem. A bunch of people capture a bunch of economic rents unearned, and it would be much better for government to capture these economic rents as part of the system and charge us less tax on things that actually are earned.