4 ms·

If I sent you a picture of a home, and I asked you what it was worth, you wouldn't be able to answer me until I first mentioned it was in the middle of SF or if

If I sent you a picture of a home, and I asked you what it was worth, you wouldn't be able to answer me until I first mentioned it was in the middle of SF or if it was in the middle of the Arizona desert. The majority of urban values are not the value of the improvements but the value of the land. The value of the unimproved value of land comes from your neighbors. It comes from your city. When roads and sewers and train stations are built, the value of being close to that infrastructure is given to the existing landowner. By properly returning this value to the city that created it, it gives them funding that they can use to build more infrastructure. Eventually with a Land Value Tax is in place, what you propose of building new cities will happen. If you treat a city like a company, we might even see investment companies funding new cities. They make an investment of an infrastructure, get a profit, then they can use those profits and give back to their shareholders - the citizens. Or they could use those profits to build another city. The existing paradigm doesn't allow proper investment. Right now they only charge for their costs and let the landowners take their share while the renters don't see a dime. Imagine if a company was not allowed to make a profit, and could only sell for a cost. That's exactly what happens with real estate today. They let landowners sit on empty lots that appreciate while they do nothing. They incentivize minimum parking requirements and single family zoned cities.

tharkun__ 4y ago
If I sent you a picture of a vacant piece of land in the middle of New York City's best neighborhood and asked you what it was worth, could you answer me? You wouldn't be able to until I told you what kind of home you are allowed to build. If I only allow you to build a shack or make it a park you won't be able to extract any money by renting it out and thus you wouldn't buy it at any price, even though the neighborhood should command a steep price. If on the other hand I allow you to build a sky scraper of n storeys high, you will now be able to given other information on rents in the area that people are willing to pay.
- ItsMonkk 4y ago
  Yes, land use is one factor. What is interesting is that the dynamic actually flips once there is adequate zoning. Take a look at this[0] video on Tokyo zoning and how he talks about living in an industrial zoned area. He talks about how it's cheaper to do so, and if you want to move to a single family zoned area, it's actually more expensive! Under the current system, landowners want their own land to be zoned as high as possible, while they want everyone else's land to be zoned as low as possible. Since 1 < everyone else, when people vote on zoning it is zoned as low as possible. With a LVT the system flips, everyone wants their land to be zoned as low as they desire, and they want everyone else's land to be zoned as high as possible. They would only accept land zoned restrictively if those people would pay higher taxes for the exclusive use of it. This is a system with proper incentives. [0]: https://www.youtube.com/watch?v=wfm2xCKOCNk https://www.youtube.com/watch?v=wfm2xCKOCNk
  - tharkun__ 4y ago
    I don't see how one follows from the other. In either system living in an industrial zone (or on the edge of it) will cost less as it is less desirable to live there (noise, air pollution, smells, further from grocery store, no parks etc) and nobody in their right mind would pay high rent there. Nothing to do with land value taxes. Zoning changes what people will build there (we assumed it was even legal to have housing in an industrial zone there). If you rezone a residential area industrial and make it illegal to have housing there guess what will happen (assuming there's demand for industrially zoned areas)
    - ItsMonkk 4y ago
      Your argument is that places that are zoned lower are worth less, and places that are zoned higher are worth more. That's only true in the existing paradigm. What would be true in the new paradigm is that places would only allowed to be zoned lower if people are willing to pay for that exclusive access. It's not just industrial areas, all higher zoned areas would be cheaper than lower zoned areas. Land Value Tax incentivizes proper zoning, as the more scarce the housing is, the higher the tax. Proper zoning(like Tokyo has without a land value tax) flips the structure.

tharkun__ 4y ago

If I sent you a picture of a vacant piece of land in the middle of New York City's best neighborhood and asked you what it was worth, could you answer me? You wouldn't be able to until I told you what kind of home you are allowed to build. If I only allow you to build a shack or make it a park you won't be able to extract any money by renting it out and thus you wouldn't buy it at any price, even though the neighborhood should command a steep price. If on the other hand I allow you to build a sky scraper of n storeys high, you will now be able to given other information on rents in the area that people are willing to pay.

ItsMonkk 4y ago
Yes, land use is one factor. What is interesting is that the dynamic actually flips once there is adequate zoning. Take a look at this[0] video on Tokyo zoning and how he talks about living in an industrial zoned area. He talks about how it's cheaper to do so, and if you want to move to a single family zoned area, it's actually more expensive! Under the current system, landowners want their own land to be zoned as high as possible, while they want everyone else's land to be zoned as low as possible. Since 1 < everyone else, when people vote on zoning it is zoned as low as possible. With a LVT the system flips, everyone wants their land to be zoned as low as they desire, and they want everyone else's land to be zoned as high as possible. They would only accept land zoned restrictively if those people would pay higher taxes for the exclusive use of it. This is a system with proper incentives. [0]: https://www.youtube.com/watch?v=wfm2xCKOCNk https://www.youtube.com/watch?v=wfm2xCKOCNk
- tharkun__ 4y ago
  I don't see how one follows from the other. In either system living in an industrial zone (or on the edge of it) will cost less as it is less desirable to live there (noise, air pollution, smells, further from grocery store, no parks etc) and nobody in their right mind would pay high rent there. Nothing to do with land value taxes. Zoning changes what people will build there (we assumed it was even legal to have housing in an industrial zone there). If you rezone a residential area industrial and make it illegal to have housing there guess what will happen (assuming there's demand for industrially zoned areas)
  - ItsMonkk 4y ago
    Your argument is that places that are zoned lower are worth less, and places that are zoned higher are worth more. That's only true in the existing paradigm. What would be true in the new paradigm is that places would only allowed to be zoned lower if people are willing to pay for that exclusive access. It's not just industrial areas, all higher zoned areas would be cheaper than lower zoned areas. Land Value Tax incentivizes proper zoning, as the more scarce the housing is, the higher the tax. Proper zoning(like Tokyo has without a land value tax) flips the structure.