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Luckily a San Franciscan figured it all out over one hundred years ago: > THE GREAT PROBLEM IS SOLVED. We are able to explain social phenomena that have appall

by rcpt 3y ago

Luckily a San Franciscan figured it all out over one hundred years ago: > THE GREAT PROBLEM IS SOLVED. We are able to explain social phenomena that have appalled philanthropists and perplexed statesmen all over the civilized world. We have found the reason why wages constantly tend to a minimum, giving but a bare living, despite increase in productive power: > As productive power increases, rent tends to increase even more — constantly forcing down wages. > Advancing civilization tends to increase the power of human labor to satisfy human desires. We should be able to eliminate poverty. But workers cannot reap these benefits because they are intercepted. Land is necessary to labor. When it has been reduced to private ownership, the increased productivity of labor only increases rent. Thus, all the advantages of progress go to those who own land. Wages do not increase — wages cannot increase. The more labor produces, the more it must pay for the opportunity to make anything at all. http://www.henrygeorge.org/pchp23.htm http://www.henrygeorge.org/pchp23.htm A Land Value Tax fixes our problems but in California we voted in Prop 13 which is about as far from that as you can get. And now here we are.

Dig1t 3y ago
There is already an incentive to build densely and provide more housing, developers already want to do this because they make more money by doing so. They are literally not allowed to build anything other than single family homes though, the local homeowners actually control what is allowed to be built. That is to say: the people who have an incentive to keep housing supply low are the ones deciding what is allowed to be constructed in their town. If I go buy a piece of land in Cupertino and I want to build an apartment complex, I have to go apply for permits and get approval from the city of Cupertino zoning board. The people on that board are all people who live in Cupertino that own single family homes, they have a strong incentive to deny my application if I am building my apartment complex anywhere near their neighborhood. Basically every single city in California has zoning laws that prohibit you from building anything other than suburban single family homes in most of the town. You can fix the housing crisis by passing a law that limits the power of the zoning board to deny permits for these types of housing. Take a look at the Cupertino zoning map: https://map.gridics.com/us/ca/cupertino#11.93/37.31591/-122.033/0/45 https://map.gridics.com/us/ca/cupertino#11.93/37.31591/-122.... if you click layers -> planning -> zoning you can see an overlay of the zoning for the whole city. The light beige color is "single family" zoned, meaning that nobody is allowed to build anything other than low-density homes. Notice how _most_ of the city is designated "single family". This is the cause of the entire problem. Nobody is allowed to build anything more dense than the single family homes that are already there. Not-so-coincidentally, Cupertino is one of the most expensive places to live in the US. Look at Houston, TX. They have no zoning laws (it's not perfect they still have deed restrictions which sometimes act similarly to zoning laws), and it is a massive city. The median house price is ~340k, something that most normal people can afford. There is a clear correlation between reduced zoning restrictions and lower housing costs.
- carom 3y ago
  It's really insane. Just remove everything that distorts the market. Restrictive zoning limits competition for a piece of land. Rent control distorts prices. Affordable units make building unprofitable. Get rid of that and housing will be so abundant.
- ipaddr 3y ago
  The Houston method created massive urban sprawl and created mostly single family homes. Review boards that help shape a city provide a balance can go a longer way to a better city. The Cupertino example shows what happens when you don't need industry and everyone works elsewhere.
- KerrAvon 3y ago
  Didn't SB50 purport to fix this?
- jcranmer 3y ago
  Houston has a higher single-family detached-home ratio than the Bay Area [1]. It's not that Houston's lack of zoning laws lets more people build the missing middle that is lacking in the Bay Area; it's that the geography of Texas allows growth-by-sprawl in a way that is lacking in the Bay Area, which has to grow by densification. When I visited Houston, the lack of sane urban planning was immediately evident. It is insanity to have a neighborhood of single-family detached housing literally across the street from 20-story towers adjacent to the transit line--that's exactly what Houston has. [1] See https://www.census.gov/construction/bps/visualizations/msamap/index.html https://www.census.gov/construction/bps/visualizations/msama..., you have to hover MSAs and do the math yourself for precise ratios, but the difference between Houston and the San Jose MSAs is stark enough to not need to do the calculations.
- conk 3y ago
  If the problem is zoning that’s blocking density then why is the density of Cupertino (5,300/sq mile) almost double that of Houston (3000/sq mile)? Houston is the example of why cities need zoning regs. No one wants to buy a home and have a high rise erected next to them. Cheap housing comes from cheap land and cheap labor. Cupertino had neither of these and will continue to be expensive as long as there are companies paying high salaries in the area. It doesn’t matter if you allow high density housing if it costs $3M/single family home to acquire the land.
biomcgary 3y ago
Another way of addressing the problem (in terms of the framing above) is to make land unnecessary to labor. Universal work from anywhere would substantially reduce the ability to extract rent because it would increase competition among a much larger group of landowners. Why do you think all the landowners are so eager for the peons to RTO?
- rcpt 3y ago
  I'm a little bit skeptical that we could destroy our business clusters and remain equally competitive on the world stage. Seems a lot easier to tax land.
jdasdf 3y ago
Land Value Tax simply does not work. It fixes nothing, and causes severe problems
- kinghajj 3y ago
  Why not, and what problems would it cause?
  - gretch 3y ago
    I’m not the poster you replied to, but for starters, the problem is not that we don’t have enough money. The whole article is about how CA spent $17B and got so little for it. So how is having even more state money via LVT going to do anything? We’re just funneling this money into whatever black hole it’s going into
    - rcpt 3y ago
      Prop 13 distorts incentives. It's why we have private country clubs in the middle of Los Angeles, dilapidated shacks on Google's global HQ, and surface parking lots in San Francisco proper. It's also why California has the highest impact fees in the nation by a wide margin. We should end Prop 13 and make it budget neutral by ending our other taxes. But even if we repealed Prop 13 and then set the money on fire it'd be a win for housing.
  - jdasdf 3y ago
    [This blog post goes into far greater detail on it than I ever could](https://orionsarm.com/fm_store/Critique%20of%20Georgism.htm https://orionsarm.com/fm_store/Critique%20of%20Georgism.htm) The gist of it is that LVT fundamentally makes no sense because land is fundamentally worthless, and so taxing based on the value of the land would simply result in either extremely low taxes that would require a meaningful decrease in state spending, or would result in mis-allocation of resources to less than efficient locations purely on a reduced tax rate, or would result in vast swaths of land being negative value since the profits that could be generated in them would not cover the tax. Furthermore, LVT doesn't fix the underlying problem, which is that the state mismanages the earnings it receives.
acchow 3y ago
Wages do increase, but then it's all spent on housing. And lately, also spent on healthcare.
- WalterBright 3y ago
  The incredible cost increases for healthcare started in 1968 with government interference in it. The more interference, the more it costs. The same effect happens with every industry the government massively interferes with. For example, education, and real estate. Look what happens in industries that experience very low levels of government interference, like software. Costs trend to zero.
  - acchow 3y ago
    This demonstrates that the government will intervene in industries that have too much pricing power, right? Since the people demand help from their political representatives?
    - WalterBright 3y ago
      Or that government interference: 1. is costly 2. encumbers competition which increases pricing power In any case, if the government is intervening to reduce pricing power, it clearly is failing spectacularly at that. Weirdly, the government accused Microsoft of having a monopoly because it gave Explorer away for free. How is that pricing power?
geoelectric 3y ago
There's a difference between an LVT and a property tax. LVT is just on the footprint, the unimproved land, vs. a standard property tax (what Prop 13 more or less freezes) which includes the value of the buildings on it. George was pretty big on the idea that you only can only ethically tax natural assets taken away from the community--e.g., collect ongoing ground rent in exchange for the right to deed a chunk of land and prevent others from using it--and that those funds should then be redistributed to the community as compensation for their loss. He didn't think we should discourage success by taxing labor, trade, and improvements that don't come from nature. I agree Prop 13 has been horrible for a lot of reasons. But even without it we wouldn't have anything like a Georgist LVT--we'd just have a lot more rent-taking by the state on improvements, on top of all those other disincentives he didn't like, and likely still with no citizen's dividend/UBI to show for it. Home prices might not be quite so damned wacky, though, if we didn't put such a huge disincentive on turnover.
- rcpt 3y ago
  Yes you're right. Undoing Prop 13 wouldn't mean instant Land Value Tax. But Ill still maintain that Prop 13 is pretty close to a polar opposite of Land Value Taxation
deleted 3y ago
[deleted]

by rcpt 3y ago

Dig1t 3y ago

There is already an incentive to build densely and provide more housing, developers already want to do this because they make more money by doing so. They are literally not allowed to build anything other than single family homes though, the local homeowners actually control what is allowed to be built. That is to say: the people who have an incentive to keep housing supply low are the ones deciding what is allowed to be constructed in their town. If I go buy a piece of land in Cupertino and I want to build an apartment complex, I have to go apply for permits and get approval from the city of Cupertino zoning board. The people on that board are all people who live in Cupertino that own single family homes, they have a strong incentive to deny my application if I am building my apartment complex anywhere near their neighborhood. Basically every single city in California has zoning laws that prohibit you from building anything other than suburban single family homes in most of the town. You can fix the housing crisis by passing a law that limits the power of the zoning board to deny permits for these types of housing. Take a look at the Cupertino zoning map: https://map.gridics.com/us/ca/cupertino#11.93/37.31591/-122.033/0/45 https://map.gridics.com/us/ca/cupertino#11.93/37.31591/-122.... if you click layers -> planning -> zoning you can see an overlay of the zoning for the whole city. The light beige color is "single family" zoned, meaning that nobody is allowed to build anything other than low-density homes. Notice how _most_ of the city is designated "single family". This is the cause of the entire problem. Nobody is allowed to build anything more dense than the single family homes that are already there. Not-so-coincidentally, Cupertino is one of the most expensive places to live in the US. Look at Houston, TX. They have no zoning laws (it's not perfect they still have deed restrictions which sometimes act similarly to zoning laws), and it is a massive city. The median house price is ~340k, something that most normal people can afford. There is a clear correlation between reduced zoning restrictions and lower housing costs.

carom 3y ago
It's really insane. Just remove everything that distorts the market. Restrictive zoning limits competition for a piece of land. Rent control distorts prices. Affordable units make building unprofitable. Get rid of that and housing will be so abundant.
ipaddr 3y ago
The Houston method created massive urban sprawl and created mostly single family homes. Review boards that help shape a city provide a balance can go a longer way to a better city. The Cupertino example shows what happens when you don't need industry and everyone works elsewhere.
KerrAvon 3y ago
Didn't SB50 purport to fix this?
jcranmer 3y ago
Houston has a higher single-family detached-home ratio than the Bay Area [1]. It's not that Houston's lack of zoning laws lets more people build the missing middle that is lacking in the Bay Area; it's that the geography of Texas allows growth-by-sprawl in a way that is lacking in the Bay Area, which has to grow by densification. When I visited Houston, the lack of sane urban planning was immediately evident. It is insanity to have a neighborhood of single-family detached housing literally across the street from 20-story towers adjacent to the transit line--that's exactly what Houston has. [1] See https://www.census.gov/construction/bps/visualizations/msamap/index.html https://www.census.gov/construction/bps/visualizations/msama..., you have to hover MSAs and do the math yourself for precise ratios, but the difference between Houston and the San Jose MSAs is stark enough to not need to do the calculations.
conk 3y ago
If the problem is zoning that’s blocking density then why is the density of Cupertino (5,300/sq mile) almost double that of Houston (3000/sq mile)? Houston is the example of why cities need zoning regs. No one wants to buy a home and have a high rise erected next to them. Cheap housing comes from cheap land and cheap labor. Cupertino had neither of these and will continue to be expensive as long as there are companies paying high salaries in the area. It doesn’t matter if you allow high density housing if it costs $3M/single family home to acquire the land.

biomcgary 3y ago

Another way of addressing the problem (in terms of the framing above) is to make land unnecessary to labor. Universal work from anywhere would substantially reduce the ability to extract rent because it would increase competition among a much larger group of landowners. Why do you think all the landowners are so eager for the peons to RTO?

rcpt 3y ago
I'm a little bit skeptical that we could destroy our business clusters and remain equally competitive on the world stage. Seems a lot easier to tax land.

jdasdf 3y ago

Land Value Tax simply does not work. It fixes nothing, and causes severe problems

kinghajj 3y ago
Why not, and what problems would it cause?
- gretch 3y ago
  I’m not the poster you replied to, but for starters, the problem is not that we don’t have enough money. The whole article is about how CA spent $17B and got so little for it. So how is having even more state money via LVT going to do anything? We’re just funneling this money into whatever black hole it’s going into
  - rcpt 3y ago
    Prop 13 distorts incentives. It's why we have private country clubs in the middle of Los Angeles, dilapidated shacks on Google's global HQ, and surface parking lots in San Francisco proper. It's also why California has the highest impact fees in the nation by a wide margin. We should end Prop 13 and make it budget neutral by ending our other taxes. But even if we repealed Prop 13 and then set the money on fire it'd be a win for housing.
- jdasdf 3y ago
  [This blog post goes into far greater detail on it than I ever could](https://orionsarm.com/fm_store/Critique%20of%20Georgism.htm https://orionsarm.com/fm_store/Critique%20of%20Georgism.htm) The gist of it is that LVT fundamentally makes no sense because land is fundamentally worthless, and so taxing based on the value of the land would simply result in either extremely low taxes that would require a meaningful decrease in state spending, or would result in mis-allocation of resources to less than efficient locations purely on a reduced tax rate, or would result in vast swaths of land being negative value since the profits that could be generated in them would not cover the tax. Furthermore, LVT doesn't fix the underlying problem, which is that the state mismanages the earnings it receives.

acchow 3y ago

Wages do increase, but then it's all spent on housing. And lately, also spent on healthcare.

WalterBright 3y ago
The incredible cost increases for healthcare started in 1968 with government interference in it. The more interference, the more it costs. The same effect happens with every industry the government massively interferes with. For example, education, and real estate. Look what happens in industries that experience very low levels of government interference, like software. Costs trend to zero.
- acchow 3y ago
  This demonstrates that the government will intervene in industries that have too much pricing power, right? Since the people demand help from their political representatives?
  - WalterBright 3y ago
    Or that government interference: 1. is costly 2. encumbers competition which increases pricing power In any case, if the government is intervening to reduce pricing power, it clearly is failing spectacularly at that. Weirdly, the government accused Microsoft of having a monopoly because it gave Explorer away for free. How is that pricing power?

geoelectric 3y ago

There's a difference between an LVT and a property tax. LVT is just on the footprint, the unimproved land, vs. a standard property tax (what Prop 13 more or less freezes) which includes the value of the buildings on it. George was pretty big on the idea that you only can only ethically tax natural assets taken away from the community--e.g., collect ongoing ground rent in exchange for the right to deed a chunk of land and prevent others from using it--and that those funds should then be redistributed to the community as compensation for their loss. He didn't think we should discourage success by taxing labor, trade, and improvements that don't come from nature. I agree Prop 13 has been horrible for a lot of reasons. But even without it we wouldn't have anything like a Georgist LVT--we'd just have a lot more rent-taking by the state on improvements, on top of all those other disincentives he didn't like, and likely still with no citizen's dividend/UBI to show for it. Home prices might not be quite so damned wacky, though, if we didn't put such a huge disincentive on turnover.

rcpt 3y ago
Yes you're right. Undoing Prop 13 wouldn't mean instant Land Value Tax. But Ill still maintain that Prop 13 is pretty close to a polar opposite of Land Value Taxation

deleted 3y ago

[deleted]