4 ms·

How is this “original unimproved” value determined? Presumably the improvements of the previous tenant have to factor in somewhere? When is the cut off point?

jabl 3y ago
The government keeps tabs on real estate deals and makes an estimate on the value of the unimproved land. Or for an extreme case, the government can buy some old property, demolish whatever building is left standing there, and the sell the lot to the highest bidder, giving a benchmark for land values in the area.
ameliaquining 3y ago
https://gameofrent.com/content/can-land-be-accurately-assessed https://gameofrent.com/content/can-land-be-accurately-assess... is a decent explanation of how this can be made to work.
afiori 3y ago
A method come from the sale of vacant lots (the land value is the sale price) or of buildings that are immediately demolished (the land value is the sale price minus demolition cost). Apparently even in dense cities a majority of land sales are like this.
- MichaelZuo 3y ago
  Even a vacant lot can be 'improved', e.g. a preexisting underground utility conduit has some non-zero impact on its value. Even a literal patch of dirt, with nothing going through it, is still 'improved' in value by distant structures, e.g. if a major highway passes by a half dozen miles away. And the 'improvement' is more than a comparable patch of dirt 20 miles away. So this part of Georgism never made sense to me.
  - jabl 3y ago
    The entire point of the LVT is that the land value includes things that your neighbors (or society in general) does to make your lot more valuable.
    - MichaelZuo 3y ago
      Did you get confused with a different comment chain? In response to the parent comments, my comment indicates that it's impossible to determine the 'unimproved value', because there are no records of land values during the times of pre-human habitation of the north american continent. Hence why I said 'So this part of Georgism never made sense to me.' It's supposed to be based on literally impossible to obtain information.
      - afiori 3y ago
        Under this lens "unimproved value" might be a red herring, the concept is "the market value of the lot after a complete demolition of everithing on it" or equivalently "the market price of the exclusive priviledge of being able to build things on a piece of land".
        MichaelZuo 3y ago
        Maybe you should take it up with the proponents of Georgism who use that term? And offer these reasons to switch. But just at a quick glance: "the market value of the lot after a complete demolition of everithing on it" doesn't make sense, because even a single disused subway tunnel could easily double the value of the land.
        afiori 3y ago
        There are things "on" the lot and things "around" the lot. An empty lot the right size to build a condo in front of a subway station is significantly more valuable than an otherwise identical lot 5km away from the closest subway station. A consequence is that what is built around you becomes the main factor in how many taxes you pay. Which is ok since what is build around you is also the main factor of how much value you can extract from the land you own. > Maybe you should take it up with the proponents of Georgism who use that term? the term is perfectly adeguate, for a given piece of land (like a lot you can build a condo on) you consider its value before any improvement ON it. The main conflict seems to be about either considering gigantic pieces of land or considering improvement that are not ON the piece of land but around it. For context[1]: > A land value tax (LVT) is a levy on the value of land without regard to buildings, personal property and other improvements upon it. [1] https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax

jabl 3y ago

The government keeps tabs on real estate deals and makes an estimate on the value of the unimproved land. Or for an extreme case, the government can buy some old property, demolish whatever building is left standing there, and the sell the lot to the highest bidder, giving a benchmark for land values in the area.

ameliaquining 3y ago

https://gameofrent.com/content/can-land-be-accurately-assessed https://gameofrent.com/content/can-land-be-accurately-assess... is a decent explanation of how this can be made to work.

afiori 3y ago

A method come from the sale of vacant lots (the land value is the sale price) or of buildings that are immediately demolished (the land value is the sale price minus demolition cost). Apparently even in dense cities a majority of land sales are like this.

MichaelZuo 3y ago
Even a vacant lot can be 'improved', e.g. a preexisting underground utility conduit has some non-zero impact on its value. Even a literal patch of dirt, with nothing going through it, is still 'improved' in value by distant structures, e.g. if a major highway passes by a half dozen miles away. And the 'improvement' is more than a comparable patch of dirt 20 miles away. So this part of Georgism never made sense to me.
- jabl 3y ago
  The entire point of the LVT is that the land value includes things that your neighbors (or society in general) does to make your lot more valuable.
  - MichaelZuo 3y ago
    Did you get confused with a different comment chain? In response to the parent comments, my comment indicates that it's impossible to determine the 'unimproved value', because there are no records of land values during the times of pre-human habitation of the north american continent. Hence why I said 'So this part of Georgism never made sense to me.' It's supposed to be based on literally impossible to obtain information.
    - afiori 3y ago
      Under this lens "unimproved value" might be a red herring, the concept is "the market value of the lot after a complete demolition of everithing on it" or equivalently "the market price of the exclusive priviledge of being able to build things on a piece of land".
      - MichaelZuo 3y ago
        Maybe you should take it up with the proponents of Georgism who use that term? And offer these reasons to switch. But just at a quick glance: "the market value of the lot after a complete demolition of everithing on it" doesn't make sense, because even a single disused subway tunnel could easily double the value of the land.
        afiori 3y ago
        There are things "on" the lot and things "around" the lot. An empty lot the right size to build a condo in front of a subway station is significantly more valuable than an otherwise identical lot 5km away from the closest subway station. A consequence is that what is built around you becomes the main factor in how many taxes you pay. Which is ok since what is build around you is also the main factor of how much value you can extract from the land you own. > Maybe you should take it up with the proponents of Georgism who use that term? the term is perfectly adeguate, for a given piece of land (like a lot you can build a condo on) you consider its value before any improvement ON it. The main conflict seems to be about either considering gigantic pieces of land or considering improvement that are not ON the piece of land but around it. For context[1]: > A land value tax (LVT) is a levy on the value of land without regard to buildings, personal property and other improvements upon it. [1] https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax