4 ms·

You just agreed with the parent. The carry cost has gone up, forcing action!

SoftTalker 3y ago
If the carry cost is too high, who would buy the land? The thing missing from the above scenarios is: Owner can't afford the tax, can't find renters, can't find a buyer, so just walks away. This is why so many properties are vacant now. The owners just walked away.
- tmnvix 3y ago
  ...the land value then drops. That drop is reflected in the cost of the LVT. A value is found that works for someone.
- caminante 3y ago
  You're skipping a few steps. Tax lien/default sale would reset the land value. > This is why so many properties are vacant now. In Detroit...? People don't walk away because they can't afford taxes. It's because any dollar spent is negative NPV!
- epistasis 3y ago
  Imagine a scenario where land purchase prices hover very close to $0. This is the end result of an effective LVT. It means that you only pay for the structures, or the cost to remove a blighted structure, etc. It makes real estate more liquid, and allows more people to try their hand at development without having a massive land bank worth millions of dollars. It decentralizes these decisions and lets more local players get involved. It rewards those who are productive, and encourages those who are squatting on resources to let somebody else give it a shot.
  - oneshtein 3y ago
    $0 is too high. With high enough taxes it easily can be -$1000 per acre or lower!
  - bagels 3y ago
    The land is nearly free now. You can't build things in Detroit and make a profit, construction costs outweigh sale price or possible rents.
    - mactrey 3y ago
      The point is, currently if you build things then you pay higher tax. The current tax structure disincentivizes building things. We don't know what people would build without that disincentive - maybe still nothing, as you are suggesting.
      - caminante 3y ago
        > The point is, currently if you build things then you pay higher tax. You're missing THE point. Your comment is too general. 1. You'll only pay higher taxes if your ratio of land/improvements is above a threshold (TBD). 2. The article says that the proposed change would lower taxes for 95+% of the population.

If the carry cost is too high, who would buy the land? The thing missing from the above scenarios is: Owner can't afford the tax, can't find renters, can't find a buyer, so just walks away. This is why so many properties are vacant now. The owners just walked away.

tmnvix 3y ago
...the land value then drops. That drop is reflected in the cost of the LVT. A value is found that works for someone.
caminante 3y ago
You're skipping a few steps. Tax lien/default sale would reset the land value. > This is why so many properties are vacant now. In Detroit...? People don't walk away because they can't afford taxes. It's because any dollar spent is negative NPV!
epistasis 3y ago
Imagine a scenario where land purchase prices hover very close to $0. This is the end result of an effective LVT. It means that you only pay for the structures, or the cost to remove a blighted structure, etc. It makes real estate more liquid, and allows more people to try their hand at development without having a massive land bank worth millions of dollars. It decentralizes these decisions and lets more local players get involved. It rewards those who are productive, and encourages those who are squatting on resources to let somebody else give it a shot.
- oneshtein 3y ago
  $0 is too high. With high enough taxes it easily can be -$1000 per acre or lower!
- bagels 3y ago
  The land is nearly free now. You can't build things in Detroit and make a profit, construction costs outweigh sale price or possible rents.
  - mactrey 3y ago
    The point is, currently if you build things then you pay higher tax. The current tax structure disincentivizes building things. We don't know what people would build without that disincentive - maybe still nothing, as you are suggesting.
    - caminante 3y ago
      > The point is, currently if you build things then you pay higher tax. You're missing THE point. Your comment is too general. 1. You'll only pay higher taxes if your ratio of land/improvements is above a threshold (TBD). 2. The article says that the proposed change would lower taxes for 95+% of the population.