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A LVT (land value tax) would be more appropriate. You want people to use land more effectively and encourage high density housing. Landlords / developers shou
by kqr2 3y ago
A LVT (land value tax) would be more appropriate. You want people to use land more effectively and encourage high density housing. Landlords / developers shouldn't be punished for providing more housing in the same footprint.
A LVT would automatically discourage owning multiple properties unless they are all net flow positive with respect to the LVT, which would decrease vacancy.
LVT can also be adjusted to prevent rent seeking.
https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax
- throwaway914 3y agoI had not heard of this strategy. Thanks for submitting it here :-) As a sidenote my father always said Prop 13 was never to protect seniors, but to help corporations buy massive plots they'd never have to pay adjusted taxes on in the future. Prop 13 locked in rates for more than just residents. I don't see an end to this without a phased elimination of prop 13, or an abrupt "now it's gone".
- sroussey 3y agoHomelessness will boom even more (increasing land values and taxes while on a fixed income), and small businesses will close (old buildings have low prop tax, and with most buildings triple net, the landlords don’t pay the tax).
- throwaway914 3y agoWe really signed our death sentence 20+ years ago. Californians won't have the attention span or the conviction to undo it with a phased or abrupt approach. We'll just have this unequal footing... forever
- kjkjadksj 3y agoYup, there are so many parking lots on absolute prime land in socal. Land that would turnover and rent out an entire 5 story apartment on top of it overnight, based on what neighboring plots have done. I guess having that low tax rate and renting the lot out to film shoots for their basecamp is less headache and more lucrative.
- Xelbair 3y agothe issue with LVT is in a market where there aren't enough sales to properly value the price of land itself. It does seem to be a pretty good solution if you don't have stagnant market.
- sokoloff 3y agoWhere do you ever have an active market of raw land?
- ethanbond 3y agoYou don’t need raw land transactions. When you buy a house today it is already assessed separately from the land on which it sits.
- sokoloff 3y agoAnd that assessment is based on an opinion (in other words, on air) rather than a market signal.
- dionidium 3y agoNot only that, it's not even an attempt to reflect the market value in most jurisdictions.
- ethanbond 3y agoI've not heard of this: why is that? What else is it an attempt to reflect?
- sokoloff 3y agoHere's a pretty randomly chosen one from a state that I know does the practice GP describes: https://www.zillow.com/homedetails/3304-Gillenwater-Dr-Knoxville-TN-37917/41624321_zpid/ https://www.zillow.com/homedetails/3304-Gillenwater-Dr-Knoxv... Sold in 2021 for $190K. Tax assessment in 2020 was $111K; in 2021 was $28K; in 2022 was $50K. The assessed value has no obvious tight relationship to the market value.