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> Property taxes, after all, punish development because they factor in the value of the house or whatever other structure happens to be built on top.6 Instead o

> Property taxes, after all, punish development because they factor in the value of the house or whatever other structure happens to be built on top.6 Instead of abolishing property taxes, shifting to land value taxation (LVT) would constitute an actual improvement. We need both. We need land value taxation to reflect that land is a limited resource, and incentivize building tall apartment buildings downtown instead of wasteful parking lots. On the other hand, we still need to tax houses and buildings because they correlate to usage of local government services. Whether it's the fire department where 20 apartments are 20x more likely to catch fire than a single tiny home, or the police where a large rich mansion is more likely to be targeted by theives than a tiny home, or schools where the larger a building is, the more likely it is to have more kids needing education (or more adults who once benefited from public schooling and are now paying it forwards). Taxes are for allocating originally public resources efficiently (whether radio spectrum or land), and for paying for mandatory government services which you're not allowed to opt out of.

sixo 1y ago
It seems like you could straightforwardly unbundle the property tax into a bunch of specific fees and insurances. We're comfortable requiring car insurance, why not fire and police? This would probably make it more palatable to MAGA, but also I think to most other people too. It would probably destabilize municipalities: I have to imagine that most properties are dramatically over- or under-priced at present; on net I'd guess overpriced wins. School districts are particularly tricky, though, for all the usual reasons.
- triceratops 1y ago
  > We're comfortable requiring car insurance, why not fire and police? For police, specifically because law and order is a core function of the state and to be provided to every resident regardless of ability to pay. If the state can't do that, it's called a failed state. For fire, because just like car insurance there will be people who will evade the requirements, endangering others' lives and property. And we don't want firefighters to decide whether or not to save lives or neighboring properties based on coverage.
  - kiba 1y ago
    I don't see why fire department has to prioritize properties based on insurance coverage. They should be covered by taxes. But it would be economically devastating to homeowners if they do not have fire coverage.
    - bb88 1y ago
      It's not prioritization so much as it is providing service. Did you pay the $75 fee for the fire department to protect your house? [0] [0] https://www.nbcnews.com/id/wbna39516346 https://www.nbcnews.com/id/wbna39516346
    - ndsipa_pomu 1y ago
      Also fairly devastating to homeowners if they're next to a building without fire coverage
  - sixo 1y ago
    We get around both of those by requiring buildings be insured, just like cars. That word was in my original post, but you missed it and gave the standard counter-arguments to a different (and bad) idea instead. This isn't meaningfully different from property taxes, many break out costs by service anyway, but I find it compelling to view these as insurances.
    - maxbond 1y ago
      That's a very regressive tax. Despite what was asserted earlier in the thread, the people who are victims of crime are usually lower class, not those living in mansions. Lower class people will get hit with a double whammy of being robbed and having higher insurance premiums as a result. Their neighbor's premiums will go up, as well. I would speculate this would lead to a feedback loop of neighborhoods pushed into poverty or out of their homes by higher premiums, creating incentives for crime, leading to even higher premiums.
      - sixo 1y ago
- deleted 1y ago
  [deleted]
- dmonitor 1y ago
  Insurance is just privatized taxation where the overhead goes to outlandishly rich middlemen
notherhack 1y ago
People correlate to usage of services, not buildings. An empty apartment building is no more likely to catch fire than an empty house. Taxing land and taxing people, via local sales and/or income taxes, makes more sense to me.
- xnx 1y ago
  > An empty apartment building is no more likely to catch fire than an empty house If an arsonist sets fire to an apartment building this is a bigger problem (bigger fire, harder to fight) than if they set fire to a house.
- crazygringo 1y ago
  > People correlate to usage of services, not buildings. An empty apartment building is no more likely to catch fire than an empty house. No, it's both. People correlate to things like schools. Buildings correlate to things like the fire department, precisely because -- as you put it -- an empty apartment building will catch fire too. And construction regulation, and the courts, and all sorts of stuff. There are a lot of government services that really are building-oriented as opposed to person-oriented. IMHO schooling ought to be funded entirely at the state/federal level, not the local level, just for greater economic equality and opportunity. But since it is funded at the local level, and people don't like high sales taxes (and taxing visitors buying stuff to pay for local schools is weird), and local income taxes often don't exist, it ends up being property taxes. Still, there are some states that do have local income taxes, which is generally a much better solution.
  - seanmcdirmid 1y ago
    Not every state funds education at the local level. Washington state and California being two exceptions I know about.
kiba 1y ago
Higher LVT will take care of this if you need more revenue. It is simply the most efficient way to raise tax revenue, one that encourage economic growth, If you need additional taxes, I recommend piguovian taxes on road congestion, pollution, and other bad stuff. This cut down on bad stuff within your environment and reduces incidences like fire. Cars catches on fire all the time. Code enforcement and insurance coverage also helps with cutting down on fire and such. Also, local government services encourages or protect economic growth. I don't like paying taxes based on usage, because public education benefits me whether I use it or not. I'll gladly pay for public education regardless.
- seanmcdirmid 1y ago
  A pure LVT would basically put all low income housing (as older housing) in high value areas out of business very quickly: those properties would have to be redeveloped for higher income purposes way sooner than they would have under a normal property tax scheme. You also have to plan projects not only for current land values, but for land values predicted 20-40 years into the future (and your building isn’t going to depreciate, although that doesn’t happen much in property tax systems either).
  - novok 1y ago
    Yes and no, it also encourages the development of dense housing, which ends up being cheaper housing within a few years vs causing old land inefficient housing to linger too long in a market and cause an affordability crisis. If the value of the land stays flat or goes down after inflation, this effect doesn't happen, it only happens when it goes up, because the economic market induces higher land demand for a region. "House value always go up" is a relatively recent invention. It's a tax system to create economic incentives for density.
    - seanmcdirmid 1y ago
      Older housing stock is supposed to be for affordable housing, but if property taxes increase too quickly, they just get replaced with more luxury apartments and condos that still push people out if they are less dense. Worse still, let's say you get to build a massive low income density project, if you make pay LVT...it might not survive. > "House value always go up" is a relatively recent invention. Everyone wanting to live in a few economically hot cities is also a recent invention. If you price the LVT in those cities appropriately, then only the most income generating projects are going to be viable, and that means the lower class is basically not going to be living in those cities anymore.
seanmcdirmid 1y ago
In Washington state they have a formula that factors in land value and improvements, moving the bar toward land value on the last few tax years. But ya, it’s hard to maintain schools if the needle doesn’t actually include capacity for students to service (the biggest expense paid for with property taxes here, note Washington pays for schools with statewide property taxes unlike most other states).
mathiaspoint 1y ago
Not everyone needs to live in your particular neighborhood. The US native population is shrinking so baring immigration (which we absolutely do not need more of) housing prices should fall without any development.
- disgruntledphd2 1y ago
  > The US native population is shrinking so baring immigration (which we absolutely do not need more of) housing prices should fall without any development. This will only be true in a world where nobody moves, which is not the world we live in. Like, if all jobs are in California and New York, one would expect house prices to rise there (while collapsing everywhere). Remote would have made this much less bad, but it turns out that's not going to happen to the extent people expected during Covid (mind you, lots of people did naive extrapolation during Covid which basically hasn't worked out anywhere).
pyrados 1y ago
This is an oversimplification. Density in fact makes public infrastructure more efficient and more predictable. As Mason Gaffney notes in his article, "Containment Policies for Urban Sprawl" "Consider water distribution. If demand doubles within a fixed service area by doubling density, we need simply expand all pipe diameters—and not by double, but by the square root of two, since cross-sections increase with the square of the radius. But if demand doubles by doubling the service area, at constant density, we must, (a) double our pipe mileage; (b) double the cross section of our old system at its base, and more than double it elsewhere, to transmit the extra load through to the new extension; (c) increase pressure at the system load center to maintain it at the fringes (especially if the new lands are higher); and (d) upgrade our pipe-joints to hold the extra pressure. Actually those four simplest considerations understate the case a good deal. We should add the factor of peaking. The fewer customers on a given line, the higher is the usual ratio of peak demand to mean daily demand because there is less pooling of offsetting demand patterns, and more lawn sprinkling. There is also a factor of planning expansion. "Containing urban sprawl" does not imply halting growth, but holding it inside compact increments, whose ultimate density is known in advance and will be reached quickly, saving utilities from the waste of under- or oversizing their lines in the face of uncertainty. Urban sprawl as known today not only reduces density but breeds extreme uncertainty of future density."

sixo 1y ago

It seems like you could straightforwardly unbundle the property tax into a bunch of specific fees and insurances. We're comfortable requiring car insurance, why not fire and police? This would probably make it more palatable to MAGA, but also I think to most other people too. It would probably destabilize municipalities: I have to imagine that most properties are dramatically over- or under-priced at present; on net I'd guess overpriced wins. School districts are particularly tricky, though, for all the usual reasons.

triceratops 1y ago
> We're comfortable requiring car insurance, why not fire and police? For police, specifically because law and order is a core function of the state and to be provided to every resident regardless of ability to pay. If the state can't do that, it's called a failed state. For fire, because just like car insurance there will be people who will evade the requirements, endangering others' lives and property. And we don't want firefighters to decide whether or not to save lives or neighboring properties based on coverage.
- kiba 1y ago
  I don't see why fire department has to prioritize properties based on insurance coverage. They should be covered by taxes. But it would be economically devastating to homeowners if they do not have fire coverage.
  - bb88 1y ago
    It's not prioritization so much as it is providing service. Did you pay the $75 fee for the fire department to protect your house? [0] [0] https://www.nbcnews.com/id/wbna39516346 https://www.nbcnews.com/id/wbna39516346
  - ndsipa_pomu 1y ago
    Also fairly devastating to homeowners if they're next to a building without fire coverage
- sixo 1y ago
  We get around both of those by requiring buildings be insured, just like cars. That word was in my original post, but you missed it and gave the standard counter-arguments to a different (and bad) idea instead. This isn't meaningfully different from property taxes, many break out costs by service anyway, but I find it compelling to view these as insurances.
  - maxbond 1y ago
    That's a very regressive tax. Despite what was asserted earlier in the thread, the people who are victims of crime are usually lower class, not those living in mansions. Lower class people will get hit with a double whammy of being robbed and having higher insurance premiums as a result. Their neighbor's premiums will go up, as well. I would speculate this would lead to a feedback loop of neighborhoods pushed into poverty or out of their homes by higher premiums, creating incentives for crime, leading to even higher premiums.
    - sixo 1y ago
deleted 1y ago
[deleted]
dmonitor 1y ago
Insurance is just privatized taxation where the overhead goes to outlandishly rich middlemen

notherhack 1y ago

People correlate to usage of services, not buildings. An empty apartment building is no more likely to catch fire than an empty house. Taxing land and taxing people, via local sales and/or income taxes, makes more sense to me.

xnx 1y ago
> An empty apartment building is no more likely to catch fire than an empty house If an arsonist sets fire to an apartment building this is a bigger problem (bigger fire, harder to fight) than if they set fire to a house.
crazygringo 1y ago
> People correlate to usage of services, not buildings. An empty apartment building is no more likely to catch fire than an empty house. No, it's both. People correlate to things like schools. Buildings correlate to things like the fire department, precisely because -- as you put it -- an empty apartment building will catch fire too. And construction regulation, and the courts, and all sorts of stuff. There are a lot of government services that really are building-oriented as opposed to person-oriented. IMHO schooling ought to be funded entirely at the state/federal level, not the local level, just for greater economic equality and opportunity. But since it is funded at the local level, and people don't like high sales taxes (and taxing visitors buying stuff to pay for local schools is weird), and local income taxes often don't exist, it ends up being property taxes. Still, there are some states that do have local income taxes, which is generally a much better solution.
- seanmcdirmid 1y ago
  Not every state funds education at the local level. Washington state and California being two exceptions I know about.

kiba 1y ago

Higher LVT will take care of this if you need more revenue. It is simply the most efficient way to raise tax revenue, one that encourage economic growth, If you need additional taxes, I recommend piguovian taxes on road congestion, pollution, and other bad stuff. This cut down on bad stuff within your environment and reduces incidences like fire. Cars catches on fire all the time. Code enforcement and insurance coverage also helps with cutting down on fire and such. Also, local government services encourages or protect economic growth. I don't like paying taxes based on usage, because public education benefits me whether I use it or not. I'll gladly pay for public education regardless.

seanmcdirmid 1y ago
A pure LVT would basically put all low income housing (as older housing) in high value areas out of business very quickly: those properties would have to be redeveloped for higher income purposes way sooner than they would have under a normal property tax scheme. You also have to plan projects not only for current land values, but for land values predicted 20-40 years into the future (and your building isn’t going to depreciate, although that doesn’t happen much in property tax systems either).
- novok 1y ago
  Yes and no, it also encourages the development of dense housing, which ends up being cheaper housing within a few years vs causing old land inefficient housing to linger too long in a market and cause an affordability crisis. If the value of the land stays flat or goes down after inflation, this effect doesn't happen, it only happens when it goes up, because the economic market induces higher land demand for a region. "House value always go up" is a relatively recent invention. It's a tax system to create economic incentives for density.
  - seanmcdirmid 1y ago
    Older housing stock is supposed to be for affordable housing, but if property taxes increase too quickly, they just get replaced with more luxury apartments and condos that still push people out if they are less dense. Worse still, let's say you get to build a massive low income density project, if you make pay LVT...it might not survive. > "House value always go up" is a relatively recent invention. Everyone wanting to live in a few economically hot cities is also a recent invention. If you price the LVT in those cities appropriately, then only the most income generating projects are going to be viable, and that means the lower class is basically not going to be living in those cities anymore.

seanmcdirmid 1y ago

In Washington state they have a formula that factors in land value and improvements, moving the bar toward land value on the last few tax years. But ya, it’s hard to maintain schools if the needle doesn’t actually include capacity for students to service (the biggest expense paid for with property taxes here, note Washington pays for schools with statewide property taxes unlike most other states).

mathiaspoint 1y ago

Not everyone needs to live in your particular neighborhood. The US native population is shrinking so baring immigration (which we absolutely do not need more of) housing prices should fall without any development.

disgruntledphd2 1y ago
> The US native population is shrinking so baring immigration (which we absolutely do not need more of) housing prices should fall without any development. This will only be true in a world where nobody moves, which is not the world we live in. Like, if all jobs are in California and New York, one would expect house prices to rise there (while collapsing everywhere). Remote would have made this much less bad, but it turns out that's not going to happen to the extent people expected during Covid (mind you, lots of people did naive extrapolation during Covid which basically hasn't worked out anywhere).

pyrados 1y ago

This is an oversimplification. Density in fact makes public infrastructure more efficient and more predictable. As Mason Gaffney notes in his article, "Containment Policies for Urban Sprawl" "Consider water distribution. If demand doubles within a fixed service area by doubling density, we need simply expand all pipe diameters—and not by double, but by the square root of two, since cross-sections increase with the square of the radius. But if demand doubles by doubling the service area, at constant density, we must, (a) double our pipe mileage; (b) double the cross section of our old system at its base, and more than double it elsewhere, to transmit the extra load through to the new extension; (c) increase pressure at the system load center to maintain it at the fringes (especially if the new lands are higher); and (d) upgrade our pipe-joints to hold the extra pressure. Actually those four simplest considerations understate the case a good deal. We should add the factor of peaking. The fewer customers on a given line, the higher is the usual ratio of peak demand to mean daily demand because there is less pooling of offsetting demand patterns, and more lawn sprinkling. There is also a factor of planning expansion. "Containing urban sprawl" does not imply halting growth, but holding it inside compact increments, whose ultimate density is known in advance and will be reached quickly, saving utilities from the waste of under- or oversizing their lines in the face of uncertainty. Urban sprawl as known today not only reduces density but breeds extreme uncertainty of future density."