3 ms·

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

by 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.
- kiba 1y ago
  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. It's not a recent invention that people wants to live in cities. It's the suburbanization and sprawling that's odd. The lower class already can't live in those cities anymore in the first place. You need to expand the supply of housing to make this possible, which means more efficient use of land which is what urbanists has been advocating for years to fix the housing crisis.
  - seanmcdirmid 1y ago
    It’s not just living in cities, it’s living in west coast fair weather cities with really good job markets. If people just want to live in a city, they can move to buffalo which has lost half of its population since it peaked 50+ years ago. If most efficient usage means most profitable usage, and LVT pushes to penalize any usage that isn’t as profitable as it could be, then the market will deliver exactly that and all other use cases are screwed.
    - kiba 1y ago
      Generally speaking this lead to increase in housing and other amenities in the most demand area, which is exactly what we want. This decreases market pressure on other housing elsewhere in the city. There's no reason not to satisfy the core's demand for infill development. This means increased tax revenue for the cities relative to infrastructure cost, thus more budgetary capacity to throw at problems.. Mandating affordable housing is an expensive proposition and developers will drag their feet unless subsidized. They don't build things out of the goodness of their heart after all. While subsidies are a useful tool, I am not sure if it's useful to allocate to affordable housing as opposed to incentivizing developers to take on more projects and urban renewal projects.
      - seanmcdirmid 1y ago
        I'm not arguing for subsidies or public housing. Just for a property tax that combines land value with property improvement using some reasonable formula that combines them. Increasing the share of property tax related to land value (it doesn't have to be zero percent) vs property improvement (it doesn't have to be zero percent either) can prevent shocks that avoid obliterating older housing stocks that traditionally serve as affordable housing, while still pushing for increasing density over time in popular cities (this will also act in the opposite way in cities like Buffalo that are less popular and land value tends to very cheap).
        kiba 1y ago
        The whole point of increasing housing supply is to fix the affordability housing. All you're really doing is having rich people chase poorer quality housing in urban core area. You're also discouraging adding housing stocks by discouraging new construction. This is a nonsensical approach advocating for a normal property tax.

by novok 1y ago

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.

kiba 1y ago
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. It's not a recent invention that people wants to live in cities. It's the suburbanization and sprawling that's odd. The lower class already can't live in those cities anymore in the first place. You need to expand the supply of housing to make this possible, which means more efficient use of land which is what urbanists has been advocating for years to fix the housing crisis.
- seanmcdirmid 1y ago
  It’s not just living in cities, it’s living in west coast fair weather cities with really good job markets. If people just want to live in a city, they can move to buffalo which has lost half of its population since it peaked 50+ years ago. If most efficient usage means most profitable usage, and LVT pushes to penalize any usage that isn’t as profitable as it could be, then the market will deliver exactly that and all other use cases are screwed.
  - kiba 1y ago
    Generally speaking this lead to increase in housing and other amenities in the most demand area, which is exactly what we want. This decreases market pressure on other housing elsewhere in the city. There's no reason not to satisfy the core's demand for infill development. This means increased tax revenue for the cities relative to infrastructure cost, thus more budgetary capacity to throw at problems.. Mandating affordable housing is an expensive proposition and developers will drag their feet unless subsidized. They don't build things out of the goodness of their heart after all. While subsidies are a useful tool, I am not sure if it's useful to allocate to affordable housing as opposed to incentivizing developers to take on more projects and urban renewal projects.
    - seanmcdirmid 1y ago
      I'm not arguing for subsidies or public housing. Just for a property tax that combines land value with property improvement using some reasonable formula that combines them. Increasing the share of property tax related to land value (it doesn't have to be zero percent) vs property improvement (it doesn't have to be zero percent either) can prevent shocks that avoid obliterating older housing stocks that traditionally serve as affordable housing, while still pushing for increasing density over time in popular cities (this will also act in the opposite way in cities like Buffalo that are less popular and land value tends to very cheap).
      - kiba 1y ago
        The whole point of increasing housing supply is to fix the affordability housing. All you're really doing is having rich people chase poorer quality housing in urban core area. You're also discouraging adding housing stocks by discouraging new construction. This is a nonsensical approach advocating for a normal property tax.