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> The city doesn't know how to police this. How would you build a law or tax around regulating this behavior? New York may attempt a pied-a-terre tax, but no on
by eqdw 12y ago
> The city doesn't know how to police this. How would you build a law or tax around regulating this behavior? New York may attempt a pied-a-terre tax, but no one really knows how to deal with this issue of vacant housing units held as investments. Technologically, it's easy to track who is doing what where at all times. But legally, there are a lot of issues around privacy with policing this if foreign buyers are taking up 1/3 of the new housing stock as investments.
As someone who seems to know way more about this than I do: what about a land value tax? I've heard a few urbanists talk about a land value tax as an incentive not to withhold properties from the market. The reasoning is that with a property tax, if you leave property undeveloped, it will have a low property value and your tax rates will be low. But with a land value tax, the value (and consequently the tax rate) is a function of the value of that location, which in turn is a function of density, nearby amenities, demand, transit connectivity, etc. With a land value tax, someone keeping a property off the market in SF would be paying increasingly large amounts of tax on it, as the value of the land goes up along with the development nearby.
Do you have thoughts on this?
- ktothemc 12y agoIt would have to be a statewide ballot proposition, and you'd be up against the entire real estate industry, which has large parts of the California State Legislature in its hands. They would spend enormous amounts of money to mis-market it in poor political advertising. Perversely, two-thirds of the financial benefits of Prop. 13 and its tax freeze went to commercial interests even though it was sold as a way to keep homeowners in their homes. One only-third of its foregone revenues benefit homeowners. A lot of California policymakers have wanted to change this for years, since it really screwed with public school and city finances for decades.
- muzz 12y ago> These are people who may not intend to actually live in the Bay Area, yet they buy up homes without even seeing them. A higher property tax with a "homestead exemption", i.e. for those who live in the property they own, would serve to counter-act absentee owners. As you sort of allude to, the tax structure and Prop 13 incentive is to buy and hold, regardless of occupancy.
- ktothemc 12y agoRight, but how do you prove that? That is the dilemma all these prospective piece of legislation in Vancouver, NYC are running up against? What would you do? How would you enforce it? Water bills? Electricity? Which you could fake. Phone presence? A rebate program, which no one would vote for anyway.
- gojomo 12y agoOccasional random door-to-door checks? (Miss too many, and you lose your local-resident exemption.)
- ktothemc 12y agoI'm sure voters would vote for that. Any additional property tax in any city in the state of California has to go before a vote of the affected property owners per Prop. 218, passed in 1996. God bless our direct democracy system. http://en.wikipedia.org/wiki/California_Proposition_218_(1996) http://en.wikipedia.org/wiki/California_Proposition_218_(199...
- ende 12y agoA land value tax isn't a property tax, so no problem there.
- gojomo 12y agoIf it lowers voters' taxes, but increases costs on faraway non-residents/non-voters... isn't that exactly what voters like? Also, the Legislative Analyst's Office says Prop 218/1996 doesn't affect property taxes, but rather other kinds of property fees. See http://www.lao.ca.gov/1996/120196_prop_218/understanding_prop218_1296.html http://www.lao.ca.gov/1996/120196_prop_218/understanding_pro... – especially figure 2. Clearly, fixes are going to have to unwind previous statewide and local law... which means convincing people of the causes and solutions, over time. It took decades to enact the bad policies; it'll take many election cycles to chip away at them as well.
- 12y ago