Tax the land
One radical idea to solve America’s housing crisis.
https://www.vox.com/policy-and-politics/22951092/land-tax-housing-crisis
I’ve always felt that land zoned for residential without anyone living on it should be heavily taxed, and residential land should be exponentially taxed depending on the size of it.
I see all this empty land in the middle of large cities doing nothing because someone bought a few acres 20 years ago and they are just sitting on it waiting for the price to go up and up and up when someone else could be building housing on it.
If there was a good way to get states/counties/cities to communicate, I thought going to exponential taxation rates on properties would be useful.
First property has an exponent of 1. Second 2. Third 3. Etc.
Although, I’m not sure what that would do to something like my family’s farm. It’s somewhere around 200 acres, but not contiguous. There’s like 50 acres here, 40 acres there, 2 acres over there. It’s also one of the smaller farms in the area.
Perfect way to get yourself removed from your own house if the neighborhood becomes more expensive for any reason
That’s why you use the revenue derived to fund a UBI. Then, there would be a safety net, which could potentially be used to partially cover one’s land value tax obligations. As land becomes more valuable it is important that people use it more productively. Land value tax encourages building denser and reduces urban sprawl.
Many people rent housing. The key advantage of a land value tax is that landlords are unable to pass it on to tenants. They have to take the hit.
It doesn’t seem clear to me at all why landlords wouldn’t be able to pass the value on to tenants.
Can Land Value Tax Be Passed On To Tenants?
https://gameofrent.com/content/can-lvt-be-passed-on-to-tenants
The claim in this article seems to me to be flawed. The core claim seems to be that the landlord cannot pass on the costs to the tenant because the market is at capacity. But what this really means is, the tax WILL be passed through to the tenants until maximum exploitation of the tenants (as a resource) has been reached. Which would include the UBI safety net as well, since the system demands (intentionally) maximum exploitation of this limited resource, no?
At this point, the landlord can continue to reduce their OWN share of the profits, sure. But the LVT will continue to increase over time, so eventually the landlord is priced out of the area, the building closes, and all tenants are evicted. MAYBE this particular landlord has enough capital to re-invest into the land that it may again become profitable with additional investment, but EVENTUALLY this will not be the case, and the property must be sold. This centralizes all land assets over time into the control of whichever conglomerate has enough resources to maximally develop the area.
And what of the tenants? Rent prices are deemed to have been at their maximum for the region. Tenants in this case are displaced, at least for the amount of time that redevelopment will take. And, because the value of a particular parcel of land seems likely to be similar to a neighboring one of identical size, this increase is likely to affect ALL housing providers in a particular area with similar circumstances, since we have to assume that development doesn’t happen in massively disproportionate jumps.
Sounds like a means to encourage people to fight gentrification.
Land gets outsized representation (esp. in the US) so an idea would be that taxes should be levied proportionally.