[dredmorbius]

The value changes from gentrification or owner flight (see' most mid-century US cities) come from the community rather than any significant owner-initiated changes to the propety itself.

You do nothing, rich people move in around you, value increases.

You do nothing, rich people move out around you, value decreases.

The direct utility of the property is unchanged. The owner has made, net, an insignificant contribution to the surrounding community. And yet value accrues (or diminishes) all the same.

Housing and real estate internalise the net community utility changes. The pathological cases are where the owners or investors are outside the community and strip-mine the resulting wealth.

Land value taxes both dampen wild valuation swings and internalise value gains to the community to provide infrastructure, institutions, and services.

[lopmotr]

Unfortunately, it's hard to find a way to allocate land without using the market. Yes it's unfair that rich people have to pay more to live where they want than poor people who are happy living near other poor people, but how else can you allocate land that gives the useful land to the people who'll get the most value from it? Central planning doesn't get it right, a lottery would mean people can't group themselves together so they would lose that important value (eg programmers in Silicon Valley).

Land value tax would take money from people who don't need those community services and give it to different people who happen to live nearby. That's not really fair. It's still a kind of rent seeking that also happens to give the rent to charity but not back to the original payers in proportion to what they paid. But it does sound more reasonable than the luck of the draw that property owners get.

[dredmorbius]

Long-term leases and LVT seem among the better solutions.

It's the assetification of an essential economic input that seems to be the root of the problem. Bernhard J. Stern commented on this in the 1930s in several works I've submitted (to no traction) in recent weeks.

https://doi.org/10.1177%2F000271623820000104

https://archive.org/details/technologicaltre1937unitrich/pag...