[neilparikh]

They are providing a service in the act of owning and maintaining the building.

What service are they providing in their role as a landowner? Land (in the sense of it being in a specific location) doesn't require any maintenance or risk. It's also not like they created the land.

The majority of rent in SF comes from the land value, so this is the more relevant part to consider.

[jedberg]

They are effectively providing credit to the renter, who can't afford to purchase the land.

[neilparikh]

But the only reason the land is expensive is because it can draw this indefinite rent stream!

If you couldn't draw a rent from just owning land, the purchase price would go to essentially zero.

[imtringued]

The reason why land is expensive is because there is high demand for it. Landlords can't set prices arbitrarily. Every tenant has voluntarily agreed to the rent they pay.

[perl4ever]

How is this relevant except for a hypothetical person who owned land since before there was a city? That person would indeed be profiting unjustly from value created by others, but that doesn't seem like real life. What am I missing?

[neilparikh]

https://www.latimes.com/politics/la-pol-ca-california-proper...

Another example I wrote in different comment:

> Let me give you concrete scenario of where the current system breaks down. Let's say I own an apartment building on the edge of town, and the city decides to build a new transit line to the community. Rents in my apartment building will go up; let's say by $100. Renters are willing to pay an extra $100 because they value living near a transit line more than the being far from one. But why should that extra $100 go to my pockets, while the government has trouble even paying for transit system? It's not like I was the one who built transit system, it was funded by the income taxes of the people who work there, and then built by the government.

This applies to all infrastructure spending of course.

[perl4ever]

As I said in another comment, this is why there are property taxes. I don't think it's any different than income taxes. You own real estate, the society around you is a multiplier, so you owe a percentage. You make a salary, the society around you is a multiplier, so you owe a percentage.

In practice the percentage could be off, but the basic way the system works makes sense to me and I don't get the people who are sure that it's terribly wrong (whether because they are against taxes or against owning property).

[neilparikh]

If property taxes are normal (not capped like in California), some of the effect is mitigated, but the property value increase is still greater than the tax increase. Real estate investing as an industry only exists because of the existence of property gaining value.

Most infrastructure spending requires income taxes and transfers from the federal government, so clearly there is wealth transfer happening to the landlords.

[jedberg]

The land is still a scarce resource. What do you propose, that the government own all land? Let the property owners just own the buildings?

We tried that before, it was called feudalism. It's where the King owned all the land and the peasants were allowed a small piece of land to work and enjoy the fruits of their labor.

That system didn't work very well.

[neilparikh]

I propose a land value tax/georgism:

https://en.wikipedia.org/wiki/Land_value_tax

https://en.wikipedia.org/wiki/Georgism

People own the land, they just pay a "user fee" of sorts to the commons.

Actually, the current situation is already like feudalism. Under feudalism, people other than the king also held land (the nobility). These landed gentry also drew the benefits of free rent, from the poor labourers.

Those with land currently can hold it indefinitely, extract a profit from it, and then pass it onto their children. That sounds a lot like the landed gentry under feudalism to me. The property tax tempers it slightly (which is why prop 13 is so bad), but it's easy to eliminate it all, while still keeping private landownership and market mechanisms for allocation (I definitely don't trust the government to own and allocate all land efficiently).

[maest]

You might be interested in learning more about the current Singaporean housing system.

https://www.youtube.com/watch?v=3dBaEo4QplQ

[jedberg]

I watched the video. It sounds like their system solved a lot of inequality problems.

But it sounds like it introduced a lot of problems too.