[bombcar]

The theory goes that as those new rural communities develop the land value will begin to increase - which will in turn encourage densification to keep up.

We see this historically in frontier towns that had absolutely no limits on sprawl (as land on the outskirts was available to anyone willing to stead it) but still had city centers develop and usually to the construction limits of the time.

[skybrian]

"Encourage densification" is kind of bloodless, abstract language.

How does this mechanism work in concrete terms? My understanding is that Georgism advocates raising taxes on people with property in desirable locations. They decide they can't afford the taxes, so they sell to a developer, who tears down the house and builds a bigger building.

Another name for this process is "gentrification."

The difference is that with the way gentrification works currently, the developer pays the previous property owner lots of money, which isn't so bad. With Georgism, the previous property owner doesn't get anything, because the property tax is so high that the land isn't worth anything. It's similar to being a tenant in a rapidly gentrifying area where rents go up but there's no upside for you.

I guess if you're pro-density and don't own property, that might seem appealing, but this mechanism seems likely to be very unappealing to home owners.

[geocon]

Gentrification is a boogeyman- all gentrification means is that land has become more desirable to live on (that's why its value increases). That's good. We want to improve quality of life. If you follow the logic of gentrification to its end, we should be destroying improvements in vulnerable locations in order to keep them affordable. It is the rationality of the slumlord.

[imtringued]

People think gentrification is "evil" but they don't seem to think why people leave their old communities to begin with. By stopping gentrification you are unknowingly abandoning far more people by forcing them to stay in a bad area.

Gentrification is primarily a problem with the current system. I can easily imagine an economic system that decentralizes economic activity akin to Distributism which will make it easier to rebuild and improve run down communities without having to move somewhere else.

[imtringued]

>How does this mechanism work in concrete terms? My understanding is that Georgism advocates raising taxes on people with property in desirable locations. They decide they can't afford the taxes, so they sell to a developer, who tears down the house and builds a bigger building.

You have a 500m^2 plot of land. This plot pays $50k land value taxes. If one person lives on the land that person pays the full tax. If 10 people live on the property they each pay $5k taxes per year. If 50 live there then the tax is $1k.

Property taxes scale with the building so housing more people means higher taxes. That is being avoided by only taxing the land.

Alternatively, people hate taxes, they want to avoid paying taxes. If you want to avoid land value taxes, the only way to do that is to use less land more efficiently.