[onlyrealcuzzo]

The inhabitants don't lose.

Play your scenario out.

A bunch of poor people buy 100 acres of land for $1, and they turn it into a paradise.

It becomes cool, so rich hipsters wanna buy up chunks to Instagram it.

The first person sells a patch of land he bought for $0.01 for $1M. Suddenly, property tax on everyone's $0.01 parcels shoots up from $0 to $12,000 per year.

These people have no jobs, so they can't afford $12,000 in taxes per year, so they're all forced to sell their properties to other hipsters on Instagram for $1M, too.

Well guess what?

Now they're millionaires.

I mean, technically, not. They've got some taxes to pay. But you get the idea.

No owners "lose" from property values shooting through the roof. ESPECIALLY not leveraged owners (mortgage holders).

[rufus_foreman]

The value you put on living around your family and friends in this scenario is zero.

That's not how normal people value those things.

[derac]

People hate to hear this but noone has a right to live somewhere indefinitely.

Logically, this doesn't even work. Lets say everyone in LA wants to live there with their children and their children's children and so on forever. Extrapolate this a few generations and eventually you will have a solid mass of humans 1000 ft tall. (This is a hyperbolic joke, you get the point)

[mjmahone17]

Yeah I don’t see what’s wrong with your (in my mind) utopic vision. Everyone who wants to live in a mass of humanity 1000 ft tall should be able to afford to live in that mass, and we should be researching ways to make it more and more affordable.

The only way it doesn’t work is if the community makes it impossible for more new people to get in, or if there isn’t enough economic opportunity to support all the people living there. But people don’t generally want to move into communities where they can’t find work, and I see no good reason we should enforce minimum lot and zoning laws to prevent people from moving to where opportunity lives.

[derac]

I do think they should get rid of prop 13, demolish all single family homes, and replace them with high-density buildings. What many people mean however, is that they want to continue to live there in the same single-family house forever. This is why prop 13 exists in the first place.

[robocat]

> demolish all single family homes

Ahhhh, brutalism . . . “The Soviets decided to pass: the plan was too extreme and destructive of existing institutions even for Stalin. Undeterred, Le Corbusier changed the word “Moscow” on the diagram to “Paris”, then presented it to the French government (who also passed). Some aspects of his design eventually ended up as Chandigarh, India.”

https://slatestarcodex.com/2017/03/16/book-review-seeing-lik...

[dredmorbius]

Or Paris, or Madrid, or much of the rest of Europe in which 3--5 storey townhouses are common. These might be single- or multip-occupant dwellings (e.g., a single family or household on multiple floors). Typically zoning is denser, though structures might be either attached or detached.

In either case, the land-usage intensity rises by multiple factors.

The option is not between 1-story quarter-acre development and a forest of Burj Khalifas. There is in fact considerable intermediate ground.

[jelliclesfarm]

High density housing will not work in places with a high standard and quality of living. It will certainly erode individual rights, create environmental decline and infringe upon privacy.

In developed countries, high density housing will either make the city unbearably expensive(NYC) or bring down quality of life.(SF)

High density is a sign that resources are scarce but demand for them has increased. The sign of a well functioning and professional state is one that has a healthy middle class and enjoys low density sustainable standard of life.

Often the case for high density housing is married to sustainability goals. But sustainability goals exist in the first place because resources are scarce and it is becoming difficult to live in a sustainable manner.

The rational solution is to place a moratorium upon expansion of the city and the population. Only in Bizarro World would the logic of cramming more people even more densely in the name of sustainable design would make sense.

The true scarcity mentality is with governing bodies and elected officials who do not have the vision, integrity or collective access to more than one brain cell. They fail to create networked sustainable communities and manipulate their vote banks.

One might choose to be fair and honest to admit that calls for high density housing is often where successful immigrants congregate due to their employment. Often said immigrants are on work visas and often are not eligible to vote in local/national elections.

Is it a coincidence that elected officials impose high taxes only in certain cities/counties and extract every dollar they can squeeze from a work force who are cuffed to their visa sponsored high paying jobs? The golden goose is slaughtered and well done. Stick a fork in it and let the taxes drip.

There are no high density initiatives in Visalia, CA. Only in Bay Area. Because why build infrastructure and public transport when you can keep taxing those who can’t even vote in the first place. At least in CA, it’s win-win over and over.

Every city that has a highly paid immigrant work force is on the chopping block and will start passing high density housing initiatives. Success must be penalized..it seems. Affordable housing is subsidized housing. And who subsidizes it? The developers will tack that cost to the market value homes. Which would..surprise!..create more unaffordable cities. It’s a vicious cycle that should obvious to most who pay mortgages for all of their working lives.

[tda]

Have you even been to Europe? There is a sweetspot between 500ft highrise and infinite swaths of SFH suburbia. That sweet spot is usualy also classified as "high density", and IMHO is better in every way.

[ahtihn]

> In developed countries, high density housing will either make the city unbearably expensive(NYC)

I think you're reversing cause and effect.

[ClumsyPilot]

Westerners totally fail to appreciae,that once you replace all houses with, say, 6 story apartment of equivalent internal area, you gain so much space outdoors.

The single story suburbia looks claustraphobic - instead you have soace for parks, public squares, and services and facilities. There can be large distances between apartment blocks, and can be very green

[antman]

   People hate to hear this but noone has a right to live somewhere indefinitely

I am sure you feel it made sense when you wrote it, or the example explained it in any way. I absolutely failed to understand the common knowledge aspect about people's limits to their ownership rights or even understand the sequence of events or mathematical explanation of the example.

[derac]

Over time, the number of people that can lay claim to their right to live in LA forever will/could grow exponentially. The space is limited. Particularly so when you have prop 13. These two facts are incompatible. What you will get in reality is an ever-ballooning housing price, pushing everyone else out and single-family home owners locking in their "right" to the space through market-distorting laws like prop 13.

I ask you this, why do the people living in LA have more of a right to be there than the native Indians that were there 500 years ago?

[antman]

How is the potential problem of housing future people an argument for a policy that allows kicking out existing owners? They don't seem to me related. This is about the rights of ownership.

The problems you mention stem from various "kick out" policies that are essentially forced assets transfer and artificial scarcity policies to inflate prices (difficulty for new housing, one family houses, height of buildings, devaluation of residential areas by bad policing etc)

Housing prices are results of specific policies, and people's ownership rights are protected in western societies.

[dredmorbius]

A variant on the concept is that taxes accrue whilst the present (residential) owner holds the property, but come due on sale or transfer, inclusive of inheritance.

Same would not hold for commercial or nonresidential property ownership. Presumably not by trust (e.g., shielded / non-person) ownership.

[onlyrealcuzzo]

If their family lives nearby, they probably own homes and can all sell and move together, move in with each other, move to an area not far away that's substantially cheaper, use your huge winning to build an ADU in your dear family member's backyard and be even closer together, etc...

You. Don't. Lose. By. Winning. $1M.

You get options.

[salawat]

It's all relative. If everyone else moving in can spend a mill plus, you're priced out. If you and your neighbors happen to be the only ones improving things, and the mil plus group comes in and stagnates/displaces you through gentrificative forces, requiring you to to start from scratch elsewhere.

Lets say you live long enough for the cycle to repeat multiple times. I assume proponents would say, "well, hooray, everyone but you is way better off, I guess it sucks that you weren't better at managing money", when all anyone ever wanted to do was live together and be left alone.

[int_19h]

> all anyone ever wanted to do was live together and be left alone

It's a great ideal, but the problem is that land is a finite resource, so eventually you'll run out of space that is necessary for the next group of people who want to live together and be left alone to actually do so. At which point, you either have a stark divide between those who got in their claim and those who don't, or you come up with some redistributive system that gives newcomers a chance.

[mjmahone17]

The other thing people who own land can do: take out a mortgage to build more homes on their land, live in one and either sell the subdivided land/co-op/condo units or rent them to others.

The only people who can be “driven out” are the renters, but if you let owners subdivide and build more, even they should be able to stay in the neighborhood indefinitely. It’s only once you break the chain by not building new homes that the existing community is forced to move. The original neighbors may become a minority compared to the newcomers, but the alternatives to building enough housing for everyone who wants to live in a neighborhood appears to me to be:

- make your neighborhood undesirable for even you to live in.

- make it impossible for new people to buy their way into the community.

- accept that non-owners and not-rich-enough owners will be priced out and forced to move from their homes.

[skybrian]

This is a scenario where there are no zoning rules preventing the denser housing from being built.

It might be easier to fix zoning first?

(Property that's zoned to allow more development is more valuable, but property owners are often against lifting zoning restrictions anyway.)

[int_19h]

It's usually implied in most Georgist proposals.

[mekkkkkk]

Wouldn't mortgaging and bootstrapping profitable land use become incredibly hard in a world where 100% of land value was taxed?

[zozbot234]

On the contrary, it would be easier because you'd only need to take a mortgage on the improvement value, the land itself would be very cheap. Sure, you'd have to pay ground rent to the government but that would simply offset other taxes you would've owed regardless.

[TimPC]

This is wrong under a 100% land value tax. The value of land is a perpetual income stream an if the government takes all of this value the price of land falls to $0 regardless of all the amenities that improve it. Each amenity that improves it raises the tax which captures all the additional value from that external improvement which keeps the price at $0. Only improvements on the land itself will add to the price.

Owners don't lose from property shooting through the roof under current taxation schemes but under a 100% LVT they lose their community and gain next to nothing financially because land value is entirely captured.

[ItsMonkk]

Yes, this is true.

But as tax money is raised, the local government has a choice

1. They can use the tax money to fund services.

2. They can return the tax money collected as a Citizen's Dividend.

If they don't have any need for any more services, everyone would still be able to live there. Your concern that people will lose their community are unfounded. They might decide, as the tax goes up, that they don't need a 1 mile by 1 mile plot of land, in which case they can sub-divide it and live in the area they care about. Anyone who uses less than the average amount of land ends up net positive through this process. Since land ownership tends to be skewed by wealthy land-owners, this means the majority of people receive net proceeds.

But maybe the city does want to spend these new funds on roads and infrastructure for the new people. They have correctly identified that land values will raise by more than they spend, so it is in the interests of the community for them to build. Since these services are profitable to the community, the collected dividends will now be even higher. This represents even more gains for our original garden tenders, but everyone who joined after the initial process shares in these gains.

Now that they have built more awesome stuff, the original citizens are now much better off. This city is now filled with companies moving in, providing jobs for the citizens, it's a magical process. Land values are all much higher. This means that the tax is higher, but it means that the dividend is higher. They can now either go for #1 or #2 again...

In a non-LVT world, it wouldn't make sense for the infrastructure to be built for the sole profit of the original land owners, so it wouldn't be built. Everyone is better off with the land value tax.

[TimPC]

Georgists generally believe that everyone has an equal right to all land and all natural resources. This makes the correct scale for a CD global if possible and national if not possible. The CD is a poor tool for keeping up with the cost of living when it's not highly localized. But localizing it is a form of neo-feudalism where people have wildly different entitlements based on where they are born.

[ItsMonkk]

I'm pretty sure you can have both if the tax bubbles up. You pay the local tax. That tax money then goes and pays the city tax. The city tax pays the state tax, the state tax pays the country tax, the country tax pays the global tax.

You are responsible for the improvements on your land, and you pay for the unimproved value of that land that comes from all higher levels. The local government on the other hand is responsible for local infrastructure, and pay for the city+ based unimproved value.

A landlocked country would pay less tax, a city at the mouth of a river pays higher tax, a locality with a beach pays higher tax, etc... this ensures that each level has some accountability and is incentivized to improve.

At each level is money left over after paying the tax(I hope!), and can either be invested or can be returned as a dividend.

One of the main unresolved issues with Georgism is the Disney World problem, and I believe that if you structure the tax in this way that problem goes away. Disney would simply be labeled not as a household actor, but as a city level actor.

[TimPC]

Paying CDs at multiple levels of government means that not everyone has an equal share of all land and resources. If I live in a poor part of the US I am entitled to far less in land and resources from my CDs. Many Georgists view this as neofeudal.

[robocat]

> Suddenly, property tax on everyone's $0.01 parcels shoots up from $0 to $12,000 per year

In New Zealand, property taxes are relative: the tax you pay depends on how much your property price rises relative to everybody else’s property prices. The local government has a fixed budget, which is apportioned between all the properties proportional to property values.

Example: a city has a budget of $1000. The city has two houses, one worth $100k and another worth $900k. The property taxes are $100 and $900 (ignoring fixed charges). If the houses double in value to $200k and $1800k, the property taxes are still $100 and $900.

It is important to keep this in mind when arguing about property price increases, because price increases don’t always matter.

[earleybird]

I believe that's the typical scenario.

taxes = mill-rate * property-value

If you're paying more in taxes it's either because the taxing authority decided to raise more money or your property has increased relative to your neighbours.

It all comes down to the mill rate.

[DubiousPusher]

Not most places in the U.S.

If your whole neighborhood's valuations go up you all get taxed more.

[sokoloff]

If your whole neighborhood goes up, but not the whole city/municipality, correct. If the entire tax base goes up (not just one neighborhood), you should expect the mill rate to fall.

[onlyrealcuzzo]

Does it actually, though?

In practice - aren't tax rates changed based on politics?

[TimPC]

Tax rates are generally changed by an independent political process (the municipal budget) which often has the power to increase/decrease the mill rate based on how much money is needed/desired. This doesn't change the fact that the mill rate does generally fall by a lot when properties are reassessed in areas that have seen a large property price increase.

[DubiousPusher]

This is not the case where I live. Levy rates are set in statute.

[robocat]

Are rates proportional to house valuations used in “most places in the U.S”?

That is, are most rates not “mill rates” (where relative house values matter, not absolute values).

[Brian-Puccio]

> The inhabitants don't lose. > > Play your scenario out. > > A bunch of poor people buy 100 acres of land for $1, and they turn it into a paradise.

Yeah but instead it’s people who cannot buy land who rent their homes who make their community better only to be priced out.

> No owners “lose”

Right and for all the people who aren’t wealthy enough to own land who get priced out of their neighborhoods and have to move? Often further from places of employment?

The comment you replied to said “let's say there's a neighborhood of people who are quite poor but charitable toward one another”. Poor people buying 100 acres of land for $1 is not a “neighborhood of people”.

Your scenario is buying cheap land in hopes one day it’s expensive — basically a long shot lottery ticket.

[onlyrealcuzzo]

> Your scenario is buying cheap land in hopes one day it’s expensive — basically a long shot lottery ticket.

Or literally all of Los Angeles 30+ years ago. Or basically everywhere desirable today 30+ years ago.

[jjav]

> Well guess what?

> Now they're millionaires.

The difficulty with this reasoning is that it assumes that homes (and the land they sit on) have only economic value and nothing else matters.

> No owners "lose" from property values shooting through the roof.

In the story you just described they lost their homes they had built up and loved.

For many people, a bunch of cash doesn't replace that.

[josephcsible]

They didn't lose their houses. They sold them. When ownership of your house goes to someone else, you lost it if your bank balance stayed the same, but you sold it if your bank balance went up by the value of the house.

[jjav]

> They didn't lose their houses. They sold them.

They lost their homes which is not just a house. There's a much more emotional aspect to a home that can't be expressed in merely dollars.

They were also forced to sell in the story, it wasn't a choice.

[onlyrealcuzzo]

> They lost their homes which is not just a house.

You want me to feel sorry for someone who gets a Million dollar windfall when:

1) they got a million dollar windfall

2) they now have a ridiculous amount of options (because money = options)

3) if they're really determined to stay in their house, they can cash-out refinance continuously and use some of the unrealized gains to pay property taxes (and past cash-outs)

4) they could also build an ADU on their property and rent out the ADU to cover property tax + have extra money

5) If they actually do move and leave, it's because they preferred $1M do the other options

No, sorry.

This is like feeling sorry for people who win the lottery because they have to pay taxes and then everyone calls them for a favor.

Most things in life aren't ALL good.

[jjav]

> 1) they got a million dollar windfall

You're looking at it stricly as if housing was a investment to be cashed out, as opposed to a place to settle down and live life.

There is no windfall. They got kicked out of their home by being forced to sell it.

Is the $1M a lot? Well, they are now homeless. If the property values rose so much that they got the million, all other properties rose as well and being now homeless they still need to buy a new home. It'll have to be much smaller or maybe there's nothing affordable available anymore so they have to uproot life (jobs, schools, friends, family, doctors) and move to a much cheaper city.

Very cruel, and all because some richer people want to move in and take over? That's the kind of abuse that leads to things like Prop13.

> #3 cash-out refinance continuously

This is completely unrealistic. You can't pay a recurring cost by going farther into debt every year if you can never pay it back.

[salawat]

They got a million dollar windfall in a market now shifting to where the average buyer is in a position to drop a million plus without blinking.

You can be poor, even with a million in such a market, and all that happens if you move somewhere cheaper to start again, is you perpetuate the cycle.

[anon84873628]

That's exactly the cycle of population growth. Either we build more housing to accommodate everyone, or poor people get kicked out by the rich.

The question is whether the Georgist solution is more equitable than what we have today. But no system can magically solve the problem of supply and demand.

[mekkkkkk]

Both things can be true at the same time, though. They lost their house because they were forced to sell it.

[notahacker]

In reality, I think the scenario plays out a bit more like this:

A bunch of poor people buy some cheap land with very low taxes because its a run down scruffy mess with no facilities.

The land stays a run down scruffy mess with no facilities because the local property owners have strong financial incentives to keep it that way

Incremental increases in the land value tax would make low income landowners hungry long before the land rose in value enough to make anyone millionaires, and land isn't exactly easy to sell quickly, especially not if it's marginally-less-shitty-than-before land with an uncertain future.

[onlyrealcuzzo]

In reality, it works like Los Angeles and The Bay - and everyone who (owned) and gets priced out ends up with a massive windfall at some point.

How massive depends on how long they stay into the boom.

Again, no one ever loses (financially) from prices going up.

All you get are options (financially).

If your home is direly important to you, and being close to family is important, too - you still have options.

1) Sell and move in with family and use your gains to help offset their property tax

2) build an ADU in your backyard / convert your garage to an apartment - and use the rental income to pay your fair share of property tax - plus have the majority left over for spending

3) continuously cash-out refinance to pay your property tax + your previous cash-out

No owner loses (financially) from property prices exploding.

[notahacker]

Los Angeles and the Bay Area provides massive windfalls to property owners because the State of California's tax system is not based on the Georgist principle that 100% of the "unearned increment" of land value appreciation should be taxed away.

And in the case of the Georgist system being discussed, a typical poor person who is living on a typically tight budget and typically doesn't own very much of their home equity has very strong financial incentives to avoid unaffordable tax rises. Sure, they still have "options" to pay that bill, just like unemployed people also have "options" to sell and move in with family, take on lodgers or refinance, but if the consequence of house price rises from are that you have to choose between sharing, moving or paying refinancing costs on your house it's definitely not a windfall. And they're not finally priced out of an area when it's a million pound plot attractive to developers who want to build condos, they're priced out of their still-very-undesirable area as soon as the LVT bumps up 20%, perhaps because some well meaning citizen planted flowers instead of syringes in the local park.

The other option, of course, is to try to keep your house in line with your cost of living by attempting to thwart all attempts to generally improve the area. I think it's pretty obvious a lot of people will choose that...

[plasticchris]

Assuming there are ample buyers, and no predators waiting in the wings for distressed sellers who cannot afford the taxes.

[bombcar]

Just because one shot you in value doesn’t mean anyone else will ever want or bother to buy anything there again.

But it can be worked around.