[Jiro]

You also end up taxing actual value that can only be used by one person. If your house is close to your job or your parents, or if your children or if your children have gone to school the previous 5 years in the neighborhood and don't want to leave their friends, you'd be willing to pay more to keep it. Now, you actually have to pay more to keep it.

We shouldn't be taxing people on the fact that their house is near their job. And if they don't raise the price of their house, someone will eventually buy it at the market value of the house, and the value will simply have been destroyed.

[webstrand]

It also sounds like a great way to harass people. Don't like your new black neighbor? Just force him out by buying his house for the tax price. Ideally he'll have a little more money than he started with, but I could see other social institutions, like trouble obtaining another loan, preventing the re-homing of "undesirables".

[avar]

I think you and others in this thread are missing that the proposed mandatory bidding price is a multiple of the "real" value.

So yeah, don't like your new neighbors who just bought a $500k home next to you, you can give them $1.5m (or whatever) to get their house. How are they now worse off exactly?

That family can then probably buy the larger house next to yours for $1m, and have $500k in cash left over. A bank that was willing to give them a loan for a $500k house is less likely to do so when they've got an extra $1m in cash?

The system the authors proposed is mainly intended as a clean way to get rid of things like eminent domain and the holdout problem. Most real estate transactions would take place between "willing" sellers and buyers, just like they do now.

[Jiro]

>I think you and others in this thread are missing that the proposed mandatory bidding price is a multiple of the "real" value.

That doesn't work. People will set the "real" value to be lower than the real value, in order to reduce their taxes, but high enough that someone who wants to buy the house has to pay barely enough, after multiplying, to make it worthwhile to sell. The tax rates will then be raised accordingly and we'll just have "the mandatory bidding price is the real value" with extra steps.

[avar]

Right now we don't live in a world where such a bidding system exists, because it's a rather obscure (but interesting) idea. Even if people were widely aware of the details the political will to implement it probably doesn't exist.

But you seem to be arguing that if such a system were implemented the very structure of it would lead to a race to the bottom?

I don't see why that would be the case, if there's political reluctance to implement such a system to avoid certain outcomes, why wouldn't there be the same reluctance to raise the relevant taxes?

In any case, the book I cited upthread doesn't argue for some sort of "shock therapy" introduction of a system like this, but e.g. starting with commercial real estate.

Even people who'd argue that they should never have to sell their ancestral family home would probably find it hard to extent that argument to their neighbourhood Starbucks never having to accept a bid from a competing coffee company.

[tekknik]

You could’ve left the color of the skin of the neighbor out and still made your point. People of all skin colors face discrimination these days, not just blacks.

[webstrand]

I am curious why you called this out. Is there a social reason I should not use such specific examples in the future? In my mind, giving a concrete example that the reader has some familiarity with help them to develop the story in their mind.

For example, one could misinterpret the neighbor as having the same socio-economic status, making it far less clear how losing the house but gaining an equitable amount of money causes hardship. And blacks specifically have been targeted by such policies in the past, so it's a lot easier to imagine how other social policies align to make becoming un-housed even more problematic for that neighbor.

[avar]

You're just focusing on the downside without considering the upside.

Maybe you want to go see a movie you've been dying to see tomorrow, and you've got your $100 tickets in hand.

But there's someone else in the same situation, but they'd really like to see it. If a market exists they could offer you $1000, and you'd both be happier, as you can now afford something you'd prefer more than the $100 activity.

The same goes for real estate, it's just a less liquid market currently.