[RandomLensman]

Why would it be most desirable for society if the only thing done with land was to maximize profit? Society also values museums, parks, etc. - but those are not a profit maximization things.

You keep bringing up price, but price and use of the land are not the same. A price (if transacted on) also only really speaks towards the parties involved, not society as a whole.

The mess we have today is not because we don't maximize profits from landownership enough.

[rocqua]

The mess we have is because landowners can squeeze the users of the land for all of their profit. Really what should be maximized is the productivity (in a broad sense) of the land.

Profit is a pretty good stand in for productivity, especially if you can't trivially extract rent.

[RandomLensman]

If landowners already maximize profit, why would you expect any change if you tax landowners in a way that encourages profit maximization from land? Or do you mean things like more industry and less housing? Smaller, high density and expensive housing instead of larger housing?

[rocqua]

Landowners can now maximize profits by renting it out and speculating on land value increase. They are getting value for free, at the expense of the renters and people who can't find land. They are nothing but a drag on society if they take this approach.

Note that a landlord who builds and maintains a nice house isn't freeloading and not part of the problem.

The problem to solve here is vacant lots, land speculation, and, slumlords. Anyone who makes their money off their land from it just being there, rather than by working on improving or using the land. Put differently, anyone who makes their money purely by virtue of people who have no other way to access land.

[RandomLensman]

Being a slumlord might be higher profit that other things - why encourage it in such situations?

Also, having nothing vacant at any moment in time will be quite constraining overall. Not sure pushing towards that is useful.

[rocqua]

Being a slumlord could be the most profitable in the current world, but stop being profitable when an LVT were in force.

In the current world, slumlords make profit because their costs are negligible, and it's mostly profit. They could build nicer houses, but they don't deem it worth the effort. They make money either way.

Once an LVT is introduced, if they don't invest, they lose money. All of a sudden, investing in the place becomes worth it.

[RandomLensman]

Sorry, but I don't understand how that follows from an LTV. If the payout from being a slumlord is positive, making no investments might lead to higher IRR than investing, for example. Even if investments where the way to go for higher profit, it might not mean that investments go towards nicer houses.

I think the idea that an LTV can so finely steer investment seems unlikely to me (also, would need to take varying interest rates into account). Trying to steer investments by increasing certain costs has in the past led to a lot of unexpected behavior - I'd assume the same would happen here.