
The solution to the housing crisis is extremely simple - djrobstep
https://medium.com/@djrobstep/the-solution-to-the-housing-crisis-is-extremely-simple-bcb0511e761d
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Overtonwindow
This has to be satire. No one can be this narrow minded. It sounds like this
author wants the government to essentially own all of the land, and only those
who can afford to (the rich) to actually do anything with it. What's valuable
land? What is this tax actually for? I think this is satire and the author is
trying to make a point about socialism or something, no one can be these inept
at economics.

~~~
djrobstep
This is exactly the same system of ownership as now, and a type of tax that
already exists in many countries, but at a higher rate. I'm not sure why this
is so horrifying.

I'm also not sure what makes it so hard for people to see the obvious fact
that landlording is morally unjustifiable. Ideology is a hell of a drug I
guess.

~~~
Jtsummers
I don't want to maintain a home or a yard, presently. Renting out apartments
is perfectly moral and ethical when there are people like me around (that is,
I have a choice and have chosen to rent over own). The risk is more of the
"slum lord" sort, taking advantage of people without the choice due to
whatever circumstances. It's a _risk_ of immoral or unethical behavior, but
it's not guaranteed. My landlords (the company and their local staff) are
quick to do repairs, have reasonable rates for rent, and have done a good job
in maintaining the building (vermin free, which is a feat for an old
warehouse). They guarantee protection of the commons (the building's
infrastructure, safety, etc.) that would be nearly impossible to coordinate
amongst the 80 or so units (about 120-150 people).

~~~
djrobstep
Absolutely, renting is a lot more convenient in many ways. Most people only
buy for investment/financial stability reasons. Once you remove the land
speculation incentives, I think you'd find that more people would rent.

~~~
Jtsummers
You're confusing me, you wrote:

    
    
      I'm also not sure what makes it so hard for people to see the
      obvious fact that landlording is morally unjustifiable.
    

Is it absolutely unjustifiable, or is it the risk of moral/ethical failure
(slum lords and similar extortive behavior) that makes it riskier than you
think is reasonable?

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aqsheehy
I feel like I'm failing an IQ test here. I assumed he meant 100% tax on rent,
but then there's this line:

>Owners of valuable land would be forced to make maximum use of land with
higher density rentals in order to make sufficient rental income to pay the
land tax.

What would the 100% be on exactly?

~~~
djrobstep
100% of the rental income generated from land value (as opposed to
buildings/improvements).

Formula: total rental income * (value of land / value of land and buildings)

~~~
aqsheehy
Why would anyone buy property under this regime?

~~~
TheCoelacanth
For exactly the same reasons that they do now other than speculating on its
value increasing in the future. And of course, the prices for property would
be much, much lower under this regime.

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anovikov
That is a communist bullshit.

To begin with, is there a housing crisis in America? In my books, there is
more housing per capita in U.S. than in every other country of the world save
for Australia, and it is also more modern that almost everywhere else except a
few countries that built out from nothing in the recent years like China (but
per capita housing stock is much much lower there, and that housing is Soviet-
style apartment blocks).

~~~
jacknews
The crisis is that many people can't afford the housing that exists.

Much of the profit from the economy gets ploughed into land values, so land
prices increase due to growth of the wider economy. So, much like owning
company stock, you do nothing yet still profit from other people's effort,
except with land, there's much less risk.

100% land tax was proposed by Henry George, and I'm surprised the article
doesn't mention him. The idea is simply that land, natural resources etc,
belong to all of us.

Consider a newborn child in a world where all the land is owned by other
people. They are essentially born a slave, having to work a substantial amount
simply to pay rent to someone who does nothing but own land. This proposal
effectively acknowledges that we are all entitled to a share of the earth.

Of course any proposal that advocates "tax" or "government" is going to touch
certain sensibilities, but rather than imagining an evil government sucking
wealth from plucky individuals, consider it instead a big shared pool of cash,
and every individual has a say in how (and how much) is collected and spent -
which is what government ideally is.

~~~
anovikov
Why everyone needs to be able to afford the housing? Down here in Europe we
have about 30% homeownership rate and nobody says we are in a crisis, in fact,
we are doing very well. U.S. is again near top of the world in homeownership
rate.

You are making things up - trying to see a problem where there isn't. Better
think about fixing childcare, and healthcare - that's where the real crisis
is.

~~~
jacknews
Yes they could just live on the street.

By "afford housing" I don't mean just buying, but also renting. Rent prices
reflect sale prices.

~~~
anovikov
Well, this again sounds like communism. No one is entitled to real estate. For
that matter, there is a great amount of essentially free real estate in every
country, a lot of it in good repair - just in the places where there are no
jobs. That isn't even a thing - what's limited is a supply of real estate in
places where everyone wants to be.

No fiscal solution could fix San Francisco housing prices, only 'fix' would be
crushing Silicon Valley so it ceases to be attractive place to be.

If renting is a problem you are doing something wrong. Median gross rent in
U.S. is $959 a month. That doesn't sound much for developed country to me.
Buying real estate is accessible to majority of U.S. households, in fact
almost every dual income household. 63.7% have it, and many who don't have it,
just don't want it (for example, i am making what it takes to buy an apartment
i am living in, in 8-9 months, but i am not buying because i am not a
gambler). To me not buying real estate seems a rational choice, unless you
have a very 'fixed' career - like, certain that you are going to stay in a
place for decades. There are fewer and fewer people like that, labor market
gets a lot more fluid.

~~~
jacknews
"No one is entitled to real estate."

Why not? We are born onto the earth, and yet under the current system it is
already owned by someone else, and we have to slave to those owners just to
"earn" a place to be. IMHO We are each entitled to a share of nature as a
birthright, and a way to achieve that while still allowing "ownership" or
exclusive access to land is to apply a 100% tax. Should one be able to own the
air? Or the world's water? It's not far different to land ownership.

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AndrewKemendo
This is just a weak form of Georgism [1], which is a very old concept and has
been both praised and panned since introduced in the late 19th century. Mostly
it remains popular in Left-Libertarian circles.

[1]
[https://en.wikipedia.org/wiki/Georgism](https://en.wikipedia.org/wiki/Georgism)

[2] [http://www.economist.com/blogs/freeexchange/2015/04/land-
val...](http://www.economist.com/blogs/freeexchange/2015/04/land-value-tax)

------
gragas
>Income from land is thus completely unearned and thus any income gained from
land ownership should be completely taxed at 100%.

That pretty much sums up the article. This is a horrible idea and will never
happen.

~~~
tps5
It's not a horrible idea. It's an old idea that's been popular with various
economists including (gasp) Adam Smith:
[https://en.wikipedia.org/wiki/Land_value_tax](https://en.wikipedia.org/wiki/Land_value_tax)

(I don't know enough about this subject to have a strong opinion either way,
but I feel pretty confident saying that this isn't a terrible idea)

~~~
true_religion
Isn't saying that it isn't terrible an opinion of itself? Also pointing out
that hsitorically people thought certain something isn't enough on its own to
show that it is the least bit reasonable in the modern era.

~~~
tps5
Some pretty highly regarded economists in the past century have backed up the
idea of a land value tax. Does that alone make it a great idea? No, but I
think it makes the parent comment seem pretty silly.

I certainly have an opinion, but (like I said) it's not a strong one. I don't
understand all the moving pieces and all the incentives involved here, but I'd
be interested in seeing some more knowledgeable people talk about the LVT.

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pavel_lishin
I may not be understanding his proposal fully, so please bear with me. If I'm
making a complete jackass of myself through misunderstanding, let me know.

> _It’s worth noting that more tax on land doesn’t mean higher housing costs!
> For those living in enormous houses in very expensive neighbourhoods, it
> certainly will: but that’s by design. But shifting the tax burden onto rich
> folks like this, means that the average person pays less._

I'm confused - what exactly is going to stop the company that owns the 50-unit
apartment building that I live in from passing that tax directly onto me and
the other tenants via rent?

And how does this help my parents, who own land and have completely paid off
their house? Should they, age 60 and 80, start working the land to produce a
profit to offset the tax? Should I come back and start having more kids to
work the farm?

~~~
djrobstep
> what exactly is going to stop the company that owns the 50-unit apartment
> building that I live in from passing that tax directly onto me and the other
> tenants via rent?

Competition. Your landlords are already charging as much as they can get away
with.

> And how does this help my parents, who own land and have completely paid off
> their house?

The enormous pool of money raised could help fund public healthcare and social
security programs that they would benefit from.

> Should they, age 60 and 80, start working the land to produce a profit to
> offset the tax? Should I come back and start having more kids to work the
> farm?

If they own a farm but don't want to do anything with the land, they should
probably downsize to a smaller property, yes?

~~~
fiter
Competition will not resolve the issue of taxes being passed on, because all
properties will have an increased tax burden.

The smallest tax/rent increase will go to those using the land relatively
optimally (to be decided by tax surveyors).

~~~
djrobstep
Tenants are already "taxed" this amount. It just goes to the landholder,
rather than the government.

~~~
fiter
I think your statement requires some justification. After a property has
changed hands, the speculative value has gone away with the seller (who was a
landholder but is no longer). The new landholder paid for the cash flow at
market rates and so any significant additional cost (tax) would result in a
loss. The new landholder will have to increase rents to make up the loss. This
will be played out across the market.

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dnautics
> Rural land and average suburban land would be taxed at low rates because
> that land is comparatively cheap.

How would we know what the value of that land is? Does some assessor come
around and place an "expert opinion" sticker price on that land?

~~~
mabbo
Is that not done in America?

The city of Toronto taxes my condo based on a fraction of it's assessed value.
They don't even enter the building up decide what that value is, but they have
a database of every homes estimated value.

~~~
randomdata
Assessments made by estimating the value based on actual sales data from
similar properties. But the value of those real sales are made based on the
expected profitability of the land.

It may be easier to see in rural areas. As a farmer, the price of farmland in
the current climate seems to move to where the net profit on the productive
use of that land is expected to be ~2-3% of the land's current value. So, as a
rule of thumb, if you can expect to make $20-30,000 per year off 100 acres,
then that 100 acres will sell for ~$1M.

If the tax on profits is 100%, the expected income will always be zero. Thus,
the land is worth nothing. It doesn't really matter if it is in the heart of a
city, or out in the middle of nowhere.

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lawrencewu
I don't think this is a good solution. Where is the incentive for anyone to
maintain properties anymore?

"Owners of valuable land would be forced to make maximum use of land with
higher density rentals in order to make sufficient rental income to pay the
land tax."

I don't see how this follows if all income is taxed at 100%.

The correct solution is to eliminate NIMBYism by eliminating the ability for
homeowners to restrict the construction of new buildings so that new housing
can be built. Rent control should also be eliminated, allowing demand to match
supply.

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stagbeetle
You don't need to tear this post a new asshole, it disproves itself.

> _No profit from land ownership means no price bubbles, because there’s no
> incentive (in fact, a powerful financial disincentive) to idly hold onto
> land._

There is no incentive to hold land at all. Business transactions are motivated
by monetary gain. If there is none, business will seldom occur.

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earljwagner
I can't tell whether this is satire, like "A Modest Proposal".

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mabbo
Let's start by all agreeing that the proposal to tax land at 100% (of what?)
is a bit nutty and not going to happen. Possibly this is satire. Poe's Law.

But toned down, would an increased, progressive tax on land ownership have
positive benefits? More tax income, yes. And the author isn't wrong in that
such a change would serve to level land values (and therefore rents, probably)
out a bit.

There would sure be some upheaval bringing it in ("my mom can't afford to live
in her family home anymore after 40 years!"). But it's an interesting
proposal.

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boznz
Every single law or solution you can make up for this problem (and many other
similar ones) has one big flaw. That is the people who make the rules will
ensure their properties are excluded, and every single lawyer and accountant
will then follow these same rules for their clients to ensure they are also
excluded.

This is currently the way the world works. Get over it!

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Geee
I think housing crisis (what/where is that anyway?) could be solved if there
was a way to own space vertically. So that someone could build over or under
existing buildings.

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ouid
just get rid of the tax incentives.

