The idea that you can tax an input more and reduce prices is ridiculous on its face.
> Demand for housing would remain the same.
Also unlikely. Basically any change in local conditions will impact housing demand one way or another. The global number of people needing housing may not change, but that’s not housing demand (globally or locally).
> Short term it would create a strong incentive not to hoard property. If it's not rented out it is losing money.
Property tax already does that, and most places have properry taxes. Also, the fact that property has non-tax maintenance costs does that. “Hoarding real property” is largely a theoretical concern.
> Landlords would scramble to rent them out - driving up supply.
Except they already do that, but higher taxes would raise the break-even price.
> Medium term rents would decrease, too. A land tax would create a powerful incentive to yield low density housing in high value locations to be redeveloped into high density housing - increasing supply.
No, it wouldn’t: housing demand already does it, the constraint is regulatory (zoning control) not the desire to build. Higher taxes on lans drive up costs without dealing with the constraint. Deal with the constraint and you’ll see development because more housing on the same land is more money for the landlord even with 0 taxes. All more taxes do is raise the break-even rent.
> What would also go down is property prices.
Nominally, but the cost of ownership would stay the same or be higher, some of it moving from purchase price to taxes.
> It would kill all political will to fight redevelopment too.
No, the political will to kill redevelopment would just also be political will to kill the taxes.
> There would be no point fighting to declare a launderette historic to prevent it from being turned into apartments.
There’s no financial case for that now, and higher land taxes wouldn’t erase nonfinancial political motives.
>The idea that you can tax an input more and reduce prices is ridiculous on its face.
Of course. It would absolutely reduce the price of property.
Just not rents.
>Basically any change in local conditions will impact housing demand
Hand waving.
>Property tax already does that, and most places have properry taxes.
When high enough property taxes do inhibit hoarding, yeah. They approximate a less desirable form of land value tax.
In my city property taxes are capped at an absurdly low level and property is hoarded like bitcoin while people die on the street. Tax policy at work.
>Except they already do that, but higher taxes would raise the break-even price.
Remember when you said?
"The idea that you can tax an input more and reduce prices is ridiculous on its face."
You were absolutely correct. PROPERTY prices would decline to compensate for the higher taxes.
That would in turn keep the breakeven price more or less the same for developers.
It would also reduce the capital intensity of property development since the cost of the land wouldn't be front loaded.
Dont get me wrong. This would turn property owners into renters of a kind (renting land from society) and this would make a lot of property owners furious - and probably violent. It's not a panacea - it's just a way to euthanize one kind of economic parasite.
The idea that you can tax an input more and reduce prices is ridiculous on its face.
> Demand for housing would remain the same.
Also unlikely. Basically any change in local conditions will impact housing demand one way or another. The global number of people needing housing may not change, but that’s not housing demand (globally or locally).
> Short term it would create a strong incentive not to hoard property. If it's not rented out it is losing money.
Property tax already does that, and most places have properry taxes. Also, the fact that property has non-tax maintenance costs does that. “Hoarding real property” is largely a theoretical concern.
> Landlords would scramble to rent them out - driving up supply.
Except they already do that, but higher taxes would raise the break-even price.
> Medium term rents would decrease, too. A land tax would create a powerful incentive to yield low density housing in high value locations to be redeveloped into high density housing - increasing supply.
No, it wouldn’t: housing demand already does it, the constraint is regulatory (zoning control) not the desire to build. Higher taxes on lans drive up costs without dealing with the constraint. Deal with the constraint and you’ll see development because more housing on the same land is more money for the landlord even with 0 taxes. All more taxes do is raise the break-even rent.
> What would also go down is property prices.
Nominally, but the cost of ownership would stay the same or be higher, some of it moving from purchase price to taxes.
> It would kill all political will to fight redevelopment too.
No, the political will to kill redevelopment would just also be political will to kill the taxes.
> There would be no point fighting to declare a launderette historic to prevent it from being turned into apartments.
There’s no financial case for that now, and higher land taxes wouldn’t erase nonfinancial political motives.