Tax the land- to solve America’s housing crisis "America’s housing crisis is about the nation’s perennial failure to build enough homes. As of last year, Freddie Mac estimated that the country needs an additional 3.8 million homes to meet demand" https://www.vox.com/policy-and-politics/22951092/land-tax-housing-crisis My response: There can be progressive taxation built in, based on the property annual rental value, on overall land owners, so for leaseholds of 99yrs or less, the leasehold property owners pay 66% of property tax portion with landowners topping up to 100% to pay to government tax collectors. So it's like first USD5000 in taxable value is zero rated, next USD5000 tier at 1%, next USD5000 at 2% until it hits a max of say 80% when the property value is at the highest, i.e. approx $400,000 annual rental value and above. So roughly, the residential property tax of a piece of land, upon which equivalent residents upon which could be built up, costing estimate $50k p.a. to rent will be approx $2500 p.a., worth $100k annual rental attracts a tax of approx $10k property tax, worth $400K annual rental will have to pay $160K in property tax, worth $2M annual value (annually to rent) will pay property tax of $160k + $1.6M*80%=$1.44M in annual property tax. Other forms of land will be taxed at different rates based on permitted use zone classifications, e.g. commercial, farm, mining, industrial etc etc with a possible discount if the land is vacant, subject to the shortage in supply of houses society needs, so as to optimise the use of land and prevent hording or freeloading by hoarders of land. Ref: https://www.vox.com/policy-and-politics/22951092/land-tax-housing-crisis
For starters, property tax valuations are under a per $100 valuation. In most states that have property taxes, there are homestead, agricultural, and variuos disability exemptions for the land and/or buildings on said property. Furthermore, property assessments does not mean fair market value of property, expecially if you have owned the property for several years or longer. Second, housing prices are determined by "market demand" and fair rental values is what is skyrocketing more than home values because of the lack of demand and high construction costs. This method will not realistically solve the housing crisis in any way. And it is just another ideological, simplistic answer to a problem that varies in degree from state to state.
Everyone should keep in mind that Bic Cherry lives in Singapore, which has a little bit of a different situation there than other places. By the way, it's very interesting, we just had another thread where someone was trying to use Singapore as an example of a high standard of living country that allows lots of immigration. Well guess what? Looks like that policy has led to a housing crisis in Singapore. I'm not sure taxing people's houses is an answer to pay for housing for other people is an answer to the affordability crisis. I mean, when housing is already unaffordable and people struggle to be able to afford a house, taking money from them sounds like we are just moving around the problem from one place to another. You want to know why there is a housing crisis? Because of overcrowding in certain areas. It's supply and demand. Too many people will result in shortages of available space and drive the prices up.
And isn't it interesting. If you do the research, America actually has a slightly negative population replacement rate. The average American woman is having slightly less than 2 children. Why is America's population numbers still increasing? It's because of immigration, from other parts of the world.
1) What makes you think land isn't taxed already? 2) Taxation does not build a single house and it doesn't create more land. 3) Your scheme worsens the problem of affordable housing by making all housing more expensive. 4) Uncle Sam is causing this housing crisis with low interest rates. Play with any amortization program. You can afford to pay 45% more for a property at 2% APR for the same payment you would make at 5% on a 30 year mortgage. This has the effect of creating so much demand that housing prices have gone through the roof and worsened the availability situation.
Yes, exactly this. That was kind of the problem with ObamaCare ("The Affordable Care Act") which sought to make healthcare "more affordable" by what amounted to putting a tax on some people's healthcare to pay for the healthcare of others. Had the same fundamental issue.
I take it you never been to Singapore, have you? It does have a high standard. It is also a very cosmopoliitian area where Muslims, Christians, Buddhists live without much incident. It is a first world country, with strong UK roots in its judicial system. But it is expensive to live there. However, I do agree that what works in Singapore will not work here in the United States, or vice versa.
Many of the workers there have to sleep in literal cages because wages are low and the housing costs are so expensive. It is a "First World" country, but the average standard of living there is definitely lower than in America. And that's only because the Asian workers there work so hard. An American, with a typical American work ethic and attitudes, probably would have difficultly surviving there, if they had to go there with no savings. https://www.ricemedia.co/culture-people-jalan-kukoh-poorest-neighbourhoods-singapore/
That's a patently false statement. To which nation is Vox referring? The Seminole Nation? The Miami Nation? The Chickasaw Nation? The Sioux Nation? The Choctaw Nation? Because those are nations. The US is not and never will be. The so-called housing "crisis" was created by the federal government, specifically two unconstitutional cabinet positions, namely the Departments of Housing & Urban Development and Transportation. Early in the 1960s, for the first time in US history, a simple majority of the population lived in urban areas. Over the next 60 years the short-sighted policies of HUD and DOT coerced a shift to 81% in urban areas and 19% in rural areas. That's because HUD has continually and wastefully dumped $100s of Billions into literally a handful of the 39,000 municipalities in the US, specifically, New York, Boston, Philadelphia, Washington DC, Baltimore, Miami, Detroit, Chicago, St Louis, Milwaukee, Kansas City, Dallas, San Diego, Los Angeles and San Fransisco. The smaller cities, especially those with less than 500,000 people got nothing but chump change. At the same time, DOT stupidly wasted $100s of Billions building interstates to link those handful of cities. Without infrastructure, there can be no jobs. People in rural areas fled to the handful of big cities getting all the love from HUD and DOT in search of jobs. And, now it's even worse, because in the last 30 years, populations in rural areas have been declining at rates of 10%-20% every 10 years. Corn is infinite. Land is not. There's only so much land. That brings us to another lie Vox told. There are 120,000+ housing markets in the US. The so-called "crisis" that was manufactured by HUD and DOT exists in literally a handful of those 120,000+ housing markets, and all in the same big-ass cities HUD and DOT created with their lavish, frivolous and wasteful spending. Fixing this so-called housing "crisis" is simple. Either get rid of HUD and DOT (both of which are unconstitutional) or have HUD and DOT toss chump change at the handful of big-ass cities and spread the rest around to the other 39,000 municipalities. That will create the infrastructure necessary to support and sustain development, and that will provide good-paying jobs and then people don't have to flee to the already over-crowded big-ass cities. And then people could afford homes, like this one: Oh, wait, you wouldn't want that. It's way too small 4bed 2bath 1,583 sq ft 8,102 sq ft lot Besides, it's way too expensive at $145,000.
It didn't help that lumber prices spiked so that new homes are too expensive all while regulations, environmental, insulation, and energy efficiency, only ever get worse. https://www.nasdaq.com/market-activity/commodities/lbs Denying the idea that the USA is a nation does not alter the fact that housing costs are rising everywhere.
I am not sure I understand the reason behind the 99year. Also,wht not just exempt primary residence from all taxes and have it all be paid by business including property used as a rental? Also, if secondary house not used as a rental, double property taxes.
Why are you falsely and disingenuously claiming that a house is land? Why are you falsely and disingenuously claiming that a tax on vacant land takes money from people who are struggling to be able to afford a house? I already know. You, by contrast, do not. Garbage. A free market would simply supply more housing in such areas. Right: the exorbitant subsidy to idle landowning increases the demand for land -- and thus its cost -- without increasing the supply of housing. Housing prices have almost nothing to do with available space. They are determined by the subsidy to landowners.
The current tax on land is such a small fraction of the subsidy to the landowner that holding land idle is too profitable. But it can make it unprofitable to deny others permission to build a house. Seems you "forgot" about that part. We don't have to create more land. We just have to make sure land can't be kept idle profitably. Taxing it is a good way to do that. Wrong. Taxing land makes housing cheaper by reducing the land acquisition cost. It's true that low interest rates have created a bubble. But higher property -- and especially land -- tax rates can deflate it.
You are correct, but I'm not trying to get into the Henry George argument here. For all practical purposes, taxing the land underneath someone's house is still going to have the same effect I was describing as taxing the value of the entire property. I am sure you can see that. Please don't take this discussion off topic, unless you can point out a way that what you said mitigates what I was trying to say.
Why would you choose to evade the most relevant and important facts? No, it most certainly is not. Taxing the land increases the supply of housing and reduces its cost. Taxing the housing built on the land reduces its supply and increases its cost. I am sure you can see that. What I said conclusively disproves what you were trying to say.
