Comment by kiba
3 days ago
Incorrect. Parks and other amenities raise land value. They would be an investment by the city to raise land value in a given area. People do not want to live in soulless concrete jungle. They want to live in a society full of amenities such as theater, parks, train station, basketball courts, etc.
Also, "luxury" housing cause what economists called "filtering", in which new construction are occupied by the upper strata of income, which means they pay for the cost. As housing age, this naturally becomes more affordable to the lower strata. This of course, depend on sufficient housing stock. Otherwise the inverse will happen.
Also, you only need to cover the cost of paying the land value tax to keep it, not to generate the maximum amount of revenue for that plot of land.
We are not talking about value extraction here, but making sure that landowners work for their keep, while the unearned income/economic rent that would otherwise goes to them is returned to society, because the value of the land is largely determined by the agglomeration effect, the sum total of the community's effort and entrepreneurial spirit. Otherwise, your private effort as individuals would flow to landowners reaping the benefit of increased land value, hence appreciation in real estate price.
I am responding to the comment I quoted, namely: "parking lots, and self storage facilities would be penalized because they wouldn't generate enough income to cover taxes on land".
So if a LVT has the explicit goal of eliminating things like parking lots and self storage units because those don't generate enough income to pay for the taxes, then what hope do things like playgrounds and parks have to continue existing.. they generate far less income than a self storage facility.
Parks and playgrounds increase the land value of the surrounding community. That results in higher LVT.
That creates a virtuous cycle for the local government who is administering those taxpayer paid amenities, same as other form of infrastructure and amenities.
And they just answered: they generate huge amounts of income for the entity that actually pays for playgrounds and parks (the city).
That feels like wishfull thinking. What I see around me in practice is government doing all they can to sell off public lots (like parks) to developers to tear down the park and build another luxury condo. More tax revenue, more money in the government pocket, some bribes under the table, another loss of quality of life in the neighborhood.
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