LVT would push up the supply of rental properties by ensuring that property owners who don't rent out their properties or who don't make efficient use of land lose money.
Thats an incentive to rent out the property or sell up to somebody who will.
It would apply harsh market discipline on landlords - a demographic that has usually been rather coddled.
> LVT would push up the supply of rental properties by ensuring that property owners who don't rent out their properties or who don't make efficient use of land lose money.
That doesn't follow. If LVT reduces the net return on rentals, it will disincentivize construction and maintenance of housing in the first place. If it creates a net negative or zero return on property ownership, it may lead to abandoned/undeveloped property instead of housing development, or more property being used for other purposes than housing.
It's also worth pointing out that the existing ad valorem tax system used for property taxes is functionally equivalent to LVT, and does have these influences on the housing market. LVT proposals are distinguished by their being rooted in (fundamentally flawed) Georgist theory, not by being unique as a form of taxation in practice.
A property loses ~30% of its value when rented out and maintenance cost and insurance cost goes up significantly. Plenty of landlords rather have their property be empty and just collect on the equity gains over the years without putting in any effort.
> property owners who don't rent out their properties
The existence of property tax (which on a single house in some areas of the state is upwards of $15,000 a year already) already makes it absolutely ruinous to just sit on an extra house you don't need and not rent it out.
> or who don't make efficient use of land
A little more convincing. Though I suspect most empty land in places where anyone would be willing to live in California, is empty because our insane zoning laws don't allow what would otherwise make sense there (I don't care that it's like what most areas have -- it's insane to have laws that would make it illegal to build a place like San Francisco, Brooklyn, or Boston).
The funny thing about those zoning laws though is that they're held up by a rare case of bipartisanship:
- The MAGA Boomer set who doesn't want any more development near them because "it'll bring traffic" or noise or crime
- And most of the "progressives" who don't want any more development anywhere because "we hate greedy developers" and "Not enough of this proposed development is low-income housing for the government to dole out in lotteries to a few lucky families."
Idk, I’ve seen plenty of houses get torn down and replaced by a $2M house and just sit vacant years until they sell.
15k/2M is 75 basis points. Its definitely profitable to just sit on land especially if you turned it into a parking lot or some other barely improved thing.
LVT would push up the supply of rental properties by ensuring that property owners who don't rent out their properties or who don't make efficient use of land lose money.
Thats an incentive to rent out the property or sell up to somebody who will.
It would apply harsh market discipline on landlords - a demographic that has usually been rather coddled.
> LVT would push up the supply of rental properties by ensuring that property owners who don't rent out their properties or who don't make efficient use of land lose money.
That doesn't follow. If LVT reduces the net return on rentals, it will disincentivize construction and maintenance of housing in the first place. If it creates a net negative or zero return on property ownership, it may lead to abandoned/undeveloped property instead of housing development, or more property being used for other purposes than housing.
It's also worth pointing out that the existing ad valorem tax system used for property taxes is functionally equivalent to LVT, and does have these influences on the housing market. LVT proposals are distinguished by their being rooted in (fundamentally flawed) Georgist theory, not by being unique as a form of taxation in practice.
A property loses ~30% of its value when rented out and maintenance cost and insurance cost goes up significantly. Plenty of landlords rather have their property be empty and just collect on the equity gains over the years without putting in any effort.
> property owners who don't rent out their properties
The existence of property tax (which on a single house in some areas of the state is upwards of $15,000 a year already) already makes it absolutely ruinous to just sit on an extra house you don't need and not rent it out.
> or who don't make efficient use of land
A little more convincing. Though I suspect most empty land in places where anyone would be willing to live in California, is empty because our insane zoning laws don't allow what would otherwise make sense there (I don't care that it's like what most areas have -- it's insane to have laws that would make it illegal to build a place like San Francisco, Brooklyn, or Boston).
The funny thing about those zoning laws though is that they're held up by a rare case of bipartisanship:
- The MAGA Boomer set who doesn't want any more development near them because "it'll bring traffic" or noise or crime
- And most of the "progressives" who don't want any more development anywhere because "we hate greedy developers" and "Not enough of this proposed development is low-income housing for the government to dole out in lotteries to a few lucky families."
Idk, I’ve seen plenty of houses get torn down and replaced by a $2M house and just sit vacant years until they sell.
15k/2M is 75 basis points. Its definitely profitable to just sit on land especially if you turned it into a parking lot or some other barely improved thing.
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If mortgage expenses go down and property tax expenses go up, it's basically a wash.
But for that to happen, land values need to go down. Landlords need to bid less.
Of housing, but not of land.