patrick.net

Troy says

bob2356 says

Why should SFH exists for owners at all.

Because having a spot of ground to call your own on this planet is a basic human righ

So renters who will have to live in MFH because only owners will have SFH don't have basic human rights or are they subhuman until they actually buy a SFH? You keep dancing around the question.

bob2356 says

So renters who will have to live in MFH because only owners will have SFH don’t have basic human rights or are they subhuman until they actually buy a SFH?

? the basic human right is security in tenancy, LH or FS, SFH or MFH. These are not in conflict with each other, they are just different flavors of tenancy and condominium that combine in a 2 x 2 matrix of options.

People choosing to economize their use of land can choose a condominium (it's funny how nobody really groks what that word really means in the latin) arrangement with higher density than is possible with SFH. In a LVT regime this would obviously have a significant cost-of-living benefit due to the minimization of land usage -- if the current garden apartments I'm in now were converted each unit would have about $80,000 of land value, compared to the typical 3500' lot here with a LVT footprint 4X greater.

Those choosing a MFH tenancy do not give up any human rights, any more than those choosing to take the subway in Tokyo instead of getting financially raped driving a car there do.

You asked why FS SFH is necessary in my utopia. SFH is a relative luxury, given the additional land it removes from the commons, but I wouldn't want to live in a world where luxuries were not allowed. I also think any LVT should be very sensitive about not booting people off their landholding just because they can't afford the LVT.

Part of my emphasis on quality MFH supply is to totally kill the scarcity rents that most communities suffer wrt land value. I gave you the example of Sweden and its rather large public sector MFH. I don't know how good it is but I'd hope it's a perfectly viable alternative to SFH tenancy.

Once we reduce the scarcity rent pressure on SFH lots, it should be possible to also protect the median SFH FS tenant and below from LVT pressures. People should have reasonable security in their tenancy, especially in retirement. We should in the general case never force people off the land, especially that housing stock that is in no way prime land in an area. If it's just average land, the LVT should largely just let it be.

I'm not dogmatic about this stuff, the important thing is to just figure out what works best for all, basically creating a society and economic ruleset that would pass if not win John Rawls' http://en.wikipedia.org/wiki/Veil_of_ignorance test.

Troy says

I’m not dogmatic about this stuff

You keep using that word...

Or, "it's funny how nobody really groks what the word really means in the greek"

- MFH landlord, SFH owner, SFH renter, simultaneously. I feel neither exploitative nor exploited. I do pay a lot of taxes though.

I'm in agreement with Troy on an issue that there is no benefit brought by this, just leeching/mooching off the system.

The system, roughly, is that a public commodity (land) is leased to individuals ("owners") in exchange for rent ("taxes") paid into the public trust.

This is pretty much how most public commodities are managed, with some obvious exceptions. It is imperfect, but it is driven by organic processes rather than artificial planned-economy imaginations.

If the debate is whether the public receives enough value in exchange for the owner's right to exploit the resource, then that's a different argument. If you imagine that higher property taxes would result in greater affordability for "owners" or their "tenants", then I'd like to see that explained intelligently.

quesera says

is that a public commodity (land)

land is not a "commodity". Land is variable by location and is immobile. Also, its supply is fixed, land can never be created, only improved. The value of a plot of land is largely determined by everything that exists outside of the lot lines.

f the debate is whether the public receives enough value

that is entirely the argument. My thing about not being dogmatic is just making things work better, and good enough.

I'm not wedded to the LVT, I don't think Norway or Sweden have one and their quality of life and economy is much better than ours.

And it's not about receiving "value" from the LL. The LL adds no value to this economy, he is entirely a parasite. The question is about the community taking back from the LL the value the community adds to the LL's land holdings.

in exchange for the owner’s right to exploit

Georgists say privilege, not right. But this is the philosophical question at the heart of the debate. Georgists say we all have a right to that which we labor to create.

The LL did not labor to create the land, the land title that defines his ownership privilege was expropriated by the state from the commons.

If the story ended there it would not be so entirely horrible, but thanks to development (community amenities) and investment in public goods like roads, land accrues increasing site value over time, which the LL also pockets via rents without having contributed to their creation.

And the story does not end even there, as inflation adds another cascade of rent capture over time.

the resource

and . . . land is not a resource, because it is never consumed. What the LL is actually exploiting is the community who wants to use his land.

If you imagine that higher property taxes would result in greater affordability for “owners” or their “tenants”, then I’d like to see that explained intelligently.

"It was Adam Smith, in his book The Wealth of Nations, who first rigorously analyzed the effects of a land value tax, pointing out how it would not hurt economic activity, and how it would not raise land rents."

http://en.wikipedia.org/wiki/Land_value_tax#Classical_economists

Due to its scarcity, livable land has rental value. This is why this nation has $10T in mortgage debt, trying to avoid paying the man's rent.

In concrete terms, the rent on the place I'm in now is $1500/mo. It was built in 1989 for about $30,000 in construction costs so the current owner is enjoying a current cap rate of around 50% on his original investment, and this cap rate will only increase thanks to wage inflation and Prop 13.

This is how rentierism works -- wage inflation over time pulls money out of the productive economy and to the land monopolists'. This is largely why the ownership class has seen their real incomes rise so much than the bottom two quintiles, who rent and therefore are stuck on the rentslave treadmill.

The LVT just proposes to take this $1000/mo ground rent of this building and have it replace other taxes, impoverishing the LL by taxing away the flow of free money, and enriching everyone else engaged in actual productive employment, by either reducing other tax burdens or providing more public goods.

The LVT also encourages increasing density, which increases supply and thus drives down housing costs.

The LVT of course is highly disruptive to existing business plans and LL debt loads. This is just a philosophical discussion since we will never be able to implement it, not in this lifetime, and probably not without this system collapsing first.

The LVT boosters saw a golden opportunity in the collapse of the Soviet Union, and their arguments deserve a close reading:

http://en.wikisource.org/wiki/Open_letter_to_Mikhail_Gorbachev

if you are indeed interested in an "intelligent explanation" of the merits of the LVT.

Troy says

the basic human right is security in tenancy, LH or FS, SFH or MFH. These are not in conflict with each other, they are just different flavors of tenancy and condominium that combine in a 2 x 2 matrix of options.

People choosing to economize their use of land can choose a condominium (it’s funny how nobody really groks what that word really means in the latin) arrangement with higher density than is possible with SFH. In a LVT regime this would obviously have a significant cost-of-living benefit due to the minimization of land usage — if the current garden apartments I’m in now were converted each unit would have about $80,000 of land value, compared to the typical 3500′ lot here with a LVT footprint 4X greater.

Those choosing a MFH tenancy do not give up any human rights, any more than those choosing to take the subway in Tokyo instead of getting financially raped driving a car there do.

You keep dancing around in circles. You said "Because having a spot of ground to call your own on this planet is a basic human right" in reference to SFH, yet you say being forced into MFH does not give up any human rights. If only owners can occupy SFH then renters aren't choosing, they are being forced. Which is it?

So if all the ll's were impoverished then now one would have the option to rent. Everyone would be an owner? In your world there is no one who is just living someplace for 6 months or a year and doesn't want to tie all their capital (if they have any) up in real estate? I'm beginning to agree with the person who said you are an nutjob.

NYC used rent control to impoverish all the ll's in the 60's and 70's and tens of thousands of really nice buildings were burned to the ground. I remember driving through places like flatbush and east new york going to visit my suppliers. There were long stretches where entire city blocks that were just rubble with an occasional standing but trashed building in the middle of a city with a dire housing crisis. These were vibrant working class neighborhoods less than 20 years earlier.

Troy says

land is not a “commodity”. Land is variable by location and is immobile. Also, its supply is fixed, land can never be created, only improved. The value of a plot of land is largely determined by everything that exists outside of the lot lines.

Everything is limited and of a fixed supply. What do you think we'll run out of first, oil or land?. You just want to live near the ocean. Fine that's your choice but it's not an entitlement to you and everyone who wants to live near the coast. I you're entitled to tenancy, someone who dreams of the uptopia you describe can certainly can build affordable housing middle of the desert. The supply will see infinite to you and the next 10 generations.

bob2356 says

You said “Because having a spot of ground to call your own on this planet is a basic human right” in reference to SFH, yet you say being forced into MFH does not give up any human rights. If only owners can occupy SFH then renters aren’t choosing, they are being forced. Which is it?

I suspect we are talking past each other here.

In an LVT regime owners of SFH would be perfectly free to rent out their units to LH tenants. They just wouldn't be tapped into their tenants' monthly paychecks so deeply, as their yield would be relative to the actual capital cost of the improvements the tenant is enjoying (their rightful property) and not the site value of the lot the improvements sit on (said site value the LL has done absolutely nothing to create).

So if all the ll’s were impoverished then now one would have the option to rent.

Right, SFH renters would become buyers. I really fail to see the bleeping problem here.

If the problem is that buying is too onerous for people, there are ways to streamline things. For one, the LVT eliminates the site value and future rental value of the land from the equation, this will cut the acquisition cost of SFHs by half or more.

If sell-side liquidity is desired, the community authority that is largely receiving the inflows of the LVT can easily establish some sort of land bank facility.

It would also behoove us to eliminate all the paper-pushing bullshit associated with land sales.

In your world there is no one who is just living someplace for 6 months or a year and doesn’t want to tie all their capital (if they have any) up in real estate?

One of the purposes of this LVT idea is to eliminate the boom-bust nature of real estate, said nature driven by its substantial appeal as an investment and not a consumer good. By restoring long-term stability, and also by increasing the supply of housing alternatives to SFH, the cost of living in a community should fall tremendously, enriching everyone, except the leeching LLs of course.

you are an nutjob

This ad-hom normally gets broken out in discussions with people defending our current system, yes.

NYC used rent control to impoverish all the ll’s in the 60’s and 70’s and tens of thousands of really nice buildings were burned to the ground.

LVT is the opposite of rent-control. It removes ALL taxes from actual capital formation and the LL's improvements to the community.

Unlike Prop 13, which actually penalizes LLs when they redevelop.

These were vibrant working class neighborhoods less than 20 years earlier.

yeah, well, this disaster-stuff didn't happen when and where LVT was implemented. Quite the opposite in fact.

burritos says

Everything is limited and of a fixed supply. What do you think we’ll run out of first, oil or land?

Oil is land in its natural state, once severed from the land it becomes a commodity product in competition with other forms of energy.

Running out of oil is not necessarily a tragedy, we will find other forms of energy to create and trade, hopefully superior forms if the history of science & technology is any guide.

China, India, and Bangladesh are in fact "running out of land".

So have Singapore and Hong Kong, but they were quite wise in cutting their parasite landlord class off at the knees via LVT, rent taxes, and social policy like subsidized MFH.

You just want to live near the ocean. Fine that’s your choice but it’s not an entitlement to you and everyone who wants to live near the coast.

LVT does not propose that all rents be reduced to equality, that one acre in Selma be the same rent as one acre in Pismo.

Quite the opposite. The LVT captures the scarcity rent of the most desirable places to live quite amazingly.

There's, what, 500 miles of inhabitable coast in California? Going with $10M per acre of site value for this coastal zone (call it 5 acres in) and a 2.5% LVT rate, that would be 65,000 acres x $10M x 2.5% = $16.5B in annual LVT from coastal site value of this narrow ~1000' strip alone.

Do you really want me to continue exposing how much site value this state has that is untaxed? I'd be happy to do so!

I you’re entitled to tenancy, someone who dreams of the uptopia you describe can certainly can build affordable housing middle of the desert.

The desert lacks government infrastructure investment, community development, and of course any existing productive resource base. That's why its still a desert.

LA was a desert 150 years ago, but it had great natural advantages. Once the city fathers stole the water rights from the Sierras, they were good to go.

Well how about this scenario. My uncle lived in his 1st home for 20 years. He saved and upgraded to a larger home. Instead of selling his primary home, he rented it out. In your utopia, you think he should be mandated to sell it before purchasing the next home correct?

Troy says

Oil is land in its natural state, once severed from the land it becomes a commodity product in competition with other forms of energy.

What doesn't come from the land that we use? Everyone who works, breathes and earns a living, is somehow leeching off the natural land in one shape or form, not just the landlords.

burritos says

In your utopia, you think he should be mandated to sell it before purchasing the next home correct?

Mandated, no. Encouraged by increasing land value taxes, yes.

We should, as much as practicable, be a nation of owners not renters.

California's supply of SFHs are undoubtedly being locked up by Prop 13 protections of long-term holders of tax-protected houses.

Then we throw tens of billions of dollars of Section 8 vouches at the market. This is completely assinine.

Here's a well-known nutjob from the 18th century on this question:

"Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise."

burritos says

What doesn’t come from the land that we use? Everyone who works, breathes and earns a living, is somehow leeching off the natural land in one shape or form, not just the landlords.

but only landlords by definition charge others for these very basics of human existence.

Georgists believe that all takings from the commons generally requires a severance tax.

Landlords also by definition do not leech off the land, they leech off others desiring to use the land.

Troy says

but only landlords by definition charge others for these very basics of human existence.

No, anyone who exploits the land to produce anything of value charges others for the use or consumption of that product. Agriculture, minerals, power, livestock, granite countertops, parking lots.

Troy says

Georgists believe that all takings from the commons generally requires a severance tax.

Georgists should be aware that the takings from the commons were granted in exchange for some value, equivalent to a severance tax. The fact that the "owners" have, individually and collectively, and in concert with public management, happenstance, and exogenous events, made those takings more valuable over time is irrelevant, but good.

Georgists should further be aware that land "owners" make recurring remittances into the public trust for continued use of those takings. If those remittances became overburdensome and the takings reverted to public management, do you suggest that they'd be managed more effectively or fairly, or somehow otherwise bring about a better world for someone?

You have the great benefit of zero real world empirical data to compare your system against the existing, so you can't be proven wrong, per se. Your expectation of improvement is entirely a matter of faith, however.

I don't know where your faith comes from. But for now at least, your election to supreme leader seems unlikely, so I guess it's harmless.

Troy says

it is impossible for the holder of a land title to individually improve the site value of that land, for the site value is dependent on everything OUTSIDE the lot lines.

That makes zero sense. Yes, the title holder cannot improve the "land value" as a line item on the tax assessment -- only to the improvements thereon. But the "value" of all the surrounding "land" comes in large part due to other title holders improvements. The intrinsic value of the land is interesting but inseparable from the aggregated improvements for any sort of "use".

Troy says

This is a continued perversion of the language by you.

Truly, my use of "rights" derives from the contract between title holder and sovereign administrator. You call it privilege, but the entire foundation of real property law disagrees with you. We can both be correct, but as semantic perversions go in this conversation, I contend that yours is the more aberrant.

We've had approximately the same discussion before, and I still respect the depth and nuance of the arguments you espouse, as well as the significance of the problems they hope to address.

I stated before that I disagree with the conclusions reached. I definitely do disagree, but only when burdened by the consideration of implementability. Ditching the existing social contract and ideological inertia, your logic is as rational as any other reconstruction -- though not, to me, evidently superior.

Troy says

I’d settle for elimination of Prop 13 for non-owner occupied in my lifetime, actually.

On this, we agree. I wouldn't stop there, but I'd welcome it as a first step.

quesera says

But the “value” of all the surrounding “land” comes in large part due to other title holders improvements.

Nope. Empty buildings are liabilities not boons unless one enjoys parkour.

It is the community of users -- the business operations themselves -- that create site value, LLs earn their way from the rent.

The intrinsic value of the land is interesting

It's more than merely "interesting". It is the unearned increment itself! Your attempts at being coy about this are amusing.

but inseparable from the aggregated improvements for any sort of “use”.

Calculating the unimproved value of land is an elemental task for assessors. This valuation is generally continuous on maps, though of course million-dollar views and such do provide some variation, as do zoning limits of course.

So this is just arguing for the sake of arguing, for this is just quibbling about a minor detail of how much other improvements affect site value. To the extent that other forms of use add site value to neighbors -- eg. private train right of ways -- they can be incented with a lower LVT burden while that improvement is in operation.

my use of “rights” derives from the contract between title holder and sovereign administrator. You call it privilege,

Privilege itself is "a grant to an individual, corporation, etc., of a special right or immunity, under certain conditions." Sure looks like a land title to me -- when the state grants exclusive rights to someone, these are clearly privileges, by the very root meanings of the word.

It's kinda important to get the basics correct. The perversion I reacted to was your development of this idea that the original grant of land use privilege gives one a inalienable right to retain all future rental income from the land -- or, with immunity hold the title without developing it while the community fills in around it.

That is an utter non-sequitur. For one, the grant of fee simple estate in land already includes the tax liability to the state. The question isn't whether the state can assess taxes on land, but what it should tax, for what duration it should tax it, and by how much.

Understanding that land titles are a collective loss of rights for a granting of privilege is a very important point.

but the entire foundation of real property law disagrees with you.

Lawyers, lawmakers, and judges own a lot of land, yes.