Instead of demanding rent control or rent subsidies it would be more effective to demand a land reform and a land value tax.
Georgism is one of those things that has had a long history of success. However, just like the end of Feudalism it is one of those things that can only be acquired by spilling blood as it is extremely unlikely to make the transition during peaceful times.
The "weak men cause problems which leads to strong men who solve them" meme is a good illustration of this problem. During peace there is no urgency, people aren't willing to step over certain hard lines that would be beneficial for everyone but are considered a social taboo over the short term. Some maliciously hedonistic individuals think they can sacrifice some benefits to society for personal gain by staying within the hard lines and abusing "oversights" or "loopholes" that the law set. Until people are starting to burst out in anger and start a "revolution" that would be completely unnecessary if people in power just agreed to adopt the peaceful solution immediately. It's not like Georgism is going to eat the rich, instead it upgrades the capitalists into a more respectable "class" as they can no longer be blamed for this type of exploitation. Let socialists and marxists become an extinct species as they have less and less to complain about.
The loophole is the fact that we as a society have decided that we don't have to share our land with new arrivals (migrants and newborns) and that the cost of public infrastructure should not be passed onto the beneficiaries of that infrastructure.
Not in the long term if it leads to unproductive property being put to better uses, like building housing.
Land value taxes aren't a silver bullet that can solve problems like California's permitting process, but it would certainly align incentives in a much healthier direction than Prop 13 does.
Just to add, Singapore is quite unique in that it has like 85% homeownership (most of it government housing) and there are virtually no homeless people
It's closer to 78% and that is still potentially misleading .Young people living with their parents because they can't get a HBD flat are also included in that 78% figure.
I think the West could certainly resolve their housing problem using Singapore's approach:
- government owns the land
- government sells 99-year leases to private developers
- government uses profits from land sales to subsidize "purchase" of said housing
- once the 99-years is up, the land goes back to the government, residents find somewhere else to live, the land is cleared and resold under a new 99-year lease
In theory, sure - but even Singapore hasn't been around long enough to witness what happens when the 99 year lease is finally up. In a market of housing shortage, there would be strong pressure on the government to keep extending the lease to keep the limited housing stock around, at least in an American context.
the way this happens in singapore is pretty well defined
- properties can “top up” their 99 year lease, if the developers/owners want to.
- at the end of the 99 year lease, the owners can sell to a third party developer if there is demand (they’d still have to move). this has happened before many times too. this is called an en bloc sale in singapore.
also, keep in mind singapore also has 999 year leases and “freehold” (effectively the “forever” style of property ownership common in the usa). freehold properties are both rarer and more expensive.
something like 80% of the land in singapore is on a 99 year lease.
My concern is that while in theory this process seems fine, I wonder how it'll work in practice when long term leases actually end. For what it's worth, this is pretty much how public housing in India works as well, but we have yet to find out what happens when the leases actually come due. In India we can largely avoid the problem by throwing more and more "undeveloped" land towards housing. If anything, the government has a rather encouraging attitude to convert leasehold properties to freehold, at least for private residences built under the leasehold schemes.
> this has happened before many times too.
I assume this is developers selling before the 99 year lease is up, since the legal entity of Singapore and this leasing arrangement haven't been around long enough to see what happens when the lease is up.
If presumably 80% of the housing stock in SG is held in such an arrangement, what happens if a major chunk of leases come due in close succession of each other, eg, 10%? 10% of the population would be expected to move to housing stock which doesn't exist yet.
i don't have data to back this up, but i'm sure the data is out there, given how meticulous the singapore government is with their planning:
- i can't imagine the government will elect to demolish and resell the land to a new developer in the majority of the housing stock as it comes due. therefore, many of the residents will get a pay-day at the end of the 99 year lease, which will soften the blow of the lease end.
- this is all already priced into the property you buy, and you're doing it with your eyes wide open. what determines the price of the property you buy? factors like: (1) the closer the property is to the 99 year mark (2) the more the run down it is [and therefore likely to be torn down] (3) whether or not the property makes sense given evolving zoning/use/density/purpose requirements.
The issue is that at this point it is a largely theoretical exercise, and we don't really know how things will turn out when the leases do run out. There's a lot of things that have to align for things to go smoothly, and while you seem confident that the SG government will figure things out, I'm not sure that could work in probably any other country. Indeed, we don't really know if SG will handle it competently. Time will tell.
yes, that's a fair point. it is entirely at the discretion of the government.
that being said, if it weren't, the concept of a 99-year lease wouldn't have any teeth.
indeed, your point is a central pillar of the land development policy in singapore -- the idea that things evolve and the government needs to make decisions for the 'greater good'. the same concept exists in the usa (imminent domain; a completely different implementation but still one that strips assumptive rights that a property owner has).
These were just 191 units, of which 135 were foreign workers who would have little sway anyway. If 80% of all land in SG is already held in lease from the government (and perhaps 80% of housing stock) in the ~ 60 years SG has been a nation state, more and more leases will come due very close to each in the future with greater and greater potential for a gap between housing supply and demand. This even assumes people will simply accept it. Sure, perhaps this might even work in the very specific context of Singapore, but I don't think this could work in the same way in the West.
> Why do you assume the government can’t plan out new property to replace the old?
I'm not - but this was 191 units. What happens when 20,000 units expire in a single year? You have a lot more confidence in government than I do. Besides, your top level comment was about how western countries could resolve their housing crisis with the SG model. My contention is that the SG model as it exists could only work in SG - if it does at all - which still remains to be proven in the coming decades.
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[ 3.2 ms ] story [ 70.7 ms ] threadThe "weak men cause problems which leads to strong men who solve them" meme is a good illustration of this problem. During peace there is no urgency, people aren't willing to step over certain hard lines that would be beneficial for everyone but are considered a social taboo over the short term. Some maliciously hedonistic individuals think they can sacrifice some benefits to society for personal gain by staying within the hard lines and abusing "oversights" or "loopholes" that the law set. Until people are starting to burst out in anger and start a "revolution" that would be completely unnecessary if people in power just agreed to adopt the peaceful solution immediately. It's not like Georgism is going to eat the rich, instead it upgrades the capitalists into a more respectable "class" as they can no longer be blamed for this type of exploitation. Let socialists and marxists become an extinct species as they have less and less to complain about.
The loophole is the fact that we as a society have decided that we don't have to share our land with new arrivals (migrants and newborns) and that the cost of public infrastructure should not be passed onto the beneficiaries of that infrastructure.
tax will be spread out over lots of people in high density
Land value taxes aren't a silver bullet that can solve problems like California's permitting process, but it would certainly align incentives in a much healthier direction than Prop 13 does.
LVT pressures land owners to use land more productively = more rental units available = lower rents.
It means lower property prices though, and it would push a lot of mortgaged property underwater.
- government owns the land
- government sells 99-year leases to private developers
- government uses profits from land sales to subsidize "purchase" of said housing
- once the 99-years is up, the land goes back to the government, residents find somewhere else to live, the land is cleared and resold under a new 99-year lease
- rinse and repeat
- properties can “top up” their 99 year lease, if the developers/owners want to.
- at the end of the 99 year lease, the owners can sell to a third party developer if there is demand (they’d still have to move). this has happened before many times too. this is called an en bloc sale in singapore.
also, keep in mind singapore also has 999 year leases and “freehold” (effectively the “forever” style of property ownership common in the usa). freehold properties are both rarer and more expensive.
something like 80% of the land in singapore is on a 99 year lease.
personally i think it is a fantastic system.
> this has happened before many times too.
I assume this is developers selling before the 99 year lease is up, since the legal entity of Singapore and this leasing arrangement haven't been around long enough to see what happens when the lease is up.
If presumably 80% of the housing stock in SG is held in such an arrangement, what happens if a major chunk of leases come due in close succession of each other, eg, 10%? 10% of the population would be expected to move to housing stock which doesn't exist yet.
- i can't imagine the government will elect to demolish and resell the land to a new developer in the majority of the housing stock as it comes due. therefore, many of the residents will get a pay-day at the end of the 99 year lease, which will soften the blow of the lease end.
- this is all already priced into the property you buy, and you're doing it with your eyes wide open. what determines the price of the property you buy? factors like: (1) the closer the property is to the 99 year mark (2) the more the run down it is [and therefore likely to be torn down] (3) whether or not the property makes sense given evolving zoning/use/density/purpose requirements.
The default is - the land goes back to the government and you get $0.
Some areas are being selected for lease extensions and other en bloc development (but that happens well before the lease is up).
But the government has come out and said “there will be few leases where that happens”.
that being said, if it weren't, the concept of a 99-year lease wouldn't have any teeth.
indeed, your point is a central pillar of the land development policy in singapore -- the idea that things evolve and the government needs to make decisions for the 'greater good'. the same concept exists in the usa (imminent domain; a completely different implementation but still one that strips assumptive rights that a property owner has).
https://www.straitstimes.com/singapore/all-191-units-at-geyl...
Why do you assume the government can’t plan out new property to replace the old?
There is no reason why they have to wait until the last day of the 99-year lease. There has already been talk of redevelopment of land prior to that.
The point is the government has made it clear - there will be no widespread lease extensions nor en bloc development. Most will simply expire.
I'm not - but this was 191 units. What happens when 20,000 units expire in a single year? You have a lot more confidence in government than I do. Besides, your top level comment was about how western countries could resolve their housing crisis with the SG model. My contention is that the SG model as it exists could only work in SG - if it does at all - which still remains to be proven in the coming decades.