The process is interesting but just to make the point - I
often see Americans obsessing over the implementability of land valuation processes as if its entirely new and needs to be invented when other states and countries have established systems that have been working for in many cases over a century.
You're aware that you're citing the policies of the province that contains the second most expensive place in the world to own a home, right? Sydney is worse than the Bay Area when adjusted for incomes, and most other cities in Australia are almost as bad.
Most Americans spend about 0 seconds of their lives thinking about land valuation methods, unless you count complaining about how their property taxes are too high (which is a global phenomenon in my experience).
And every municipality in the US is able to assess property currently, though how good of a job they do varies of course.
This site, as does reddit and a couple other similar places online, has a very vocal portion of the userbase that spends a significant amount of time obsessing over socialist policies that are wildly unpopular overall and largely impossible to implement at this time.
Don't take it as a representation of Americans overall.
This taxation rant misses the point. What prevents development isn't the prospective taxes. It's all the other regulations that limit what you can do and make what you can more expensive pushing the payoff time out into the realm of "f this I'll buy stocks instead".
I think it speaks volumes about the LVT crowd (kind of hard to fault the author personally when he exists in that filter bubble) that the author's entire section on land use restrictions speaks only to deed restrictions and not government imposed ones.
The point of that section was not about the effect of land use restrictions on overall value but on local differences. If you are comparing the value of two different pieces of land with the same land use restrictions then they don't affect the value calculation. Deed restrictions are called out because they can affect the comparative value of two different pieces of land within the same zone.
I recognize that this goes a bit against the spirit of the article, but I struggle to even conceptualize what land value means and how it can possibly be independent of its use.
Land doesn’t really have inherent value, it comes from what you could do with it, but that depends a on a lot of factors including what it’s currently used for and who owns it.
One problem to illustrate is that land value is typically calculated per area, but the value obviously depends on how you subdivide a particular piece of land.
If I try sell a single sqft in my backyard it’s obviously pretty useless and so the value is low. But if I sell the entire plot the value of that backyard will be much higher, and a developer who manages to buy the whole neighborhood would probably value that even higher
That's still value that's inherent to the land, it's just that you destroy/create value when you change the boundaries of the property.
Land value is not supposed to be attached to what you use it for, but what you _could_ use it for. This is inherent to its location and the natural resources that are on/in it. (Plus, as I guess you have hinted, its shape and what it's adjacent to).
The idea of land value is to separate those inherent things, which weren't created by the owner, from the things they actually did create.
The main things we are interested in here are exactly what I mentioned:
- Land in NYC is valuable because it's in NYC. Landlords didn't create that value so we want to stop them capturing rent on it (while allowing/encouraging them to capture rent on the expensive buildings they fund)
- Some land has oil under it. Private individuals shouldn't be able to get rich just be owning that oil, they didn't create it (but they _should_ be able to get rich by funding drilling projects, if it satisfied a demand).
>Side-by-side owners of physically/legally identical land will pay the same taxes regardless of what is built on their properties
Do we really want this? It is pretty established that higher valued assets incur higher property taxes. Making skyscraper owner pay the same tax as the next door owner of a small bodega just doesn't make sense. Old beat up Corolla owner to pay the same tax as a Lamborghini owner. (It reeks of perverse socialism - dividing everything, in this case tax burden, equally in the most simplistic way, and not surprisingly that LVT is usually pushed for by leftist "progressives" while there is nothing progressive in it really).
I think the point of how the city center is totally disconnected from the value of the property is super spot on, for example in my hometown, Santiago de Chile I have seen or it is my impression that although when the city was founded the city center, it had the highest value, and it is where aristocratic families lived today the reality is quite the opposite, the price of the properties has moved even towards the periphery of the city in comunas (boroughs) such as Barnechea and Vitacura and the city center of the city is perceived as a place of low status; On the contrary in the city where I live now, Berlin, the center of the city Mitte is in my perception where the most expensive properties are, so it’s difficult for me, to understand what is the connection between the city center and the value of the properties. In the case of Santiago the neighborhoods that are most appreciated, they are really super far from everything and require a road trip to go to the airport or any other central place, then perhaps I imagine that the value of the land, is very subjective and very based on the culture of the city. Despite the fact that the center of Santiago I find it a beautiful and quite interesting place, it is perceived by being perceived under status in a culture where status is important, that seems to be the most important factor more than any other type of deterministic formula.
Perhaps it could also be argued that because the resources received by neighbourhoods in Chile are based on the affluence of their residents, it follows that the comunas with more resources are, of course, more important and appreciated. This is because the people who live there are considered more valuable, even though I may be less important in other ways.
Any kind of "theoretical valuation for tax purposes" is just fundamentally going to be flawed. They're mixing one concept of value - market price - with an artificial concept they use to try and guess what the market price ought to be, but without any buyers or sellers involved. Valuing assets is a hard problem, it's why we have such a giant financial sector.
The goal of an assessor's office is to set the value of property to it's fair market value - the price it would command if sold fairly on that day.
It's not appropriate for an assessor's office to further a goal other than the above, particularly a public policy that tries to increase or decrease taxes based on a property's characteristics like how much land it contains or how many stories it has. That's for the legislative body.
If you want to create (dis)incentives for types of property, you do it AFTER fairly valuing property.
The author lists out 4 testable statements that a property tax should meet (which are valid IMO), yet doesn't recognize that an LVT fails to meet them!
There is an inherent relationship between what is built on a parcel and its surrounding parcels and the desirability (which greatly influences the value) of that parcel. That relationship makes an LVT fundamentally untenable.
On top of that, people with expensive improvements to their parcel should pay more in property tax, as at least some of that tax goes to fund what is effectively insurance for your improvements (emergency services at a minimum, and you could argue that high quality local government services in general are a form of insurance for the value of those assets).
The 'simplest' method is to allow landowners to declare the value of the land they own. Tax based on this value and let governments buy at the stated land value. Everything else is fluff.
I always assumed something like PageRank would be a good proxy for value - how closely linked your acre of land is to other square acres of land that other people think are valuable - the simple version just measures road or rail access but the more sophisticated would measure journeys between, or tonnage or value of goods travelling etc.
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[ 2.6 ms ] story [ 35.8 ms ] threadFor instance below from Australia
https://www.nsw.gov.au/housing-and-construction/land-values-...
And every municipality in the US is able to assess property currently, though how good of a job they do varies of course.
This site, as does reddit and a couple other similar places online, has a very vocal portion of the userbase that spends a significant amount of time obsessing over socialist policies that are wildly unpopular overall and largely impossible to implement at this time.
Don't take it as a representation of Americans overall.
I think it speaks volumes about the LVT crowd (kind of hard to fault the author personally when he exists in that filter bubble) that the author's entire section on land use restrictions speaks only to deed restrictions and not government imposed ones.
Land value is not supposed to be attached to what you use it for, but what you _could_ use it for. This is inherent to its location and the natural resources that are on/in it. (Plus, as I guess you have hinted, its shape and what it's adjacent to).
The idea of land value is to separate those inherent things, which weren't created by the owner, from the things they actually did create.
The main things we are interested in here are exactly what I mentioned:
- Land in NYC is valuable because it's in NYC. Landlords didn't create that value so we want to stop them capturing rent on it (while allowing/encouraging them to capture rent on the expensive buildings they fund)
- Some land has oil under it. Private individuals shouldn't be able to get rich just be owning that oil, they didn't create it (but they _should_ be able to get rich by funding drilling projects, if it satisfied a demand).
Do we really want this? It is pretty established that higher valued assets incur higher property taxes. Making skyscraper owner pay the same tax as the next door owner of a small bodega just doesn't make sense. Old beat up Corolla owner to pay the same tax as a Lamborghini owner. (It reeks of perverse socialism - dividing everything, in this case tax burden, equally in the most simplistic way, and not surprisingly that LVT is usually pushed for by leftist "progressives" while there is nothing progressive in it really).
Perhaps it could also be argued that because the resources received by neighbourhoods in Chile are based on the affluence of their residents, it follows that the comunas with more resources are, of course, more important and appreciated. This is because the people who live there are considered more valuable, even though I may be less important in other ways.
It's not appropriate for an assessor's office to further a goal other than the above, particularly a public policy that tries to increase or decrease taxes based on a property's characteristics like how much land it contains or how many stories it has. That's for the legislative body.
If you want to create (dis)incentives for types of property, you do it AFTER fairly valuing property.
TFA conflates the two ideas.
The author lists out 4 testable statements that a property tax should meet (which are valid IMO), yet doesn't recognize that an LVT fails to meet them!
There is an inherent relationship between what is built on a parcel and its surrounding parcels and the desirability (which greatly influences the value) of that parcel. That relationship makes an LVT fundamentally untenable.
On top of that, people with expensive improvements to their parcel should pay more in property tax, as at least some of that tax goes to fund what is effectively insurance for your improvements (emergency services at a minimum, and you could argue that high quality local government services in general are a form of insurance for the value of those assets).
I think