Is there any existing tax system that encourages new developments? I wonder if that would help with this situation. I understand that communities resist new apartments/high rises that will increase density and traffic etc, but if there was a tax incentive to existing homeowners, that might help people change their minds.
>Any natural resource which is inherently limited in supply can generate economic rent, but the classical and most significant example of land monopoly involves the extraction of common ground rent from valuable urban locations. Georgists argue that taxing economic rent is efficient, fair and equitable. The main Georgist policy recommendation is a tax assessed on land value
I live in the Vancouver area, where city councils are almost entirely populated by developers or candidates supported by developers. So by all appearances, it's friendly to developers.
What's wrong with this picture? Developers love building luxury condos. 3-bedroom apartments? Not sexy. Low income housing? Not sexy. Unoccupied luxury condos? No problem, refusing to sell keeps those valuations up, which you write off as a loss -- easy $0 tax bill!
And then the really juicy shit. We're expanding mass transit! Great, right? Stations are great place to put the high density, walkable neighborhoods! But who chose the locations of the stops? Developer-controlled city councils. It reeks of self-dealing, especially when it appears that the developers bought up the land before the station locations were announced...
So. Be careful what you wish for. It's not just "new developments" that we need, it's high density, affordable housing.
My understanding is that land value tax would actually increase the taxes paid by existing residents as more people move in.
For example, if a town has 1000 families split among 1000 equal parcels of land, each landowner would contribute enough taxes to the city budget to provide services for 1 family. If I then take 100 parcels of land away and put 600 apartments on them, now I have 1500 families among 1000 parcels of land. The city will now require each landowner to cover the budget costs of 1.5 families
Your math is wrong. Assuming that desired tax revenue should scale linearly with the number of families, the owners of the non-apartment parcels would be paying 1.35 times what they paid before the apartment building was built, not 1.5.
However, even ignoring all of the questionable assumptions that go into such an unrealistic scenario, the tax justifies itself since that neighborhood was clearly massively underdeveloped compared to its land value (i.e. housing demand).
