Usually the obstacle is they're not permitted to, not least because the neighbours don't want it. LVT doesn't solve the neighbours not wanting it - at best they get a small tax reduction but they still live next door to a glue factory and will lose money selling their house. For some things it makes it worse: now people protest against mass transit they don't think they'll hear or will bring the "wrong sort of people" into the neighbourhood because land near a transit hub will be in a higher tax bracket. And if LVT is assessed on development potential of the land, homeowners that dont want to sell to developers should absolutely love some more restrictive covenants on the neighbourhood that mean the nice plot they live on is no longer classed as suitable to build anything bigger than the house they already live in.
Yes, that's the point, the current levels of incentive are not working so we need to crank it up
> LVT doesn't solve the neighbours not wanting it
The point is to crank up the pain, a lot. NIMBY-ism can be very local since not every parcel of land is being developed at the same time, but the beauty of LVT is that land value doesn't vary much in a local immediate area, so it hits everyone the same. The idea is that if everyone is hurting, they will seek relief as a group by overall relaxing restrictions that would better allow them to meet their tax burden.
> For some things it makes it worse: now people protest against mass transit they don't think they'll hear or will bring the "wrong sort of people" into the neighbourhood because land near a transit hub will be in a higher tax bracket.
This already happens. Those who want to NIMBY against new development will do so in any shape or form it takes, and it's not clear that the current paradigm is really effectively addressing this either.
> And if LVT is assessed on development potential of the land
LVT is assessed on land value, and development potential is but one piece. Other pieces include convenience, good amenities like parks and schools, etc.
Part of why I find LVT so appealing is that it has the potential to address (not necessarily completely solve, but address) the US's very unequal system of things like access to good schools, parks, convenience that are more or less funded by local property taxes; if you want good services, you will also be forced to open those up to others as well to address your tax burden.
LVT would force these people (on the margin) to move to less desirable areas since their tax bill will go up. When they people will buy their house and want higher density housing put it since it's cheaper than single family homes under LVT. Over time all the single family home wanters will be forced to live further from the city center/desirable areas as land value continues to rise due to development in the area.
Not even going to get into the weird incentives/pressure this would create for zoning boards.
