It also requires property owners to do EXTENSIVE research and information gathering CONSTANTLY to ensure that the number they put down is reasonable.
Many of them literally can't (ex: my 87 year old Neighbor Phylis doesn't care what her house is worth, because she plans to die in it, and isn't seeking to maximize utility. Instead she wants to pass peacefully in the house she remembers raising her kids in, and has lived in for the last 50 years. She has no car, is in a wheelchair, and uses basically no online services - how is she going to go evaluate the right value for her house?).
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Basically - this plan sounds great for 5 seconds and then you realize people would literally revolt the second you pass it.
Every year in Chicago.
My house has been, and still is, assessed for 600K over what I paid in Nov. 2021. It had been on the market since 2016, until I bought it. The price I paid is the value of the house.
First assessment appeal denied.
Second appeal lost in the system.
We have to fight against an unfair and arbitrary tax system EVERY year.
Now they are going to index the tax rate to inflation.
Maybe other communities are under-taxed, but mine is not.
AFAICT, hiring an attorney is the way to go. Then you still have to pay, but much less overall. I’m about 80% convinced that the tax assessors are in it with the appeal attorneys to almost literally write themselves checks. Not that such misdeeds would ever occur in Chicago/Cook…
what you paid for it is irrelevant if people are buying the neighboring places for double or triple the price.
if it's worth so much more than you think, sell it
Guaranteeing that people can take up the same space that they did when the population was half its current level is a great way to ensure that future generations have nowhere to live.
People will revolt anyway. For instance, in California they revolted when we attempted to remove Prop 13 for businesses.
People who are hoarding a huge house in a desirable area to do nothing but slowly die in need to be fucked over. They're worse than speculators.
> Many of them literally can't (ex: my 87 year old Neighbor Phylis doesn't care what her house is worth, because she plans to die in it, and isn't seeking to maximize utility. Instead she wants to pass peacefully in the house she remembers raising her kids in, and has lived in for the last 50 years. She has no car, is in a wheelchair, and uses basically no online services - how is she going to go evaluate the right value for her house?).
She should quote how much someone would have to pay to make it worth her moving out - that's something she should be able to figure out for herself. If she wouldn't move for less than 3 million, quote it at 3 million.
I don't even think the author is fully behind it, seemed more like a thought experiment as a reply to grandparent.
Regarding grandma: I don't want to kick her out of the house. But there is a real issue here: young families can't find affordable places, while old families live in places, that are too big for them because the kids left. If they rent, they also pay significantly less than the younger family, since they are on older contracts. Once new people move in, rent is raised to the new level. The older people don't want to move out, because they would have to pay more for their new, smaller place, than the old, bigger place. Meanwhile the young family also has to finance the pensions for that old family.
Noone is being evil here, but ... it sucks. And every idea to work on it is shut down as being unfair to the people who already own houses. Even building new houses is usually opposed by the people who already have houses in the area. If I never get the chance ever to own one, I don't really feel like I have to protect the interest of house owners.
Marginally shorter cycles before property becomes more useful in exchange for completely fucking over the elderly, marginalized groups, and those without free capital.
It's a bonkers bad idea.
As others point out, most LVT schemes have significantly improved treatment for owner-occupied housing.
The big idea here: land value is something that is established publicly and collectively rather than by any individual owner. It makes sense to tax use of this public good to reduce deadweight losses .... instead of primarily taxing improvements which disincents investment and increasing DWL.
A land value tax can be expected to reduce the cost of housing. That is, it incentivizes more effective land uses-- as opposed to property taxes that include improvements, which reduce the incentive to build higher densities.
