undefined | Better HN

0 pointsCharlieDigital3mo ago0 comments

    > If the demand for housing is high, zoning fees can also be used to make developers pay for the infrastructure upfront...

It's not that simple because these often end up as legal battles and in some cases, there are laws already on the books at the state and municipal level that would have to be changed.

The developer for sure does not want to build a school and even if they build the school, they are not going to be paying for the teachers that are going to need to support the increased student body for every decade into the future; that's on the taxpayers.

0 comments

3 comments · 1 top-level

jltsiren3mo ago· 2 in thread

The underlying assumption is that laws will be changed when necessary. If it's not possible to do that, most issues probably can't be fixed.

More fundamentally, this is related to the principle of subsidiarity that is occasionally popular in the EU. Everything the government does should be done by the lowest level that can reasonably do it. And to enable that, local and state governments should have sufficiently wide tax bases.

CharlieDigitalOP3mo ago

Laws are voted on by the people. And if the municipal elections are scoped to current residents, they will vote to not expand in almost every case.

At the state level, we have housing laws that mandate ratios of affordable housing. Many townships faught this in court (and lost) because schools and infrastructure are capital projects. Bonds are secured today against some future tax base.

Don't forget that developers and investors are voters too (and lobbyists) who are going to vote against the municipalities.

My point: it is a nuanced situation and not as simple as "Got mine FU" or "just build more". Build where? How do you pay for it fairly?

jltsiren3mo ago

People often vote to support new housing, as long as the entire system works reasonably well.

My solution was to widen the tax base to make the system work better.

The incentives around property taxes do not support significant new construction. If housing becomes more affordable, tax revenue per capita goes down, while local government spending stays the same or increases. Local governments should therefore not rely too much on property taxes.

Income taxes, on the other hand, are good. You are taxing things you want to grow, and you get more tax revenue when your policies are good to the people. Local governments might want to collect more income taxes and less property taxes.

When the demand for housing is high, zoning creates significant windfall to the landowner. Some of this windfall can be taxed to support infrastructure construction.

1 more reply

j / k navigate · click thread line to collapse