Re: land value taxation and zoning

From: The Trucker (mikcob_at_verizon.net)
Date: 02/18/05 

Date: Thu, 17 Feb 2005 19:40:53 -0800

royls@telus.net wrote:

> On Wed, 16 Feb 2005 13:11:51 -0800, The Trucker <mikcob@verizon.net>
> wrote:
>
>>royls@telus.net wrote:
>>
>>> On Mon, 14 Feb 2005 23:18:46 -0800, The Trucker <mikcob@verizon.net>
>>> wrote:
>>>
>>>>royls@telus.net wrote:
>>>>
>>>>> On Sun, 13 Feb 2005 21:24:19 -0800, The Trucker <mikcob@verizon.net>
>>>>> wrote:
>>>>>
>>>>>>royls@telus.net wrote:
>>>>>>
>>>>>>> On Sun, 13 Feb 2005 16:07:17 GMT, "sinister"
>>>>>>> <sinister@nospam.invalid> wrote:
>>>>>>>
>>>>>>>>How much of the inefficiency in land use allocation is do to not
>>>>>>>>taxing Ricardian rents, versus due to excessively restrictive,
>>>>>>>>low-density-promoting zoning ordinances?
>>>>>>>
>>>>>>> I suspect they are roughly similar, and zoning may even be the worse
>>>>>>> of the two. After all, a lot -- all? -- of the land held out of use
>>>>>>> for speculative gain is awaiting nothing other than rezoning.
>>>>>>
>>>>>>I do not see how one can have LVT without zoning to protect
>>>>>>investments in fixed capital improvements.
>>>>>
>>>>> Well, Houston did not have zoning for a long time, and it had no
>>>>> problem with protecting fixed capital improvements. I don't see the
>>>>> hazard you seem to anticipate, or why it would be connnected
>>>>> specifically to LVT.
>>>>
>>>>At present the owners of land and improvements lobby government to
>>>>do what it takes to get a new shopping center next to their farm
>>>>or their home because they will profit from rising land value.
>>>
>>> True. But this lobbying is moderated by the ratio of expected land
>>> value increment to value of improvements that would thereby be made
>>> obsolete. IOW, it is the landowners who have made little or no
>>> investment in improvements who most want such zoning changes.
>>
>>The moderation does not win. Not ever.
>
> Oh, nonsense, of course it does. Lots of NIMBY campaigns succeed.

Your point is valid. I need to stop using words like "never". It
is, however, that in Republican America moderation seldom wins.
 
>> Widow Jones WILL move. In
>>the current environment the Widder gets a lot of money to help her
>>relocate.
>
> Unless she is only a tenant, of course, in which case she is not
> really a human being, and unlike full human beings (defined, of
> course, as those who own land), deserves no compassion? That about
> it?

Another valid point, but somewhat off topic. I am attempting to address
the issue of stores of wealth or investments as these relate to the
fixed capital improvements such as one's home. Regardless of how
many people are NOT harmed by land use changes there are those who
will be harmed. And such individuals are not necessarily Satanic
greedsters. I'm mot arguing against LVT and probably never will.
But some protection _should_ be institutionalized so as to permit
fixed capital improvements from being made worthless by land use
changes. Such institutionalized protections should also expire and
the term of such protectins should be know to all. The question arises
as to whether this would create a situation in which people did not
keep their homes in good order, a situation where they would simply
allow the dwellings to deteriorate along with the approaching termination
of the protections.

> Please explain why the widow Jones, who owns land and is displaced by
> LVT, is deserving of more compassion (or money, or assistance with her
> move) than the even older and frailer widow Smith right next door, who
> is a _tenant_ of Widow Jones, and is displaced by the exact same
> changes in market conditions.

It's actually pretty simple: The widow has invested her life's savings
in the improvements and the tenant hasn't. Perhaps the tenant has
invested her life savings in gold bullion or diamonds or stocks and
bonds.

>>But with full on LVT your investment in fixed capital is
>>simply GONE.
>
> Nonsense. People would simply choose to redevelop sites where the
> improvements were fully depreciated, because it would be cheaper to
> acquire them.

I do not see why this is on point. There is most certainly less of an
obstacle to development and redevelopment of fixed capital. What we
might see if more versatility in basic structures. Maybe we would
see much more multifamily structures that can easily be converted
to office space or to shops.

>>There is, of course, the reverse of this. What if
>>someone decides to put a landfill upwind of The Widder?
>
> Or upwind of anyone?

The point is that the investment in one's home is shot in that case
too. But at least the rent would go way down. Instead of being
driven out of the place by the taxes/rent you'd get a massive
break on the rent and just have to hold your nose.

>>>>In an LVT system the farmers will be lobbying city government to keep
>>>>Wallmart or others from putting a shopping center next to their farm.
>>>
>>> No, there would be no point in such lobbying because under LVT, no one
>>> would want to put a shopping center next to a farm.
>>
>>Stupidity disguised as Republicanism will still be rampant.
>
> Even when it becomes distinctly unprofitable?

Yep. Even then.

>>One of the
>>big icons of leadership is proving that you can do a lot of stupid crap
>>and get away with it just by prancing around being "moral".
>
> Well, if people want to go bankrupt, I suppose that's their privilege.
> But IMO you overestimate the role of stupidity vs greed under the
> current system.

And I think you underestimate the role of pure power persuit.

>>> It would be a
>>> waste of their capital investment. If WalMart were not being given
>>> billions of dollars in land use favors by local governments, they
>>> would not be interested in developing megastores on greenfield sites,
>>> because that's not where the customers are.
>>
>>You seem to be saying that the capital improvement called a Wallmart
>>store WILL increase the value of the land under the store and cause
>>the stored to be unprofitable.
>
> No, the capital improvement being situated so far from customers will
> cause it to be unprofitable.
>
>>Elsewise, the Wallmart people will
>>build the store in the boonies just as they do now.
>
> ?? They wont be able to pocket the increased _land_rent_ under LVT.
> Hello?

I don't think they do that now (but I could be wrong). They profit
from the greatly reduced initial cost and they will typically get
tax abatement for some amount of time. And they build the stores to
offer enough to attract other merchants to the area such as fast
food and convenience stores. Then the homes start being built.
The dentists and such then come in. But I don't know how long they
get the tax abatement. All of this (other than the tax abatement)
is probably irrelevant in that if they could build the store downtown
for the same initial cost (LVT = sales price of land not a problem),
then they MIGHT do so. Right now they seek low initial cost of land
_AND_ low taxes in the near (or not so near) future. With LVT they
would still seek tax abatement and would probably get it in the
boonies.

>>You will find
>>very few downtown Wallmarts in today's environment.
>
> Because downtown land costs more than suburban politicians.

And those politicians will not change.

>>Wallmart seems
>>to seek out the least expensive land.
>
> No, it seeks out land whose current rental value is being held
> artificially low by politicians who can be paid off to increase the
> usage density once WalMart owns the land.

I do not believe that the politicians are holding the value down
but I do agree that after the fact they will seek to raise it.

> Such land use favors from
> corrupt politicians are the primary (possibly the only) source of
> WalMart's profits.

With the exception of tax abatement I find this very hard to swallow.

>>Wallmart tries to build self
>>contained "cities" with health care, bank, etc.
>
> But only on land that would have been much more valuable before
> WalMart bought it, if the previous owner had had WalMart's money,
> pull, and lack of conscience.

I don't see the conscience thing. There are those who have the
knowhow, will, and power to make things happen. That is not
necessarily bad.

>>>>So too the people with homes that do not want the use of the land
>>>>to change to commercial use because their rent/taxes will go through
>>>>the roof.
>>>
>>> ?? That's _with_ zoning and LVT. If there were no zoning, the land
>>> use would change gradually, and the increased rent in SFR areas as
>>> usage density increased around them would simply reflect the increased
>>> convenience of living closer to shopping, jobs, etc. As improvements
>>> depreciated and highest use changed, parcels would gradually shift
>>> from SFR to multi-family or commercial use.
>>
>>I, Roseann, Roseanna Danna, Trucker will need some land use restrictions
>>in place before I sink a pile of dough into building my retirement home.
>
> Fine. Irrationality is your privilege, too. The good people of
> Houston didn't need them. They were willing to rely on other people's
> common sense, and their confidence was well placed.
>
>>The reason for zoning is to protect these investments in fixed capital.
>
> Nonsense. It's to shift land rent from the politically unconnected to
> the politically well-connected.

I have my reasons and you have yours.

>>> Granted, there are transitional issues, as a lot of land is now
>>> inefficiently used, and there could be some rapid changes in usage
>>> patterns following a shift to LVT. But transitional issues can be
>>> managed by applying gradual approaches and common sense.
>>
>>Where would we be finding this "common sense".
>
> In the common people.

Would that be the same common people that elected a lying pig as
president. Lying and deceit while claiming to be "moral"
seems to pay very well.

> Please understand: Houston had no zoning for many years. There was no
> such problem as you fear, or at least no more of it than in cities of
> comparable size that _did_ have zoning.

We DID have deed restrictions (I lived in Houston for 15 years).
 
>>This is much like a
>>unicorn in today's lying fascist pig Republican regime.
>
> The proposal is to replace that regime.
>
> -- Roy L

Mine too. Now tell me how we get it done. 

-- 
"I know no safe depository of the ultimate powers of society but
the people themselves; and if we think them not enlightened enough
to exercise their control with a wholesome discretion, the remedy
is not to take it from them, but to inform their discretion by
education." - Thomas Jefferson.  http://GreaterVoice.org

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