Increasing taxes at a higher rate than inflation on a homeowner who is given raises at the same rate as inflation (if that) is effectively forcing them to move out over time.
If the goal is to make everyone a homeowner, then
outsized power to prevent new development at the cost of renters, young people, and the poor.
is the only truly catastrophic problem mentioned so far. Everything else you listed at least incentivizes homeownership. Sure, car-centric urban design is silly and all that, but I kind of doubt most people would prefer the space reserved for parking spaces be occupied by more housing. Green spaces, bike lanes, and larger walkable areas would probably win that vote. Vertical and mixed-use housing are tried-and-true solutions to the density problem.
I would argue that the only other “catastrophic problem” is one we haven’t mentioned yet: institutional investment. In fact, I wouldn’t be surprised if they paid for this article. They’d love to see people turn on individual homeowners, and raise property taxes to the point that only institutions can afford to pay it.
Super low property taxes, besides starving government services and causing renters to make up the difference in fees, is precisely one of the reasons why places like Vancouver have one of the worst housing crises in the world. Economists agree that profiting from the increase in land value is a kind of theft from society, called “economic rent”. (This is why a land value tax has the nickname “the perfect tax”.) That theft is at the heart of our dysfunctional housing market.
You have a lot of concern for the hypothetical possibility of increases in property taxes forcing homeowners to sell. But in reality, annual property taxes on a $3 million house isn’t even the average single months rent on a 1BR. They should be taxed properly, and that money should help renters! We desperately need public housing and co-ops. This is absolutely a class struggle, but you seem to only see the harms of the homeowner class, not renters.
The goal absolutely should not be to subsidize homeowners. That is precisely the problem! When you subsidize a group, non-members pay the cost. That means non-homeowners pay for homeowners! It is precisely this mindset, that homeowners deserve even more from society despite their incredible privilege, that is causing our housing problems. More to the point, institutional investors inevitably benefit from many of these policies, perpetuating the housing crisis.
Super low property taxes, besides starving government services and causing renters to make up the difference in fees, is precisely one of the reasons why places like Vancouver have one of the worst housing crises in the world.
In general, I agree that cities should derive a lot of their funds from property taxes. What concerns me is when the surrounding rhetoric becomes openly hostile and retaliatory, ignoring the fact that without very gradual increases, a lot of people will be displaced from their homes. Perhaps property taxes are too low, but individual homeowners cannot be both your enemy and your objective.
Economists agree that profiting from the increase in land value is a kind of theft from society, called “economic rent”.
This makes sense. But tell me, how exactly does one profit from the increase in land value of one’s primary residence without moving somewhere entirely? You don’t “profit” from selling a home for much more than you bought it and immediately buying another home that is also worth much more than it used to be. If “profit” is truly your concern, you should once again be looking at second homes, rental properties, and institutional investments.
You have a lot of concern for the hypothetical possibility of increases in property taxes forcing homeowners to sell. But in reality, annual property taxes on a $3 million house isn’t even the average single months rent on a 1BR.
This doesn’t change the fact that many (on the order of millions) of these $3 million homes were purchased for less than 10% of that by working class people. The market then ballooned in ways that are mostly outside their control. Why should their taxes balloon in a similar manner, when their salaries simply haven’t?
On the other hand, I would fully support a property tax that is proportional to the amount you paid for the property. Such a tax would push property values down, as the tax burden would increase upon sale.
We desperately need public housing and co-ops.
Yes, we do. Believe it or not, you can accomplish these goals without skyrocketing property taxes for existing homeowners.
This is absolutely a class struggle, but you seem to only see the harms of the homeowner class, not renters.
The goal absolutely should not be to subsidize homeowners.
If the goal is to effectively eliminate the renter class, then yes, making it possible for renters to become homeowners is very important. Renters simply won’t become homeowners if their tax burden could become untenable at any moment due to factors beyond their control. Also, I fail to understand what makes you think landlords wouldn’t attempt to immediately pass their increased tax burden onto their lessees.
More to the point, institutional investors inevitably benefit from many of these policies, perpetuating the housing crisis.
Institutional investments are so profitable because they can eliminate many of the redundant costs of individual homeownership. It disappoints me that you don’t see how an increase in property taxes on existing owners would play into their hands more than anybody else’s. What do you think happens when
current individual homeowners can no longer afford their tax burden,
the increased cost of homeownership prevents renters from becoming homeowners, and
institutional investors can and will continue to buy property despite these factors?
Increasing taxes at a higher rate than inflation on a homeowner who is given raises at the same rate as inflation (if that) is effectively forcing them to move out over time.
If the goal is to make everyone a homeowner, then
is the only truly catastrophic problem mentioned so far. Everything else you listed at least incentivizes homeownership. Sure, car-centric urban design is silly and all that, but I kind of doubt most people would prefer the space reserved for parking spaces be occupied by more housing. Green spaces, bike lanes, and larger walkable areas would probably win that vote. Vertical and mixed-use housing are tried-and-true solutions to the density problem.
I would argue that the only other “catastrophic problem” is one we haven’t mentioned yet: institutional investment. In fact, I wouldn’t be surprised if they paid for this article. They’d love to see people turn on individual homeowners, and raise property taxes to the point that only institutions can afford to pay it.
Super low property taxes, besides starving government services and causing renters to make up the difference in fees, is precisely one of the reasons why places like Vancouver have one of the worst housing crises in the world. Economists agree that profiting from the increase in land value is a kind of theft from society, called “economic rent”. (This is why a land value tax has the nickname “the perfect tax”.) That theft is at the heart of our dysfunctional housing market.
You have a lot of concern for the hypothetical possibility of increases in property taxes forcing homeowners to sell. But in reality, annual property taxes on a $3 million house isn’t even the average single months rent on a 1BR. They should be taxed properly, and that money should help renters! We desperately need public housing and co-ops. This is absolutely a class struggle, but you seem to only see the harms of the homeowner class, not renters.
The goal absolutely should not be to subsidize homeowners. That is precisely the problem! When you subsidize a group, non-members pay the cost. That means non-homeowners pay for homeowners! It is precisely this mindset, that homeowners deserve even more from society despite their incredible privilege, that is causing our housing problems. More to the point, institutional investors inevitably benefit from many of these policies, perpetuating the housing crisis.
In general, I agree that cities should derive a lot of their funds from property taxes. What concerns me is when the surrounding rhetoric becomes openly hostile and retaliatory, ignoring the fact that without very gradual increases, a lot of people will be displaced from their homes. Perhaps property taxes are too low, but individual homeowners cannot be both your enemy and your objective.
This makes sense. But tell me, how exactly does one profit from the increase in land value of one’s primary residence without moving somewhere entirely? You don’t “profit” from selling a home for much more than you bought it and immediately buying another home that is also worth much more than it used to be. If “profit” is truly your concern, you should once again be looking at second homes, rental properties, and institutional investments.
This doesn’t change the fact that many (on the order of millions) of these $3 million homes were purchased for less than 10% of that by working class people. The market then ballooned in ways that are mostly outside their control. Why should their taxes balloon in a similar manner, when their salaries simply haven’t?
On the other hand, I would fully support a property tax that is proportional to the amount you paid for the property. Such a tax would push property values down, as the tax burden would increase upon sale.
Yes, we do. Believe it or not, you can accomplish these goals without skyrocketing property taxes for existing homeowners.
If the goal is to effectively eliminate the renter class, then yes, making it possible for renters to become homeowners is very important. Renters simply won’t become homeowners if their tax burden could become untenable at any moment due to factors beyond their control. Also, I fail to understand what makes you think landlords wouldn’t attempt to immediately pass their increased tax burden onto their lessees.
Institutional investments are so profitable because they can eliminate many of the redundant costs of individual homeownership. It disappoints me that you don’t see how an increase in property taxes on existing owners would play into their hands more than anybody else’s. What do you think happens when