this post was submitted on 08 Jan 2025
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Hey, keep it up. Getting mad about your imagined version of stuff before it even happens is pretty much peak internet.
This shit has been tried in dozens of cities worldwide, and it's never helped. Why would it work here?
This is what we call Beggaring the Question.
This is what we call stupidity. Trying the same thing and expecting different results.
It often helps. The best example is Vienna.
Vienna has decade long waitlists, you have to live in the city to get on the waitlist in the first place, AND private housing is still expensive.
The only people it works for is the people who already have a unit, and not even many of those because once you get one, you can't move if for example you have a kid and need more space.
https://policyoptions.irpp.org/magazines/march-2024/vienna-housing-lessons/
People keep using it as an example, but it has failed at this policy too.
Your own source disagrees with you:
And the conclusion is:
Which I fully agree with. As the report shows, in recent years Vienna has also failed to keep up with demand. Vienna isn't perfect, but if their model is actually followed, and supply scales with demand, then costs can be low.
Now, do one final calculation.
How much would it cost the BC government to purchase or build 40% of the residential properties to replicate what Vienna has in terms of accommodations?
Residential properties in BC have a total value of around 1.5 TRILLION dollars in 2023. 40% of that would be $600 billion.
There is no realistic way to reach even 4% social housing in BC, let alone 40%, and that's all to achieve something that as per the article I linked, isn't actually enough to keep the market in line.
There are better options than social housing for the province to spend money on if they wish to address this problem. With the amount of money they can reasonably spend, as per my original comment, it's nothing but a lottery for poor people. It's a "look, we're doing something" which doesn't actually benefit anyone who doesn't receive a unit. The only path to affordable housing for everyone is to force ALL housing prices down, and a lottery will never impact that.
I'm sick and tired of the government spending my tax dollars on a policy which only helps a minute fraction of people. I want it to help everyone.
The cost of real property to governments is almost inconsequential. Governments can often get loans against assets at below inflation, and usually well below the increases in real estate market value. There are many cases of municipalities that bought property, then changed their plans and resold that property for a profit, even when factoring in maintenance, legal fees, and borrowing costs.
What's your solution? If you have none, STFU and let the grown-ups do their work.
Land value taxes high enough to completely remove all income taxes.
Ah. I smell conservative scambait.
Well maybe you should read a little deeper then.
Removing income taxes in favor of land taxes is one of the most progressive possible taxation policies. People with more wealth own more land, and therefore get taxed more. Less land owned, less tax.
That's a frankly terrible idea, especially for lower income people.
Income taxes are bracketed based on income, with significant amount of deductions and exceptions for things like disability, having a family, retirement savings, education, etc.
Taxing land, especially rental property, means that the tax landlords pay is just passed down to the renter which makes it more difficult for the individual to then assess how much tax they have actually paid and are responsible for. If we then say the individual is not responsible for paying any of that property tax, then the government will be obligated to refund those tax payments to the individual, which means the government is losing that revenue. If the tax is not refunded, then the individual is going to be responsible for a much higher tax burden than the current system.
None of this actually creates new housing, it just creates a new opportunity for the wealthy to play their money shell game.
Viable solutions include:
Not sure if I mentioned:
Yea, you haven't actually read up on LVT. You should probably go do that before arguing against it.
I suggest reading up on why LVT can't be effectively passed to renters, it's a very important concept in why they're so good.
LVT are even more progressive than the income tax brackets, as a) poor people don't tend to own much if any land, especially valuable land and b) it prevents tax evasion by wealthy people because you cannot hide land, or even work around it by paying yourself $1 or something other financial shell-game bullshit.
The only way to avoid LVT is to not own land, which means that land is then available for other people to own. You want a mansion in a prime part of a city? You'll pay through the teeth for it. You're fine with a condo downtown, the taxes will be quite cheap.
This whole "housing shortage" thing is fake, or misleading at best. There are more bedrooms in Canada than people. The problem isn't a lack of housing, it's that the current distribution of housing is simply broken. There are far too many detached houses with 4+ bedrooms and 2 retired people living in it because the kids moved out a decade(s) ago. They were supposed to downsize, but they never did, and it's fucked up the housing market for the next generation. Land value taxes replacing income taxes effectively penalize them for not downsizing when they no longer work and don't need the space.
Yeah, they're not the enemy here, and more often than not can't afford to move either. When your retirement plan relies on having a paid-off house to either offset living costs or to have as an asset to sell when it's time to move into assisted living.
Forcing LVT on them means they will need to sell early (and likely quickly) to buy into a condo, which is now going to be FAR more valuable since they will have increased demand (similar to what happened during the pandemic when people were buying houses left and right for the space to quarantine/WFH, houses on my street that sold for $200k a few years before were going for a million+). Subsequently, the property they are selling will be far less valuable due to the tax. So now a retiree is being forced to undersell and overbuy just to avoid a hefty tax bill, pay lawyers, realtors, movers, likely have to sell a lifetime's accumulation of stuff (or abandon it) among all the other costs associated with selling a house and moving. Chances are, they will end up having to pay a mortgage or begin renting possibly decades earlier than when they planned to, eating up their retirement savings.
What do we do with those people? If we left them alone, they would eventually give up the house either when they die, or move into assisted living. It's a very short-lived problem in the long-term, and not nearly as impactful as apartment buildings with 50% occupancy because the landlords want $3k a month or people who own multiple homes as rental properties.
How will the value of the land be assessed? Property value is assessed as an estimation of the fair market value if it were to be sold today. Unless it's an empty lot, the fair market value is a homogeneous combination of the land and building(s). To get the value of the property, you would have to subtract the value of the building from that total. This is an estimate that insurers and lenders make all the time and there is little to no real accountability as to how these estimates are made. Say I have a property with a house and the whose thing is assessed at $500k. I take out insurance and they estimate that the replacement value of the house is $600k because that's what they think it would cost to build a similar house there. Does that mean the land it sits on is valued at -$100k?
Maybe instead we try to use recent empty-lot sales to assess land value based on dollars per acre. The only empty lot near me has been vacant for years because nobody has been able to get through the permitting process to build on it and has been sitting with a for-sale sign on it for as long as I can remember. Since nobody wants to buy it, does that make it worthless? If that lot is worthless and it's close to the lot I live on, does that make my land worthless? If I use that to prove that my land has no value, does that mean I pay no tax?
All that still doesn't solve housing for low-income people, though. If I had a plot of empty land big enough to build an apartment/condo building, it would be advantageous for me to build something that I could rent out for as much money as possible, and luxury units are more profitable. If I have a building with empty units, they occupy the same land as the units with tenants, who are covering the tax bill for the land the building sits on. I can then improve the empty units and rent them at a higher rate, because why would I hamstring my profits? LVT encourages me as a landowner to maximize the amount of profit I can extract from that parcel.
I am also not convinced that LVT can be used as a complete taxation system and additionally, I am not convinced that it will address the true shortage of tax revenue, which is that of the extremely wealthy and massive corporations, who extract an amount of wealth far disproportionate to the amount of land they use.