The housing market just slid into a full-blown correction
- Thread starter OfTheCross
- Start date
School shootings, workplace shootings, and incels will skyrocket.
Eternal Tecate
Superstar
It's not that hard of a problem to solve. Land tax, central planning.
Explain this one...
Eternal Tecate
Superstar
Real estate value is mostly the land, not the building. If a piece of land increases in value for one reason or another, the government should take all of that increase in value because it's unearned income. Have appraisers assess real estate values on a periodic basis to keep it updated.
Land should belong to the country, not individuals. And if you have that tax in place, you don't need any other taxes.
Eternal Tecate
Superstar
Example:
Land’s site value is enhanced by two factors that do not reflect costs undertaken by the landlord. First is public spending on infrastructure: roads and public transportation (buses, subways and railroads), water and sewer piping, power and phone lines, and the proximity of good schools, shopping centers and libraries or cultural centers. Second is the general level of prosperity. The neighborhood where one lives and works often defines one’s status, so most people – and companies – spend their rising income on housing or office space in the most prestigious location they can afford.
The result is a kind of circular flow between public spending and rising rental value for neighborhoods. This is especially clear in the case of spending on schooling. Families pay more to live near a public school. In effect, the land’s rental charge is a payment for public services. This is why land taxes are so high in the most prestigious neighborhoods of American cities.
But in many cases the rising rental value has become the proverbial “free lunch” – income or asset valuation without any cost of production on behalf of the fortunate recipient. In London, for instance, the Jubilee Line tube extension raised property prices as easier access to public transportation made homes and offices more valuable all along the route, especially nearest to the new stations.
Economic writer Fred Harrison reports that “£3.4bn was invested in the extension of the Jubilee Line to service Canary Wharf” to enable London’s financial and insurance sector to expand. It raised the price of land by upwards of £10 billion. “Land owners contributed nothing towards the increased value that accrued to their assets.” Taxpayers bore the cost, leaving landlords with a windfall gain – one that largely eluded the tax collector.[1]
No public funding would have been needed, and no increase in fares for passengers to defray the capital expense of building the subway route. Its cost could have been financed by bonds issued against taxes to capture the ensuing “windfall gains” for the public – a land tax on the higher rental value created for sites along the route.
In fact, the owners of Canary Wharf property offered to build and pay for the Jubilee line extension themselves, at a cost of around £800m, recognizing how transportation would increase the rental value of their location. But local Members of Parliament urged the Thatcher government to include extra stations along the line, so the City of London turned down this offer of private funding. The cost was borne by taxpayers (and Tube users, in the form of higher fares). This left landlords to receive the uplift in property values – what 19th-century economists called the “unearned increment.”
This is why the classical economists urged land taxation, both to recapture the expense of public infrastructure investment and, subsequently, to reduce housing prices but not leaving this “free” rental value available to be capitalized into bank loans and paid to creditors as interest. By freeing government from having to tax labor or capital, and by paying for capital investment out of a rent tax (to provide transportation at subsidized prices) a tax on land and natural resource rent provides a double cost saving for the economy, minimizing its cost structure.
Land’s site value is enhanced by two factors that do not reflect costs undertaken by the landlord. First is public spending on infrastructure: roads and public transportation (buses, subways and railroads), water and sewer piping, power and phone lines, and the proximity of good schools, shopping centers and libraries or cultural centers. Second is the general level of prosperity. The neighborhood where one lives and works often defines one’s status, so most people – and companies – spend their rising income on housing or office space in the most prestigious location they can afford.
The result is a kind of circular flow between public spending and rising rental value for neighborhoods. This is especially clear in the case of spending on schooling. Families pay more to live near a public school. In effect, the land’s rental charge is a payment for public services. This is why land taxes are so high in the most prestigious neighborhoods of American cities.
But in many cases the rising rental value has become the proverbial “free lunch” – income or asset valuation without any cost of production on behalf of the fortunate recipient. In London, for instance, the Jubilee Line tube extension raised property prices as easier access to public transportation made homes and offices more valuable all along the route, especially nearest to the new stations.
Economic writer Fred Harrison reports that “£3.4bn was invested in the extension of the Jubilee Line to service Canary Wharf” to enable London’s financial and insurance sector to expand. It raised the price of land by upwards of £10 billion. “Land owners contributed nothing towards the increased value that accrued to their assets.” Taxpayers bore the cost, leaving landlords with a windfall gain – one that largely eluded the tax collector.[1]
No public funding would have been needed, and no increase in fares for passengers to defray the capital expense of building the subway route. Its cost could have been financed by bonds issued against taxes to capture the ensuing “windfall gains” for the public – a land tax on the higher rental value created for sites along the route.
In fact, the owners of Canary Wharf property offered to build and pay for the Jubilee line extension themselves, at a cost of around £800m, recognizing how transportation would increase the rental value of their location. But local Members of Parliament urged the Thatcher government to include extra stations along the line, so the City of London turned down this offer of private funding. The cost was borne by taxpayers (and Tube users, in the form of higher fares). This left landlords to receive the uplift in property values – what 19th-century economists called the “unearned increment.”
This is why the classical economists urged land taxation, both to recapture the expense of public infrastructure investment and, subsequently, to reduce housing prices but not leaving this “free” rental value available to be capitalized into bank loans and paid to creditors as interest. By freeing government from having to tax labor or capital, and by paying for capital investment out of a rent tax (to provide transportation at subsidized prices) a tax on land and natural resource rent provides a double cost saving for the economy, minimizing its cost structure.
ill
Superstar
Guess you don't get jokes
Young men can barely afford any houses right now while working 40 hours a week
Wild thought. Life, liberty, and the pursuit of government land leases. There are enough current issues with government taking land through eminent domain, redlining, etc and you want to give our government even more power to dictate who gets what piece of land.
Location is a value-add in real estate. If your location is more desirable because a new train line has come in then new buyers are going to look at your property with added value built in. You may not have done the work but you invested in a prime location with growth opportunities and they are paying off. The homeowner took on risk in this situation and is getting paid for that risk. The premise that only landlords made out in this scenario is wild. The taxpayers that paid for it also gained new routes of transports, new shops opening, potentially new buildings going up so more places to live, etc. Its not exactly the freebie that your article is trying to portray.
88m3
Fast Money & Foreign Objects
That's a little extreme... the biggest problems are major metropolitan areas
Interest rates will return to what was normal sooner than later
What I'm not sure of is how we will get ahold of corporate price gouging, stagnate wages and low wage and low skill jobs
GnauzBookOfRhymes
Superstar
The laws of supply/demand don't necessarily apply the same way as if we're talking about oil/gas, Some cities are very attractive/destination so new developments just get bought up by people with high incomes. And thousands of units in the nice part of town isn't going to do shyt to housing costs in working class/middle class neighborhoods. We also do a terrible job at keeping costs down for affordable housing development. In Chicago it's not uncommon for an affordable housing project to end up costing 300K+ PER UNIT.
ADevilYouKhow
Rhyme Reason
Strict Apartment Lease Only Allows Roommates Under 95 Pounds
CHICAGO—Calling the terms of the agreement unfair and excessive, local woman Beth Lebold told reporters Thursday that her strict apartment lease only allowed her to have roommates under 95 pounds. “According to my landlord, I can’t have any roommates bigger than that, no matter how clean or...
www.theonion.com
ORDER_66
The Fire Rises 2023
Strict Apartment Lease Only Allows Roommates Under 95 Pounds
CHICAGO—Calling the terms of the agreement unfair and excessive, local woman Beth Lebold told reporters Thursday that her strict apartment lease only allowed her to have roommates under 95 pounds. “According to my landlord, I can’t have any roommates bigger than that, no matter how clean or...
now they cracking down on fat people living in apartments...
well tbh the intrest rates are NOW returning to normal IE they are going up -
they were abnormally low for over a decade since the home loan bubble popped and the banks and wall street was about to collapse - they lowered the intrest rate to damn near zero ..... now weve got rising rates and this is why the long term bond market almost crashed but inflation is destroying everything...
if and when the recession ever hits the out is to drive back down interest rates to induce investment and spur growth....
It's the onion
