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Re: Land value UK

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  • roy_langston
    ... The problem is that property owners are not a single individual. When someone holds their property off the market to put up prices, someone else can
    Message 1 of 46 , Dec 1, 2012
      --- In LandCafe@yahoogroups.com, David Reed <dbcreed@...> wrote:

      > A good example of the fact that some people refuse to know ie "The monopolist achieves his high return by refusing to supply demand" is the Second Reading of the Rating (Empty Properties) Bill of June 2007 in the H of C wherein Michael Gove now Secretary of State for Education, then in opposition (after a stint on Murdoch's Times) made a complete prat of himself by trying to argue against the (Labour Government's)Bill's basic premise that owners were keeping business properties empty to put up rent levels. (Quote coming up so the usual suspects who don't use quotes, because they have n't read anything, can skip over unsullied by information)" The basic premise of the Bill is that owners are deliberately keeping property empty and need to be taxed into putting it to good use.When we first debated the issue I asked what justification there was for the idea that individuals were forgoing the chance to maximise their income and the return on the capital they invested."Despite an attempt at Oxbridge humour about this "widespread economic masochism",Gove was ignored and the House went onto to enact the bill, preferring to believe the evidence of experience that property owners keep property off the market when that serves their interests.

      The problem is that property owners are not a single individual. When someone holds their property off the market to put up prices, someone else can decline to hold their property off the market and make a killing at the expense of the first fool. Property being held off the market is therefore not a phenomenon that arises in a free market. It is an artifact of a perverse regulatory and (especially) tax environment. I am not an expert on the UK's tax system, but there are many perverse tax rules that could make it more profitable to hold property vacant. Rent income may be highly taxed. Having a vacant property may incur paper losses that enable other income to be tax-favored. There are many possibilities. My experience in business and interpreting their financial statements is that things that appear not to make sense generally do make sense when you know the whole story, but the reasons they make sense are often subtle and indirect to the point of being convoluted.

      > Evidence has been given previously that even the Conservatives in the UK have realised that that fight is to get builders to build on land which they have bought with extant planning permissions when to do so in the numbers that would satisfy pent -up demand would see average house prices crash.

      But as explained above, there is very likely more to the story, something you either don't know, don't realize is relevant, or are simply not telling us -- something I am fairly certain I could discover in 10 minutes by talking with one of the builders who are holding land vacant, and his tax accountant.

      > But closer home for some would be the experience of Vancouver where house prices(av. $1.2 million for a family home) have recently bubbled worse than California pre Crash. Robert Shiller "Vancouver is San Francisco lagging a few years". All the figures appear to show the housing market as frozen (for the moment) with nobody much buying and, more importantly for this argument, a slow-down in sales and new-build starts.The market would appear to be acting as a monopoly (orthodox Georgism) and refusing to supply demand (which would crash it).

      Nope. It's the city government that has refused planning permission for adequate increased housing supply for decades, and extravagantly subsidized private land hoarding to raise the price of housing as high as possible. I had an off-the-record meeting with the policy director of the current governing party on Vancouver City Council a few years ago, and explained to him how his party could make housing more affordable while solving the city's chronic budget and traffic woes by not giving away publicly created land value to developers and speculators. The gist of his reply was, "Yes, I'm sure that would work, and I'd like to see that kind of solution in place myself, as it would make the city much more livable as well as affordable. But developers pay our [meaning the party's -- RL] bills. We wouldn't even _consider_ a policy that would hurt their bottom line."

      -- Roy Langston
    • roy_langston
      ... It is held out of use in the hope of rezoning windfalls, which permitting development and use at the current permitted density would likely scotch for
      Message 46 of 46 , Dec 1, 2012
        --- In LandCafe@yahoogroups.com, Harry Pollard <harrypollard0@...> wrote:

        > There is an enormous amount of urban land of all values which is presently held out of use at rack-rent (or higher) prices.

        It is held out of use in the hope of rezoning windfalls, which permitting development and use at the current permitted density would likely scotch for decades. As long as the long-term economic growth rate exceeds the tax rate, owning land increases the owner's net worth, so there is no reason to take a chance by permitting productive use.

        > Such holdings would become
        > available to producers and other users with adoption of full land Rent
        > collection and Rents would topple to a point where they would accurately
        > reflect the advantage provided by the surrounding population.

        Rents already reflect that advantage, so they would not topple.

        > You agree with me that present land rent is a 'monopoly rent'. I happen to
        > call it rack-rent because that seems to me to be an appropriate term.

        It's not appropriate, because what you are talking about is in fact rent.

        > Your peculiar opposition to this seems to stem from your mistaken belief that
        > with full Rent collection, rack-rent would remain. In fact, as I have stated, it would disappear.

        No, YOUR peculiar theory stems from your mistaken belief that rent is rack-rent.

        > I don't know where you got your land-value taxation ideas from, but you treat it as simply a good way to tax.

        My UIE proposal proves that claim false. LVT is essential to equal human rights.

        > The real intention of collecting Rent
        > (popularly, land-value taxing) is to produce a genuine equality of
        > conditions for all, replacing the present rigged economy which condemns the
        > less able to poverty and the more able to a lifetime of paying rack-rent.

        No, the real intention is to restore the EQUAL RIGHTS of all to life, liberty, and property in the fruits of their labor, relieving the poverty of the less able by ensuring they have free, secure access to economic opportunity, and enabling the more able to rise as high as their productive contributions will carry them by relieving them of the burden of supporting the greedy, privileged, parasitic landowning overclass in exorbitant luxury. I am much more aware of that intention than you, as your opposition to my UIE proposal shows.

        > The object of full Rent collection is to take the first step towards
        > 'Liberty and Justice for All'. Reducing this to a simple tax advocacy diminishes its importance as a genuine reform.
        > But, you probably know that.

        I do indeed.

        -- Roy Langston
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