> If people value greenspace, than the land around said greenspace will have a higher value. LVT would then incentivize those land owners to maximize their value, which would obviously include not destroying or removing the greenspace.
This is where I believe LVT breaks down when faced with greedy reality.
In a perfect world, I totally agree with the above. That would be pretty awesome.
Could that ever happen in the real world of greedy corrupt politicians who never look further in time than the next election?
How do we assign monetary value to pleasant and beautiful things that provide quality of life? Like the parks and playgrounds and sports fields, etc etc. I'm sure there are studies, but the numbers are not as clear-cut and not as immediate as tax revenue this quarter, so they get ignored.
Each individual lot gets evaluated in isolation and the most profitable choice, individually, is to maximize revenue on that lot, so every lot ends up being a high rise concrete box, either offices or apartments. It would take a very brave politician to say let's look at the big picture long term, sacrifice some tax revenue today and build for a better quality of life because long term that will raise values more.
LVT is uncommon so a lot of it is argued in theory, but I suggest looking at a somewhat similar decision process happening in cities today, which relates to the homeless.
How are cities reacting to homeless? They fence off all the open green space and parks, rip out benches and bus stop roofs, eliminate all public bathrooms and so on. Making the area miserabe for everyone, destroying quality of life. Oh but it is difficult to measure quality of life, so they don't.
It would be much wiser for society as a whole to attend to the homeless and let us all have the open parks and benches and bathrooms, city life would be far more pleasant and long term also more profitable if cities can thrive instead of decay.
But that's not how politicians think or act, so I'm fairly sure it would be the same with LVT.
Well I can't speak to the notion of corrupt politicians, but it's worth noting that if it's in the interests of the landowners, then they'd likely fight to keep anything that they feel would keep their value high. And especially if they started developing/investing in their land to maximize the potential return of the land. Anecdotally, I've seen individual homeowners stir up enough support in my major Canadian city to stop city councils from starting somewhat major development projects, so I don't think that it'd be as inevitable as you're making it out to be.
It's also a mistake to say that a lot of land gets evaluated in isolation, because that's not even true with a the current property tax. You absolutely factor in the surrounding community and external factors when valuing a piece of land. Land in a downtown area is going to be inherently worth more than land on the periphery of a city due to the activity and potential of the land to generate economic activity.
To your point though, would you say that an apartment building next to a park (or even within several blocks of a park) is worth more than an apartment building with no park in proximity? I think most people would as well, therefore the apartment building with the park in proximity would have a higher value (which would extend to all land in proximity of the park), and thus the local government would be able to collect a higher tax dollar amount because of the park being there. Whereas maybe they could get a similar total amount by building another building, but why would a local government purposefully lower the amount of tax they'd collect on each plot of land? It's in the interest of the local government to maximize the value of the land within their jurisdiction to collect the highest amount of tax possible. Just like it's in the landowners interest to develop and invest in their land to get the highest return on their investment possible.
Re: homelessness, it would seem to me like a large group of people without housing would benefit from a system that incentivizes building more housing. Which LVT does. It would also encourage public spaces to be as ammenible as possible, so that the park is as appealing as possible in order to maximize the value for surrounding lots of land. At this point though we're talking second or even third order effects of LVT, which like you mentioned aren't super clear or even assured because LVT mostly remains in the theoretical. But if we have a sound theory, at this point why not try it and see what happens? Our current systems are very clearly failing us, so if we have ideas with sound reasoning, can things really get so much worse than they already are?
> It's also a mistake to say that a lot of land gets evaluated in isolation, because that's not even true with a the current property tax.
Sorry, my sentence may have been confusingly worded. I don't mean for tax computation (which certainly uses neighborhood comparables), but I mean that every lot owner will evaluate the maximum profit for their own pocket only, without any regard to greater good of the town. So every lot owner will sell to the developer who'll make a highrise building. Let "someone else" sell a lot to build a library or a tennis court! But there is no "someone else", everyone will seek to maximize personal profit which means no nice places will exist, only tightly packed concrete highrises.
> To your point though, would you say that an apartment building next to a park (or even within several blocks of a park) is worth more than an apartment building with no park in proximity?
Absolutely! But to actually sacrifice short-term tax revenue for longer-term benefit would require forward-thinking politicians. You mention being in Canada so those might exist there, but here in the US, there are none.
> homelessness, it would seem to me like a large group of people without housing would benefit from a system that incentivizes building more housing
I hesitated to mention homeless because my comment has nothing to do with the homeless issue per se. Only using it as a very real example where we can see that town governments are completely willing to ruin quality of life for everyone (fencing off parks, etc) just to save a few dollars short term. Even though it would be immensely better to spend a bit more upfront, to raise the quality of life for the whole town, which will bring in more prosperity and more property value and more tax later on.
This is where I believe LVT breaks down when faced with greedy reality.
In a perfect world, I totally agree with the above. That would be pretty awesome.
Could that ever happen in the real world of greedy corrupt politicians who never look further in time than the next election?
How do we assign monetary value to pleasant and beautiful things that provide quality of life? Like the parks and playgrounds and sports fields, etc etc. I'm sure there are studies, but the numbers are not as clear-cut and not as immediate as tax revenue this quarter, so they get ignored.
Each individual lot gets evaluated in isolation and the most profitable choice, individually, is to maximize revenue on that lot, so every lot ends up being a high rise concrete box, either offices or apartments. It would take a very brave politician to say let's look at the big picture long term, sacrifice some tax revenue today and build for a better quality of life because long term that will raise values more.
LVT is uncommon so a lot of it is argued in theory, but I suggest looking at a somewhat similar decision process happening in cities today, which relates to the homeless.
How are cities reacting to homeless? They fence off all the open green space and parks, rip out benches and bus stop roofs, eliminate all public bathrooms and so on. Making the area miserabe for everyone, destroying quality of life. Oh but it is difficult to measure quality of life, so they don't.
It would be much wiser for society as a whole to attend to the homeless and let us all have the open parks and benches and bathrooms, city life would be far more pleasant and long term also more profitable if cities can thrive instead of decay.
But that's not how politicians think or act, so I'm fairly sure it would be the same with LVT.