It seems insane to tax developers to build housing, with that tax ostensibly being justified as helping "lower the cost of housing." Like, really? Taxing a good to increase its supply? Come on guys! I had no clue this was happening, but it is really wacky. If anything, we should be implementing a Georgist tax on *not building housing.*
For example, we should divide the property tax (determined by square footage/acreage of plot) by the total volume of housing. This would be a tax on parking lots and green spaces. I have this model of a perfect city as one where the city is surrounded by a giant "ring" park, like central park, but it's a ring that surrounds the entire city, and has tunnels going under it. This would solve the problem of accessibility to walkable green spaces, while also maximizing housing density. Exciting stuff!
It is insane. I really think a non-negligible portion of how stupid our housing policy is just comes from pop culture portraying developers as villains. A lot of voters really just think developer = bad.
I'm all for land value tax replacing property tax, but I unfortunately don't know of any serious action to implement it anywhere in the US.
“Affordable”, below-market-rate housing requirements are simply a bad idea that ensures that less housing gets built, and a few lucky people benefit while the community as a whole suffers.
Kudos to you for if not being fully and openly unequivocally against it at least pointing out the problems with it.
Of course it’ll probably be a cold day in hell (and a hot month in SF in September…) before your fellow San Franciscans agree with you…
If you’re not familiar, new development that set aside a certain percentage of their units as affordable housing received a 35 year partial real estate tax holiday, and a 25 year 100% tax holiday. NYC has a housing crisis, but there definitely has been a lot of new development with a percentage dedicated to affordable housing.
If the market is already distorted by real estate taxes (which may be very necessary and justifiable for common goods that are not easily handled by the free market; roads, public transport, sewage, water, electric infrastructure, etc.), then this acts as a sort of subsidy for affordable housing paid for by the city.
This is essentially a 0% interest 35 year loan to the city by the developer who fronts the extra development costs and an ongoing subsidy to the city by the developer who takes a hit on their return due to the below market units. The city pays the developer back through the tax abatement, but if that development wouldn’t have been built in the first place, there’s no actual loss in revenue. The only real costs the city might incur for this would be the slightly higher usage of public goods the real estate taxes were intended for.
It seems insane to tax developers to build housing, with that tax ostensibly being justified as helping "lower the cost of housing." Like, really? Taxing a good to increase its supply? Come on guys! I had no clue this was happening, but it is really wacky. If anything, we should be implementing a Georgist tax on *not building housing.*
For example, we should divide the property tax (determined by square footage/acreage of plot) by the total volume of housing. This would be a tax on parking lots and green spaces. I have this model of a perfect city as one where the city is surrounded by a giant "ring" park, like central park, but it's a ring that surrounds the entire city, and has tunnels going under it. This would solve the problem of accessibility to walkable green spaces, while also maximizing housing density. Exciting stuff!
It is insane. I really think a non-negligible portion of how stupid our housing policy is just comes from pop culture portraying developers as villains. A lot of voters really just think developer = bad.
I'm all for land value tax replacing property tax, but I unfortunately don't know of any serious action to implement it anywhere in the US.
“Affordable”, below-market-rate housing requirements are simply a bad idea that ensures that less housing gets built, and a few lucky people benefit while the community as a whole suffers.
Kudos to you for if not being fully and openly unequivocally against it at least pointing out the problems with it.
Of course it’ll probably be a cold day in hell (and a hot month in SF in September…) before your fellow San Franciscans agree with you…
How do you feel about the (now expired) 421a tax abatement in NYC? https://www.nyc.gov/site/hpd/services-and-information/tax-incentives-421-a.page
If you’re not familiar, new development that set aside a certain percentage of their units as affordable housing received a 35 year partial real estate tax holiday, and a 25 year 100% tax holiday. NYC has a housing crisis, but there definitely has been a lot of new development with a percentage dedicated to affordable housing.
If the market is already distorted by real estate taxes (which may be very necessary and justifiable for common goods that are not easily handled by the free market; roads, public transport, sewage, water, electric infrastructure, etc.), then this acts as a sort of subsidy for affordable housing paid for by the city.
This is essentially a 0% interest 35 year loan to the city by the developer who fronts the extra development costs and an ongoing subsidy to the city by the developer who takes a hit on their return due to the below market units. The city pays the developer back through the tax abatement, but if that development wouldn’t have been built in the first place, there’s no actual loss in revenue. The only real costs the city might incur for this would be the slightly higher usage of public goods the real estate taxes were intended for.
Sounds directionally like a pretty good policy. I'm not quite enough of a wonk to really dig into the numbers though.