Rents are already as high as renters can bear. If a tax is introduced, you'd expect landlord competition to drive down the landlord margins, not increase rents.
Rents are already as high as renters can bear. If a tax is introduced, you'd expect landlord competition to drive down the landlord margins, not increase rents.
And if margins are decreased, then... (what happens to new supply?)
The supply of land is inelastic. Property developers can't get more land by building more houses on it (and as a corollary, the eventual owner also do not get charged more in taxes).
They can make higher density buildings that generate more income and house more people on the same amount of land.
I don't think this is why it won't get passed on. In theory the lowest income could leave the state and higher income renters would come in.
But in reality a land value tax incentivizes higher density housing. A single house and an apartment complex pay the exact same amount of tax, while the apartment building can split it up over many occupants. Land value taxes are a very natural hands off way of encouraging the right use of land, empty lots and car parks become unaffordable in highly desirable areas while apartments become relatively very cheap.
In theory the land value tax could be set so the overall taxation is the same as before, but but the distribution is such that the people with massive blocks of land in highly desirable areas foot most of the bill. This would over time make housing cheaper over time as more housing is built to reduce the tax burden.
> a land value tax incentivizes higher density housing. A single house and an apartment complex pay the exact same amount of tax, while the apartment building can split it up over many occupants.
That would only be true if the LVT replaced the existing property tax structure, which is not what TFA is calling for.
> In theory the lowest income could leave the state and higher income renters would come in.
Why would a land tax make the state more attractive to higher income renters than where they currently live?
youd think that, but you can fit another 10 people into that studio apartment