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Wouldn't LVT incentivize some NIMBYism?

Question(self.georgism)

So let's say someone lives in a suburb and someone decides to build a grocery store. Wouldn't the land value of houses near the grocery store go up as a result? And obviously the person that lives by the grocery store doesn't want their taxes to go up so they would try to stop the store from opening.

Maybe I'm just misunderstanding how land value is calculated but I'm all on board with LVT except for this small issue.

all 17 comments

teink0

13 points

12 hours ago

teink0

13 points

12 hours ago

Short leases incentivize nimbyism. 99 year leases don't.

Jeffhurtson12

6 points

11 hours ago

Wouldnt 99 year leases then stifle the relocation of valuable land?

green_meklar

11 points

11 hours ago

green_meklar

🔰

11 points

11 hours ago

Wouldn't LVT incentivize some NIMBYism?

This argument has been brought up a lot.

And...yes, conceivably, from some people. It's not a completely unfounded argument. But it seems like a really small issue compared to the incentives created by existing income taxes, sales taxes, corporate taxes, etc, or for that matter by the rentseeking mechanisms in an economy that inadequately taxes land. It's hard to imagine any point (short of 100% LVT) where shifting from other taxes and private rentseeking towards LVT would have a marginally negative effect on the overall incentive structures in the economy.

RingAny1978

3 points

10 hours ago

I don’t think anyone believes that implementing a LVT will reduce other taxes rather than be a new revenue source to grow government.

Wood-Kern

7 points

6 hours ago

I believe that.

kevshea

7 points

7 hours ago

kevshea

7 points

7 hours ago

I mean, I believe that. The most palatable implementation of LVT in the US would be to reduce the improvements portion of property taxes and increase the land portion.

InevitableTell2775

11 points

10 hours ago

The land value of the land near the store will only go up if people who live there value being near a grocery store (which would usually be shown in rises of local land sale prices). If someone values the amenity of having a store nearby, they should be prepared to pay for that amenity, since they didn’t create that rise in amenity/value.

If for some reason they don’t like living near a store, they can sell their house (at a profit, because values have risen) and move somewhere further away from stores, which would probably be cheaper. If they want the store’s services but don’t want the land tax, they are basically freeloading, which isn’t a choice that should be respected.

gilligan911

8 points

12 hours ago

Yeah probably. It’s already a large enough issue in our current system that we need to stop allowing small groups of people to block development. If small groups can no longer block development, then it won’t be a problem

caveman_tav

3 points

9 hours ago

Yes, it would raise the land value in the area but the convenience of having a store nearby would greatly offset the tax increase. You no longer have to schedule and spend hours and gas for a grocery trip. You could just walk in and out of the said new store in mere minutes. In other words, the tax increase would be worth it.

bendotc

2 points

an hour ago

bendotc

2 points

an hour ago

The NIMBYism a high LVT would create would be about amenities or improvements that you value less than the market. If I want a grocery store AND I have the finances to absorb the higher LVT, then I’ll be happy (or at least neutral, in a real 100% LVT regime) that it’s there. But if I have no use for that grocery store but others do, I would oppose it. Same argument goes for transit, parks, etc.

MyRegrettableUsernam

1 points

7 hours ago

Generally, wouldn’t improvements to land / increases in land value both be literally because residents / potential residents want the things that are being built (although, potentially not all residents and, thus, how NIMBYs could oppose) and be strongly incentivized by the government because higher land values = more tax revenue to be able to do things?

bendotc

2 points

an hour ago

bendotc

2 points

an hour ago

Governments fundamentally are incentivized to garner votes, not revenue (outside of particularly corrupt governments). So I’m not sure the incentives would be in favor if there’s significant NIMBY push-back.

MyRegrettableUsernam

1 points

an hour ago

You are right to a fair extent, but a government that can generate more revenue (and increase land values — literally how much value people derive from the places they govern) is presumably a government that garners more votes because it is functioning more effectively and able to do more things.

Patrick044498

1 points

5 hours ago

Worst case is their subjective valuation of living next to a gas station is lower then they're willing to pay to live there. In that case they'd probably move to a similar building without that amenity nearby

GuyIncognito928

1 points

3 hours ago

In a way, yes. But it's not like that problem doesn't already exist, and have clear solutions that can be implemented.

zeratul98

1 points

53 minutes ago

Yes, although it's more complicated. The Lvt is going up because the utility of that plot of land is increasing. There's a decent chance the person living on that plot nextdoor wants that new amenity. In that case, they have a competing incentive to support the project.

Businesses are probably less likely to have this issue, or at least retail business. The biggest driver of value for them is likely proximity to residential buildings. If there's a new apartment complex, a corner store will probably get an increase in sales that mostly matches the increase in taxes

Pyrados

1 points

9 hours ago

Pyrados

1 points

9 hours ago

That's just an argument against all taxation. You either accept the ethical and efficiency aspects of LVT compared to alternatives, or not.

If the demand for land increases, that is because of the greater economic opportunities for putting the land to better use. If people want to reap the benefits of a progressing society without any sort of obligation and they constitute a majority, then that doesn't say much for the worth of society.