>That's also why when people do tend to leave the Bay Area, they go to other liberal areas like Seattle/Portland/Boulder/Asheville/Austin/Boston/NYC, even though those areas also have housing crises and the cost of living is rapidly approaching the Bay
Wow, that's true for all those cities? I might have guessed it for Boston and NYC, maybe Seattle too, not so much about the others. But don't know a lot about this area.
It's not a "crisis" in the way the Bay Area is, where there is barely any inventory even if you're a double-Googler household, 3BR homes on 1/4 acre go for $2.5M, and if you're a teacher or other non-tech job you're either living with roommates or have an hour and a half commute. However, Portland/Boulder/Denver/Austin have all seen large increases in house prices, driven largely by Californian housing wealth finding cheaper pastures.
1/4 acre is a large amount for a 3 bedroom house - where I live in the UK a typical plot size in a semi-rural area, from the 70s is about 1/10th acre, for new houses it's about half that.
The best solution to high demand is a land value tax. That applies not just to houses, but to offices, shops, parking lots, etc. This means that land owners have to use their land efficently. If parking triples in cost, so be it. If road tolling is required, c'est la vie.
The proceeds of those tax must then be pumped into the local economy - funding services and improvements, like new bridges, or metro lines, or higher wages for central services (like schools and police)
1/4 acre is pretty normal for middle-class neighborhoods in much of the US. A land tax would have to be pretty drastic to force people to knock down houses, split/combine plots, and build new houses repositioned to be more dense than they are now.
I think a better solution would be relaxing zoning/making new development easier in areas of high scarcity.
A land value tax would make it easier to convince people to do zoning differently.
It's also a feature that it would have a larger impact in areas where land value is high and less impact in areas where land value isn't high (so "most of the US" doesn't really matter).
It would also ensure users of land like wide roads (with on street parking), parking lots, etc, pay their way
The money goes to the local administration, who then can spend it on truly public places like parks, offering tax breaks to businesses they want to attract, subsidising housing, etc, which everyone benefits from.
The value of land is the opportunity cost of not putting it to its best use withing existing planning regulations/zoning.
Its is also the loss of opportunity suffered by those excluded with left uncompensated leads to a net transfer of incomes, capitalised into rental incomes and selling prices, and a misallocation of resources. Housing issues are purely a symptom of this economic injustice.
A Land Value Tax ends that net transfer, which is why the selling price of land falls to zero.
Towards zero, but would never reach zero unless the land was worthless.
If you can make an acre of land in SF generate $1m profit a year, even with a 10,000% LVT it would still be worth $10k. With a more realistic 2% LVT, it would be worth $980k.
However if your acre of land makes $15k a year in profit as a parking lot, a 2% LVT means that you'll sell it to someone who can utilise the space in a better way, rather than make a $5k loss.
That person may build a house, and pay $20k a year in tax, setting a rental value of $1700pcm. Or they may build a 5 home building and pay $4k a year in tax per home, setting a rental value on each home at $350pcm.
If they want a $36k a year profit, then those prices mean renting out a single home for $4700pcm, or 5 homes for $850pcm each.
Zoning laws vary the value of the land of course. Land zoned as 'a park' is pretty much worthless (but not valueless). Land zoned as 'single story house' is worth at least $8m an acre ($2.5m for a house on a 1/4 acre plot). Land zoned as 'multi story' may be worth say $20m an acre.
However at 2% LVT, the single story home will be paying $160k per acre per year. The multi story with 40 homes will pay $10k a year per acre per home. Far cheaper, thus able to attract more buyers.
On top of that, there's a large incentive for residents in single story homes to rezone their area to multi story -- land price increases 150%, they sell up their (current) $2.5m home for $5.5m, making a cool 3M in profit.
If you allow a 1% LVT to accrue as a charge on the value of the home, that's only paid on disposal, there's no affordability problem either. Own a $2m piece of land at age 18, each year 1% of the value gets added as a charge. Die age 108 and 80% of the land value is then taken to pay the back-charges, leaving 20% for the estate.
Proposing it as a sales tax might avoid Prop 13, but continues the problem where new buyers fund the state budget and homeowners/Baby Boomers get everything for free.
Also, schools and local services might not get funded every year, I assume the rate of sales isn't constant.
Wow, that's true for all those cities? I might have guessed it for Boston and NYC, maybe Seattle too, not so much about the others. But don't know a lot about this area.