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Comment by bufordsharkley | Hacker News Reader

How does it help? By creating a competitive market in housing, it should ensure that the housing stock is full enough to create new affordable living for the person to move to.

But... does that still mean people might be taxed out of their home?

I hope it would be rare, because it is a bummer, but I am convinced that there is no sustainable system in which people wouldn't be "taxed out of their home" in some cases. However, consider that they'd still get a sizeable payout, and plenty of available options in their community.

It's the sad truth about land-- if someone is using it inefficiently (which is the case with the single-family households having trouble with property taxes), it's a market signal that the land should be developed more densely...

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This. This. This.

In both places I've lived in the Bay Area, there were vacant houses on the block. In the old town, apparently the house was owned by an old widow who is in a nursing home and who refuses to sell. In the new neighborhood, the house has fire damage. The owner apparently has several properties around the Bay, and just isn't in a hurry to do anything -- the house has been that way for five years or more.

I hear from people living in Palo Alto that their neighborhoods are dotted with vacant homes owned by overseas investors.

Meanwhile, people making $200k a year are commuting an hour each way because they can't afford to live any closer.

Market rate property taxation would provide a strong incentive for these owners to either sell or rent out their properties.

You can do (or I guess proposed to do) what Vancouver did, tax vacant properties. Foreign buyers would purchase homes and then let them sit, reducing inventory and raising prices.

http://www.cbc.ca/news/canada/british-columbia/vancouver-vac...

This is certainly a low-hanging fruit to attack, but one can get to the point where land is inefficiently used, even if it's completely occupied.

Would it not be possible to defer these taxes for people over a certain age and make it work like a lien on the house when it is sold and collected from their estate? Sure, it probably makes the income for the government less regular, but surely there could be some sort of financial instrument that could be created to smooth out these inflows, no?

Yes, some have outlined a deferement, roll-up option that would work to do this.[0]

Another option would be a Community Land Trust[1], which would take the responsibility of land ownership away, and allow residents to have more stability at the cost of not directly being responsible for land stewardship.

[0] http://kaalvtn.blogspot.co.uk/2013/01/a-poor-widow-bogey.htm...

[1] https://en.wikipedia.org/wiki/Community_land_trust

> It's the sad truth about land-- if someone is using it inefficiently (which is the case with the single-family households having trouble with property taxes), it's a market signal that the land should be developed more densely...

If the purpose of property taxes is to encourage or force efficient land use, what happens to local zoning laws? The taxes go up and the homeowner responds by trying to build, say, a 4 unit apartment where their single family dwelling was - but the city zoning does not allow it.

Now what? Where's the increased efficiency of land use?

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