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Comment by someone7x | Hacker News Reader

Great article, except for an unexpected reminder of how "gamedeveloper.com" just totally thrashed the history of "gamasutra.com"; the link in their own article to their own past article is broken.

Finding all my gamasutra.com bookmarks nuked one day with the rebrand still makes me salty.

Rant aside, this is what it tries to link to about 2/3 through the article:

https://www.gamedeveloper.com/design/how-i-used-eve-online-t...

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I made the wild statement oh so many years ago that if America wanted its people to own houses, it could fix the current system by implementing a land value tax that only kicks in on your second property and multiply by the number of properties you (or your business) owns in one city/county/state.

For instance, In King County, WA, property taxes are 1.1%. If you own one 1 million dollar property then that's $11,000/year you have to pay.

Set land value tax to 1.1% * (number of properties you own - 1). Say you own 2 1 million dollar properties in King County. That would be 1.1% of $2,000,000 property taxes, or $22,000/year. Plus an additional $11,000 for the first one, for $33,000/year.

Fine.

But then if you buy a third one, then it goes $33,000/year property taxes PLUS (1.1% * (number of properties you own - 1) = $22,000 * 2 = $44,000, or $77,000/year to own three 1 million dollar properties.

It would quickly and effectively destroy any rent profit available, and make holding the properties for investment purposes an exponentially untenable position.

If they rolled out this tax over a 7 year period there would be plenty of time for the market to gently deflate as conglomerates and corporations divested their investment properties.

Wouldn’t this change unduly benefit familial real estate holdings? Each property could be owned by a different family member that (in)formally agrees to pool profits from rents in order to accumulate wealth and equity, so that they can move up the value chain and diversity holdings while not necessary living in the sole home they actually own. They could also claim their single home as a primary residence while renting out the rest of the property and actually living elsewhere. LVT just seems prone to being manipulated and gamed to the benefit of rent-seekers to the detriment of those it purports to benefit, those who are currently priced out of the market but desire to own a home as a primary residence for the stability it adds over renting/leasing.

Your application of land value tax only to subsequent homes owned otherwise avoids many of the other issues I’ve seen with land value tax, however. Most naive hypothetical applications of land value tax without your caveat tend to gloss over or ignore my main concern with LVT, that it leads to poorer homeowners being priced out of their own homes by unserviceable tax liabilities, when those same poor folks might otherwise most benefit from homeownership.

Good point!

I believe that would be straining at flies while letting camels pass.

The issue isn't with groups of people each using their single exemption to own a second property while avoiding land value taxes.

The issue is single corporations using billions of dollars of land value as backing for loans to purchase houses at prices citizens can't afford in order to bilk them out of rent for the rest of their lives.

A land value tax with a single owner exemption would solve the larger problem.

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