What rises in value is land. It rises as population rises; it rises as technological advances proceed; it rises as we-the-people invest in the kinds of infrastructure and services that make a community or a state or a country a good place to live.

And sometimes land’s selling price gets detached from its actual value. How? Through changes in lending practices (lower interest rates, lower down payment requirements, lending to less and less able borrowers, etc.). Through scarcity, real or induced. Through land value taxes not being sufficiently high to collect the capitalized value of the land. (That last one is true everywhere, but especially visible and troublesome in California, where in 1978 the voters stupidly and selfishly voted for Proposition 13, which caps property taxes at 1% of the assessed value, and capped assessments at the purchase price plus 2% per year, rather than keeping honest assessments as the basis for taxation.) California is the poster child for poor practice. Unfortunately, the biggest beneficiaries — its well-housed and subsidized seniors — are not the ones receiving the “come-uppance.”

You can read more about this at http://www.wealthandwant.com/ and http://lvtfan.typepad.com/. Look for “boom and bust cycle” and “Proposition 13″ among the ~900 themes at the former site.

You might appreciate Mason Gaffney’s papers, featured at http://www.schalkenbach.org/

What rises in value is land. It rises as population rises; it rises as technological advances proceed; it rises as we-the-people invest in the kinds of infrastructure and services that make a community or a state or a country a good place to live.

And sometimes land’s selling price gets detached from its actual value. How? Through changes in lending practices (lower interest rates, lower down payment requirements, lending to less and less able borrowers, etc.). Through scarcity, real or induced. Through land value taxes not being sufficiently high to collect the capitalized value of the land. (That last one is true everywhere, but especially visible and troublesome in California, where in 1978 the voters stupidly and selfishly voted for Proposition 13, which caps property taxes at 1% of the assessed value, and capped assessments at the purchase price plus 2% per year, rather than keeping honest assessments as the basis for taxation.) California is the poster child for poor practice. Unfortunately, the biggest beneficiaries — its well-housed and subsidized seniors — are not the ones receiving the “come-uppance.”

You can read more about this at http://www.wealthandwant.com/ and http://lvtfan.typepad.com/. Look for “boom and bust cycle” and “Proposition 13″ among the ~900 themes at the former site.

You might appreciate Mason Gaffney’s papers, featured at http://www.schalkenbach.org/