One solution would be to have desired levels of zoning and base taxes on desired level of zoning of the plot. Each level of zoning would have a per m^2 value and is assessed for the entire neighborhood.

For example, you start with detached single family home zoning. As it is not very dense the rate will be very low so that it is affordable. Once house prices go up in value and row houses and duplexes become viable you raise the desired level of zoning so that duplexes and row houses have the minimal tax burden. Next step would be x stories of apartments. Again the tax is set so that x story apartment buildings have the smallest tax burden per unit. There would be a tax burden per unit (2 different rates for houses and apartments) for the neighborhood on which the actual zoning prices are based on.

E.g. One apartment pays 5k means zoning for 10 apartments will charge $50k. You can still build a single family home if you can afford that tax. Most won't.

This forces popular neighborhoods to provide more housing and punishes land owners that do not improve the value of the property built on top of the land.

This already happens. Look into how cities and states both in the US and around the world already value land separately from capital (or improvements) value as part of property tax.

I already have. Most of them are black boxes. For example, the county assessor will put the assessed value of a house at $2,000,000 when it was $800,000 five years ago. Where are they pulling this number from? All of this seems like speculation. Another thing to point out is that some states/localities use a mill rate. They'll set tax at x dollars per thousand of assessed value on the house. Where are they getting the x from? What's the difference between the assessed value and the purchase price and why should there be a difference?

With land, the issue is the same. Even though improvements aren't factored in to the value the same way they are with property tax, what makes one parcel land more valuable than the other? Such a value isn't determined by a linear relationship. So where would one get the number from?

Here is the last conversation I had about the topic. https://news.ycombinator.com/item?id=27032163

You can get estimates on the price of land in one of two ways:

- look at comparable empty lots that are sold. Even in big cities there are empty lots sold.

- look at the purchase price of buildings + land and subtract out the construction cost of the building

You can also combine the above, e.g. look at two similar buildings with similar construction costs built in two different places to infer the relative price of land in each.

You can get a pretty good estimate from the above techniques. OFHEO supplies such estimates.

> what makes someone's land more valuable than the other?

Like any other good, people bid on it and so a price is set. Having land allows you to build a building or store so things like zoning laws, demographics, income of people, foot traffic, nearby amenities, these all contribute to the value of land. Land in sunny Miami Beach is worth more than land sitting atop a superfund site somewhere in frozen Michigan. Downtown land in San Francisco is worth more than farm land in Iowa. The reason for this is you can make more money with land in one place than another, even if you need to invest in structure to make that income stream a reality.

To your first point: You're still getting an estimate, not a value. My question is what makes a particular plot of land in a particular area worth a particular amount of money? I mean the actual value, not a "value" determined by proxy of one's nearest neighbor. If the assessor is not pulling a number out of his hat, where is he getting the dollar amount from? As you pointed out there are empty plots of land with no owner. Where does the assessed value of empty unoccupied land come from? And what makes that assessed value the "correct" one for the purposes of LVT? (Note:assessed value is not necessarily the same as purchase price)

To your second point: You understand that land has differing value/utility to each purchaser or potential purchaser. LVT does not recognize this. It only assumes that if you have more land, you should be taxed more. The farmer would obviously suffer in comparison to the city dweller.

However, as a critique of your point, few San Franciscans make actual money off their land or real estate (landlords excluded). The fact that they *can* make money off their land, does not mean they are. To be taxed as though one were making money off of land is to use a legal fiction to justify a particular policy. It doesn't solve an inefficiency in land distribution but creates one.

Yeah, but GP thought his question was a killer retort that would end the argument in his favor, while simultaneously demonstrating brilliance to the Hacker News crowd.

Did you really have to take away all that with a pithy explanation of reality? Why not just let him have his day in the sun?

I'm here to get an answer. Not to win an imaginary argument. But I guess it takes one to know one if you think the latter is what I'm here for.