Lol what would you do if just nobody happens to want to rent your unit? You have to pay an increasing tax for the rest of time? You couldn't sell it because who would want to buy it.

Not a sensible idea.

Tie it to a percentage of the land value.

So, units in areas of high land value get taxed more and more, incentivising either using the lot for something people want, or selling it to someone who will. Whereas units in areas of low land value get taxed much less, reflecting the higher difficulty in getting good value from it.

Who's assessing the land value?

Can I assess the value of your house at $5, and then tax you for not selling it to me at that price?

Bizarre.

I love comments like this. Condescending, confident, completely ignorant of extremely basic concepts relevant to the topic under discussion, like the 300 year existence of property tax assessors in every county in north america

If that's what you love then I think you have found your graceland friend.

In Australia, property valuation is a regulated profession. We have state-run land registry departments that tell the tax office what value to assume for each piece of land for tax purposes. If you disagree with the valuation, you can pay for your own private one (from a registered valuer).

Local government taxes (“shire rates”) are indirectly based on “Gross Rental Value” (that is, if the rented out the property at market value, how much would you expect to receive per year?).

There is also land tax, which is based on undeveloped property value.

Most commercial leases have the tenant pay the rates & taxes. If you own a property with 10 equally-sized shops, and one of them is empty, then you by law must pay 1/10 of the rates & taxes (and any other outgoings, like repairs). You cannot split the outgoings nine ways. This acts as a vacancy disincentive.

> Who's assessing the land value?

Presumably the local government, they already do this to calculate property tax across North America, and getting only the value of the land is easier than the value of the land plus property on top of it. It really isn't changing much in this regard.

>> Who's assessing the land value?

> Presumably the local government

Actually it's an independent agency of the provincial government:

> The Municipal Property Assessment Corporation (MPAC) administers property assessments and appeals of assessment in the province of Ontario, Canada.[2][3][4] MPAC determines the assessed value for all properties across Ontario. This is provided in the form of an Assessment Roll, which is delivered to municipalities throughout the province on the second Tuesday in December. Municipalities then take the assessment roll, and calculate property taxes for each individual property in their jurisdiction. MPAC complains that taxpayers often confuse MPAC's role as an assessment agency for taxes; MPAC responds that it only provides assessments. Municipalities set the tax rates and distribute the tax burden based on the assessed values provided by MPAC.

[…]

> Every municipality in Ontario is a member of MPAC, which is governed by a board of directors composed of taxpayer, municipal, and provincial representatives.[6]

* https://en.wikipedia.org/wiki/Municipal_Property_Assessment_...

One proposal I like for this is "cost" from the book radical markets - owners have to state a price for their property quarterly, are taxed according to that price, and must accept offers to purchase at that price.

If no one wants to buy you drop the price until they do. Not saying it’s a good policy, but it would drive down real estate speculation and lower rent.

What if you drop the price to zero and still nobody has any use for it at the moment?

How about making the tax increase each month the unit is unoccupied, but also making it proportional to the asking rent? No one has any use for it, high asking rent => high tax. No one has any use for it, very low asking rent => low tax.

That would require that nobody has any extra use for free/cheap space. It would mean that nobody needs additional storage space, nobody needs space for a studio or an office.

This would essentially only happen if you rented in a mega high crime area, which means landlords would be incentivized to do something about crime.

If nobody will buy the property for $1 then it's worthless. Gift it the local authority and then you won't have to pay the tax.

People won't buy it because it comes with a tax burden. They might buy it to redevelop it if it didn't.

That does not seem like a realistic problem for very many places. If a jurisdiction contains land with so little value that it won't support the taxes required for upkeep of the jurisdiction, then the jurisdiction could dissolve. Which is what happens to a ghost town I would imagine. That is not likely to happen to New York City.

So over time the vacancy tax is increasing and the sale price is going down. Obviously the vendor needs to sell or redevelop before the price hits zero. If they fail to do so then they lose the property. Speculation sometimes fails. What's the problem?

Good, then it will go to someone who needs a house, not another rent-seeking parasite.

Presumably the vacancy tax would be tied to the value of the property. If the property really is worthless you won’t be paying taxes on it.

> Presumably the vacancy tax would be tied to the value of the property.

> increases every month

It can't be both things at the same time.

And who's setting this land value? If it's on the market and nobody's buying then we don't know the value.

Why can’t it be both? Could have a logarithmic scale, could have it increase by a fraction of a % of $(value - currentTax) so that it increases more slowly over time.

Not saying I agree with the underlying idea, just confused about why “increases ever month” necessarily means it cannot be “tied to the value of the property” in a `calculateTax(propValue, timeEmpty)` sort of way.

Then you use a percent of asking rent

Then you need to donate the space to a community organization or pay taxes. The donation can come in yearly increments until you fill it.

If the value of the property is so low that I you can find no one to rent it at or above your costs, there is always the option to abandon it. At least in the US, you don't have obligations toward property you have abandoned.

Eventually you'd have to sell it cheap enough that someone would buy it, or, rent it cheap enough so that someone will use it preventing your tax.

It doesn't seem totally unreasonable. Is there an equivalent of adverse posession (squatters rights) for retail?

Then the unit is in a bad place and shouldn't be there. It should be demolished and turned into a park, surrounding social issues addressed, or maybe combined with an adjacent unit.

You would eventually render it to the state.

There are pros and cons to this idea.

Why would the state want it? Wouldn't they have to pay the same tax as other people?

Pay tax to whom? The state?

If the state owns the property, they lose the opportunity cost of taxes paid by a private owner. So, they're heavily incentivized to return it to private ownership as soon as possible... Or to consolidate several such properties into something that is sellable, or to repurpose the property into something people need, like more housing.

Just fill out a "No interest" form with the county.

Penalty for lying would be steep.

I don't think lack of interest would be a big problem in most areas.

Yes--there will be skirters of the tax, but would it be worth a big fine?

For every solution, there are 10 new problems created that require new solutions. It never ends. It never goes backwards. Bureaucratic parkour.

Software engineers should understand this. Imagine if it was 10x harder to delete a line than write a new one. Also, no forking and no starting over.

This would not work e.g. in my native city which lost some 12 per cent of the population since 1990. In such conditions, some properties will inevitably stay vacant for long periods of time. Fewer people, less demand for services.

It doesn't have to be completely blind, the local council could have options to waive or adjust the taxes or the law could include ways to show the landlord is trying to attract tenants by lowering the rent or something. Also most of the places this is suggested for aren't significantly shrinking.

If the price of the services go down enough, that should cause people to move to your city, because it has cheap cost of living.

Well, I am going to move back next year, and indeed the reason is a combination of "much lower real estate prices" and "I can do my work remotely most of the time". But the second condition does not apply to everyone, so the job market will always play a role. My wife, for example, will probably make much less there.

That sounds like a great way to get people to replace retail space with a more productive asset.

Rather than a sliding scale, why not something like x% of the 12 month average asking rent? If x is high enough that should be a great incentive for landlords to find and stay at the market clearing price.

Property taxes are a cost passed on to renters or potential renters, so an increasing empty-building tax proposal means increasing the price of something people don't want until the owner is forced to sell it. This is the quality of logic of tax policy advocates, and it needs to be addressed directly.

I'm all for churning unoccupied spaces, but there are better ways.

This is technically a property tax.

I don't like most property taxes.

That said, an unoccupied tax makes sence now. I would throw residential apartments, homes, into the mix.

(Single owner properties would be exempt. Realestate investment trusts would be targeted with this tax, along with foreign investors--rich people whom are not citizens whom buy our land, and let it sit.)

So long as you understand that all taxes get passed on in the gross price to the renter, and this causes bubble of inflation in the very thing you intend to make accessible.

While I don't necessarily advocate it, I'd say disqualifying empty buildings from insurance would do more to that end, as no bank or lender will take an uninsured asset as collateral on leverage/debt. The ones who do lend against that uninsured asset will impose interest rates on the debt to where it is cheaper for the owner to just rent the space.

It would be anti-inflationary as well, since it would reduce the amount of free money caused by cheap debt in the economy.

When you see empty buildings, you have to ask who benefits, and in the end, it's always the banks.

> While I don't necessarily advocate it, I'd say disqualifying empty buildings from insurance would do more to that end, as no bank or lender will take an uninsured asset as collateral on leverage/debt.

Unoccupied buildings generally require different insurance than occupied buildings, and it's often significantly more expensive. Although, apparently, not more expensive enough to balance the incentives to leave property empty.

It’s private property - the owner should be free to use it as they see fit.

Real estate is not a generated asset. Nobody made it in their shed. It was there and somebody walked up and declared that no one else but them was allowed to use it. Land is as fundamentally a common property as the air we breathe.

Maybe in your imaginary utopia but property rights and land ownership are fundamental freedoms in the West.

Where did that land come from?

Having it empty is a negative impact on the surroundings, not dissimilar to a bad smell or loud noises. It's perfectly reasonable for the city to have a say in this.

You really want to go down that path? Negative impact is pretty subjective. Maybe we should tax all the dog owners too? To offset the noise and dog poop that doesn’t get picked up?

Dog taxes are actually levied in some places, including developed countries.

https://www.iamexpat.de/lifestyle/pets-information-germany

Seattle has a dog and cat tax

$50 per year hardly accounts for externalities

But it's not nothing— across 100s of thousands of animals, that would be enough to hire some number of additional staff, bylaw enforcement officers, etc; at least something to offset the added load of complaints and other issues related to these pets.

Part of a government's job is to play a role in shaping laws and society in ways that make it nice to live in, and if (for whatever reason) the current set-up is incentivising a lot of unused land even while pricing people out of the area, then taking action against it sounds reasonable.

It might not gel with your (I imagine) rightish libertarianish beliefs, but it certainly fits with the general idea of the role of government, especially local government.

Why not just let the market take care of it? I’d support not incentivizing vacant property (via the tax code, limiting deductible losses and/or write offs on real estate) but absolutely do not believe government has a right to force a property to rent their property out. That’s tyranny.

And what wound stop the property owner from just creating a “business” that is open “by appointment only”? There would be many ways around it.

The market only achieves the idealized results in ideal situations where supply and demand can freely change with minimal costs. Real estate in cities is inherently supply limited because you can't magic more land out of nowhere and building a larger building only kind of works for retail because upper floors make for shitty retail spaces.

There are also a lot of forces pushing building owners to keep rents high, principally because building value is partially determined by the rental rates of that building. So if an owner is angling to sell or get a loan they have a strong incentive to not lower rents so long as the rents are in line with the 'market' rate because it immediately lowers the value of their property if they do, potentially driving them underwater on any loans.

> creating a “business” that is open “by appointment only”

The law could easily address this with requirements about public accessibility. It's disingenuous to pretend the law has to use the broadest, most abusable definition of any word to create loop hole counter arguments.

> principally because building value is partially determined by the rental rates of that building

I've seen this cited a number of places, but I wonder where it originates. Like, could the head could be cut off the dragon by changing the rules on this— maybe creating some kind of system where the rental value is discounted x% for each month that the rent is not actually collected by a tenant using the space for its intended purpose (no "parking" the space as pop up storage units or something).

But yeah, is it banks, lenders, appraisers? Is this an actual rule or just a rule of thumb? As it stands, it seems there's basically no mechanism to push down commercial rents ever— it's an up-only ratchet because of this rent-derived-value thing.

> It's disingenuous to pretend the law has to use the broadest, most abusable definition of any word to create loop hole counter arguments.

Indeed, and usable definitions for a non-pretend business are I expect well-established in the context of things like shopping malls, where tenants have exactly this kind of agreement with the landlord not only that they will maintain a functioning storefront during the mall's operating hours, but that all the other stores will be occupied and operating too— no mall store wants to operate surrounded by boarded up windows any more than a non-mall store does, and it's the responsibility of the management to keep all the storefronts occupied.

> Why not just let the market take care of it?

Because land is an awful example of a free-market commodity. It's not like you can set up a land factory to drive prices down (outside the Netherlands and Singapore I suppose...), and it's something everyone needs to live an even vaguely decent life.

And even worse, someone who owns land doesn't need to do a damn thing to make it increase in price; it's the businesses and people living around it that do that. So money sitting in real-estate is far less useful to society than money invested into productive businesses.

There is nothing that says the free market doesn’t work for scarce and limited resources.

You don’t have to be able to “set up a land factory” for the free market to work.

Because free market isn’t free. The reason these properties aren’t rented out is tied to some off financial/financing incentives that encourage this activity.

I find it pretty interesting that this comment would downvoted

It is a very simplistic, low-effort idea with no supporting argument. It does not take much thought to come up with reasons why society would not permit every single individual complete unrestricted domain over their property. Like, what if any of the actions you take on your property have an effect on your neighbors?

It was within the context of forcing a property owner to rent their property of be fined. Not within a context of a property owner should be able to do anything on their property.

So the idea was presented succinctly. I really don’t think I need a long explanation on why it’s an absurd idea to force someone to sell their space at a price lower than they think it’s worth.