If you tax land value, but not development value, that incentivizes greatest productive use of land, and penalizes unproductive use of land.

It incentivizes multi-unit construction, as the more productive the land is, the less onerous the land taxes become. (Wheres currently, developing land normally increases the land tax.)

Increasing units per land both provides more housing, and reduces the tax/renter pass through.

It disincentivizes holding unproductive land as an investment, since unproductive land gets taxed as highly as productive land.

All these benefits probably accrue, from good economic alignment, because a land tax, instead of total property value tax, reflects that it is land, not its development, which is the finite resource.

Land is finite, yet we all absolutely need land, along with food, air, and water. (Finite in a soft way, given different land is more or less usable). We only "own" land in passing. So those holding it shouldn't be lightly excluding better uses of an absolutely necessary resource.

This would be a disaster for the ruling class. If there was any risk of such a tax reform coming to pass, they would nuke the whole country long before any such thing could happen.

How much of the "ruling class" actually get most of their power from the land they control? I get that price of property affects a lot of people, but I also think the "landlords" are a fraction of the political and economic power.

You seem to be forgetting that over here in the US we're all a bunch of "temporarily depressed millionaires", the wealthy landowners have and will continue to convince the voting public that any of the above rules would be detrimental to the not currently a millionaire class, and such rules should be prevented at all costs, less the dreams of them being rich will be permanently dashed.

It's very hard for landlords to pass on LVT completely - they are locked in (location-wise), where as renters are mobile...

Also, as other comments said, it incentivizes increased density.

the advantage of taxing land value is that you can pass on less tax for higher density which means higher density housing gets higher returns for landlords incentivizing construction.

LVT is usually meant to be paired with abolition of parking minimums and single-family zoning, so that the impact of the tax can be spread out among more people.

> this unfortunately leads to them passing on the taxes to renters

No, this is not how this works. Rent is set by demand and (very insufficient) supply.

If landlord could increase rent by $X - they would have increased it already (software in TFA speeds up the process, but doesn't set market clearing price). A simple thought experiment would be something akin "98% tax on rental income". "Pass it to renter" would imply 50x increase in rent to preserve existing income.

Bottom line: make it easier to build more housing. it doesn't have to be subsidized/affordable/below market rate[0]. Any addition of units has downward effect on rent across all range of prices.

[0] > [In Helsinki] The supply of new market rate units triggers moving chains that quickly reach middle- and low-income neighborhoods and individuals. Thus, new market-rate construction loosens the housing market in middle- and low-income areas even in the short run.

From "City-wide effects of new housing supply: Evidence from moving chains" https://ideas.repec.org/p/fer/wpaper/146.html

> software in TFA speeds up the process, but doesn't set market clearing price

This software can affect the market price beyond just accelerating the speed at which it reaches equilibrium. The software can help create an inefficient market where suppliers of housing are no longer competing against each other and instead all, together, take a 5-20% hit on "volume" for a larger increase in price that more than offsets the rate of empty units.

Similar to OPEC when OPEC was overwhelmingly dominant (before shale oil/shale gas explosion in USA/Russia).

In a competitive market without this software, each individual player would try harder to reach 0% vacancy because each marginal unit sold would be nearly pure profit, and this could drive prices lower than leaving any units empty.

> software can help create an inefficient market where ... suppliers of housing take a 5-20% hit on "volume" for a larger increase in price that more than offsets the rate of empty units.

Right, if one can get majority of the landlords to collude and government doesn't crack on collusion - this software would create such market.

Until we're in such dire situation: software is expediting price discovery, discovered prices are high because we don't build enough, we don't build enough because there's ridiculous amount of red tape, and doing anything that doesn't lead to more housing being built is spending time and effort on wrong problem.