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Because property owners are the ones who directly benefit from the value of their land increasing.

by spoonie 7y ago

option 7y ago
Please explain to me how do I benefit when the taxes I pay to live in my house go up
- spoonie 7y ago
  When those taxes pay for services and amenities that make your city more attractive and it grows you get two broad benefits: network effect, and quality of life. Network effect is largely your property value going up. Quality of life is from things like more goods and services located closer to you as density increases. If you don’t want either of those things you probably don’t want to live in a city.
  - jelliclesfarm 7y ago
    What about traffic? The more prosperous Bay Area becomes, more traffic woes, more homelessness, more demand for affordable homes and otoh, no infrastructure improvements, no new public transport system, no new schools, congestion everywhere and higher cost of living. Everything declines with high density. Medium density is better than low density. Networked public transport systems is better with medium density. More housing stock is good to reduce sprawl but the answer isn’t always high density housing and not subsidized housing. Example: senior affordable housing is good..shared housing is good..affordable micro homes is good for single working people. But affordable housing that crams a lot of working adults and children that go to public schools is not really good. Etc.
    - deleted 7y ago
      [deleted]
ltbarcly3 7y ago
Generally, given a fixed population, I think that improved transportation doesn't increase property values, but rather redistributes the value of property from areas near jobs to areas further away along the improved transportation. For example, starting in the 50's highways were built which allowed people to live outside of the city and commute in. Property values in the suburbs went from very low value farmland to hundreds of thousands of dollars per acre today. As these commuting routes became saturated property value in cities has recovered, since it is less and less possible to commute in a reasonable amount of time.
- spoonie 7y ago
  Agreed, I was mistaking thinking about land values and public transportation within an urban area, not including commuter transit to suburbs.
jelliclesfarm 7y ago
They don’t benefit until after they sell the property. They pay capital gains on that windfall. The people who buy the high value property also pay taxes. No property owner benefits from land value increasing until after they have sold said property.
- twblalock 7y ago
  > No property owner benefits from land value increasing until after they have sold said property. People take loans against their assets all the time and having valuable houses makes that a lot easier. Such loans can be used as leverage to buy more property.
  - jelliclesfarm 7y ago
    That’s speculative activity. Loans have to be repaid and have interest. It’s not free money. Home ownership doesn’t always imply assured appreciation of property. Even those with second homes have to pay property taxes and rental income is also taxable. Many people do NOT take more loans to buy a new home. Home ownership does give a sense of security that the down payment guarantees...it’s 30 years of mortgages and interest. And even the down payment is a result of hard earned or saved $$. People assume that property is a privilege. It’s debt. It’s a higher risk but highly rewarding risk.
    - twblalock 7y ago
      > It’s a higher risk but highly rewarding risk. Sounds like a benefit to me. Debt is a tool that can bring huge benefits to people who know how to use it. Most people who own homes have used debt to buy them. Almost everyone who owns more than one home has borrowed against equity in homes they already own to buy the others. The ability to do that is a clear benefit of property ownership.
      - jelliclesfarm 7y ago
        And a lot of them don’t. Debt is not a strategic play for most householders. Maybe when one is young, but most people seek stability when they have kids and as they get older. You are generalizing. I know more people who are only single home owners. Perhaps you know wealthier or younger people than I do. Also: you can’t penalize people for the benefit to get into more debt with more taxes. Then it no longer is a benefit.

Because property owners are the ones who directly benefit from the value of their land increasing.

option 7y ago

Please explain to me how do I benefit when the taxes I pay to live in my house go up

spoonie 7y ago
When those taxes pay for services and amenities that make your city more attractive and it grows you get two broad benefits: network effect, and quality of life. Network effect is largely your property value going up. Quality of life is from things like more goods and services located closer to you as density increases. If you don’t want either of those things you probably don’t want to live in a city.
- jelliclesfarm 7y ago
  What about traffic? The more prosperous Bay Area becomes, more traffic woes, more homelessness, more demand for affordable homes and otoh, no infrastructure improvements, no new public transport system, no new schools, congestion everywhere and higher cost of living. Everything declines with high density. Medium density is better than low density. Networked public transport systems is better with medium density. More housing stock is good to reduce sprawl but the answer isn’t always high density housing and not subsidized housing. Example: senior affordable housing is good..shared housing is good..affordable micro homes is good for single working people. But affordable housing that crams a lot of working adults and children that go to public schools is not really good. Etc.
  - deleted 7y ago
    [deleted]

ltbarcly3 7y ago

Generally, given a fixed population, I think that improved transportation doesn't increase property values, but rather redistributes the value of property from areas near jobs to areas further away along the improved transportation. For example, starting in the 50's highways were built which allowed people to live outside of the city and commute in. Property values in the suburbs went from very low value farmland to hundreds of thousands of dollars per acre today. As these commuting routes became saturated property value in cities has recovered, since it is less and less possible to commute in a reasonable amount of time.

spoonie 7y ago
Agreed, I was mistaking thinking about land values and public transportation within an urban area, not including commuter transit to suburbs.

jelliclesfarm 7y ago

They don’t benefit until after they sell the property. They pay capital gains on that windfall. The people who buy the high value property also pay taxes. No property owner benefits from land value increasing until after they have sold said property.

twblalock 7y ago
> No property owner benefits from land value increasing until after they have sold said property. People take loans against their assets all the time and having valuable houses makes that a lot easier. Such loans can be used as leverage to buy more property.
- jelliclesfarm 7y ago
  That’s speculative activity. Loans have to be repaid and have interest. It’s not free money. Home ownership doesn’t always imply assured appreciation of property. Even those with second homes have to pay property taxes and rental income is also taxable. Many people do NOT take more loans to buy a new home. Home ownership does give a sense of security that the down payment guarantees...it’s 30 years of mortgages and interest. And even the down payment is a result of hard earned or saved $$. People assume that property is a privilege. It’s debt. It’s a higher risk but highly rewarding risk.
  - twblalock 7y ago
    > It’s a higher risk but highly rewarding risk. Sounds like a benefit to me. Debt is a tool that can bring huge benefits to people who know how to use it. Most people who own homes have used debt to buy them. Almost everyone who owns more than one home has borrowed against equity in homes they already own to buy the others. The ability to do that is a clear benefit of property ownership.
    - jelliclesfarm 7y ago
      And a lot of them don’t. Debt is not a strategic play for most householders. Maybe when one is young, but most people seek stability when they have kids and as they get older. You are generalizing. I know more people who are only single home owners. Perhaps you know wealthier or younger people than I do. Also: you can’t penalize people for the benefit to get into more debt with more taxes. Then it no longer is a benefit.