r/georgism

Excerpts from article by investment adviser Mark Gardner:

[...] The people holding five investment properties at 2% yields in suburbs they've never visited, telling themselves they're sophisticated investors, they're not. They're policy dependents. The budget just sent them a bill that was always in the mail.

[...] Residential mortgages dominate [bank] loan books, comprising 54% to 70% of assets depending on the institution. Those mortgages are secured against a property market explicitly inflated by the policy settings the budget just started unwinding.

Australian household debt-to-income sits at 182%, among the highest in the developed world. Mortgage serviceability is at 45% of income, well above the 20-year average of 34%. Big four bad debt expenses: 0% to 0.2% for four consecutive years. That's not a destination. That's a temporary address.

Here's the specific new risk. Remove the buyer pool, no negative gearing incentive on established properties for new investors. Increase sell incentives, lock in old CGT rules before 1 July 2027 or absorb the hit.

You don't need a crash. You just need a few percent of price softness and rising arrears to push bad debts from 0.1% toward the historical average of 0.3%. On a multi-trillion dollar mortgage book.

The exquisite irony: CBA's own chief economist flagged these changes were "locked in" before budget night, and the CEO has publicly supported property tax reform. The bank most exposed to this was telling us it was coming.

I'm curious about something which, when I looked through this sub, wasn't talked about.

How would, theoretically, a Georgist country fare when sanctioned? Ranging from mild, to becoming an international pariah.

Are there any factors that could influence the country's economic performance? Would it fare better than non-Georgist ones?

Let me know!

Hi fellow Georgist. I have some question regarding UBI/citizens dividend

Is it only citizens that should receive it or also long term residents?

Should people under 18/their parents get it?

Do you think there should be some kind of working requirements?

How do we avoid that people just take the money to live as a "nomad" in less developed nations?

Is the percentage low enough to implement full georgism or do they need to cut further?

How does Georgism address businesses which are online or largely online?

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The unindoctrinated and apostates are punished with the rent. New recruits pay the high cost of mortgages. And devotees live in submission to something that requires upkeep and is not mathematically optimal.

Is this an accurate framing of Henry George on Bay Area?

Even full zoning liberalization without LVT would produce a round of construction that further enriches landowners whose parcels get upzoned, generates significant displacement pressure during the transition, and eventually equilibrates at a new higher density equilibrium, all the while without changing the underlying mechanism by which rising productivity capitalizes into land rents that are privately captured.

George would call that treating the symptom, not the problem?

I am posting this housing question in the Georgist sub because I trust y'all to understand the actual economics undergirding this. I have tried to naively google the question but found nothing. I am based in the US and what follows is within a US framework, although insights from the whole world are welcome.

A common complaint I see in discussions around upzoning is that, supposedly, if a new large multifamily home goes up, then the property tax of neighboring lots will increase. (For the sake of this discussion, let's say it's not a multi-use building that brings amenities to the neighborhood - it is literally just some apartments.) Is this an actual phenomenon? If it is real, is it a fundamental dynamic in housing or is it a particular law/code/ordinance that causes it? Finally, is it a bad thing from a Georgist perspective? From my perspective, property taxes should go up as an area becomes desirable, but a basic apartment building going up doesn't make an area more desirable. Typically the causation is the reverse - an apartment building gets built because enough people want to live there that you could rent out all the rooms you build. It's a problem for the YIMBY cause if new apartment buildings do in fact make neighboring property taxes rise without there being a corresponding rise in value/amenities for those neighboring properties.

I think this could help solve the old granny with a house, problem that many people get stuck on because only commercial properties would experience the LVT system. The LVT rate would be higher than the residential property tax rate.

It would probably also need to be separate from the zoning system so that any portion of land that business is operated on would qualify as commercial property. If a Landlord rents out a single-family home that entire lot would qualify as a commercial property.

Mixed lots seem a little bit tricky though. For example, someone who rents their basement suite or a home business. But I guess accountants already deal with that when people deduct a portion of their mortgage interest as a business expense.

I guess it would essentially just be a primary residence exemption but it seems like it would solve many of the current problems, such as empty lots, neglected buildings/slumlords, sprawl, etc.

What do you all think?

Edit to clarify* primary residences wouldn’t be exempt from taxation. They would be exempt from the LVT system meaning they would stay in a property tax system.

As the title asked, Has their been any major attempts to update the LTV calculation since they were first purposed? As it stands it only taxes the land at market rate but the market looks more and more to favor the ultra wealthy that can set the prices to what ever they want. Little to say that with AI people may not be able to work to pay market prices. I've looked around for some updates but haven't found any. I'm working on a price calculation that only taxes land but also takes into account the environmental displacement, and the cost that the collective has to pay when exclusive use is permitted. The closest I've found is the LVT = Unimproved Land Value * Tax Rate. Any help would be appreciated.