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Shaked Koplewitz's avatar

Re Penn station, Alon gave an alternative design plan here

https://pedestrianobservations.com/2023/09/18/penn-station-3d-model/

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Ethics Gradient's avatar

I think I have an objection to Georgism that actually falls under the #1 umbrella - viz., I think you can't in principle tax the unimproved value of land.

Specifically, the maximum amount I'd be willing to bit on a piece of unimproved land is the NPV of its *as-improved* value -- as YIMBYs themselves point out, land on which you can build an apartment building is generally worth more than land you can only build an SFH on. This also means that as construction or zoning improvements occur, the more-intensive potential use of the same plot increases its (unimproved) value (and under a 100% LVT as a property owner/developer I actually see no gains, merely transaction costs at best if I undertake the improvements to its maximally-intensive use).

Essentially, because my maximum bid for the unimproved land would be epsilon less than the NPV of (Expected rents in as-improved state - market-clearing RoR - cost of capital), any value *not* allocated (to cost of capital + market-clearing RoR) is implicitly capitalized into the bid price for the unimproved land value.

In brief: I don't think you can tax land value but not tax improvements even in principle.

This would be less true under a highly idiosyncratic improvement market in which some combination of uniquely low building costs (seems extremely unlikely in general and especially under typical construction contractor arrangements) and/or uniquely high above-market rents following improvement (not characteristic of the urban apartment market, which is dominated by basically commoditized rectangular prisms where price, square footage, and location rather than improvement-unique amenities dominate price) was a big consideration, but in general I don't think that urban apartment construction is characterized by high alpha. Disneyworld is the exception rather than the rule when it comes to improvements.

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