Another snippet from yesterday's meeting between Priced Out and Caroline Flint and Alison Seabeck:
I had briefly outlined why replacing other taxes with Land Value Tax would genuinely help, re-establish the balance between generations and so on. Ms Seabeck said that this was all well and good but what about people being 'forced to move away from their families, communities being uprooted' etc.
I forgot to mention that as things stand we already have this: there are a lot of young (and not- so-young) people who cannot afford to buy a house anywhere near they grew up; certainly nothing as nice as the one in which they grew up, so under current rules it is the young and not-so-young who are being 'forced' to move further away, to cheaper areas while all the Baby Boomers and pensioners stay put (and then complain that none of their children can be bothered to 'settle down', i.e. have grandchildren, or that their ungrateful children or grandchildren never visit them), and launched directly into the retort I had rehearsed:
I - much like Ms Flint or Ms Seabeck - have been round every street in my area, delivering leaflets at election time (I didn't mention for which party) and that, just like most places, there are big detached houses with big gardens; semis, small terraced houses (the ones where you can post a leaflet in one door and then lean over the fence to do the one next door); blocks with big, grand flats and blocks with much smaller flats - all within a radius of a few hundred yards.
So even if pensioners were 'forced' to downsize, they'd all be able to find something affordable within a few hundred yard radius (or certainly within a few minutes' drive, a couple of bus stops, or whatever), so they can give or sell their old house to their children and move into somewhere affordable close by, problem solved.
There wasn't much they could say to that, really.
Import the Third World
34 minutes ago
8 comments:
You may find that many baby boomers have moved around quite a bit and don't live anywhere near where they were brought up. I haven't lived in or around Dundee for 51 years and I've no family ties there, but I do have close friends here where I've lived since coming back to Scotland.
Why should I downsize to make way for a family to live here? I didn't own a house until I was 41. 25 years ago that wasn't unusual, particularly with people who moved around because of career etc.
Nowadays I enjoy the home I've maintained and spent a great deal of money improving. When I was younger I had no time to do that because I was working hard to get the money to do it.
God forbid I'd ever have to go into a home, but if I did, then my family would use the value in my property to ensure my care was of the highest standard. So they tell me. :)
But this is my home now and I've no intention of moving to some claustrophobic little box just to provide a lovely home for a family. I got this the hard way, Maybe that's why I appreciate it every day.
S: "You may find that..."
If we look hard enough, we can find just about anything we like.
"Why should I downsize to make way for a family to live here?"
You'd have a simple choice: pay the tax like a man or accept that new houses will have to be built elsewhere. And if enough people move elsewhere, then shops, bus services, GPs surgeries will close down where you are and move elsewhere as well.
"But this is my home now... I got this the hard way"
And what did it cost you 25 years ago? £10,000 maybe £20,000? What gives us the right to tell young people that they have to pay ten or twenty times that and submit to a lifetime of debt?
Yes but how much was Subrosa earning 25 years ago? Probably about a quarter to a third of what the house cost. So the value now vs the value then is irrelevant if todays 20 something earns a lot more.
Which they do. According to the average weekly earnings index earning have gone up by over 250% from 1985 to 2010 (series was discontinued in July 2010). Plus the availability of mortgages etc is infinitely larger than it was in 1985.
The biggest issue for young people not being able to afford houses in the last 10 years is entirely down to a) the blank refusal of the last Labour govt to do anything about a massive housing bubble, for its own electoral reasons, and b) the failure of govts of both hues to build sufficient houses, or allow permissions for sufficient houses.
If house prices were to be reduced down to a reasonable multiple of earnings (4) then all this issue would fade away.
S: "If house prices were to be reduced down to a reasonable multiple of earnings (4) then all this issue would fade away."
John Major, hardly a Georgist, had another good way of achieving low house prices (the multiple was more like 3)- but for how many years did this happy state of affairs last? Five or six?
And then it all kicked off again, credit bubble, land price bubble, bust, recession, just like has happened every eighteen years for the past few centuries.
There's one, and only one, easy way to fix this for good, and you have only ever come up with flimsy and superficial arguments against it.
My now retired parents would love to move back where they grew up (West Dorset). Only prices in this area have absolutely rocketed in relative terms since they left and this rise is not apparently due to increased local employment and wages. There is no real incentive for my baby boomer parents to stay put, the work that they moved for is no longer necessary and the kids have moved away (as non-homeowners) looking for work. I would say this is echoed across the country. Huge proportions of potential asset values locked up in house (land) prices is only going to hinder the movements of homeowners. This is surely a bad thing for the economy and not generally good for personal well-being. Compared to the currently situation I reckon LVT can give every generation more options on how and where they live and make those options easier to attain.
Very good point, DNAse. The lower the lump-sum cost for a plot of land with a house on it, the lower the cost to move around in the labor market. People would be able to move more easily -- and more quickly! -- from places with low opportunity for their job skills to places with better prospects. Lower land prices (and an LVT would very effectively lower them) would make the housing market much more liquid.
Also, if people no longer saw their house as a way of making easy money, or weren't worried that if they did not buy today, they wouldn't be able to afford to tomorrow, then more people would be happier to rent, which would be even better for the mobility of labour.
DNA, Snarf, B, having LVT makes owning a house more like renting (you automatically get a small bit of rental income via the CD to balance it out), and it has been observed that people who rent are more mobile (obviously). So that's advantage #7,324.
There'd be very few trapped into nequity as well (if land prices are very low, they are unlikely to fall further) and nobody would hang on to an ampty house for a day longer than required.
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