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0 pointsjltsiren7d ago0 comments

The real issue seems to be the top-heavy tax system that forces local governments to rely on property taxes. A local income tax would make them more capable of building and maintaining infrastructure, but that would require lowering taxes at higher levels. (Income taxes are superior to wealth taxes in the sense that income tends to correlate better with the ability to pay tax.)

If the demand for housing is high, zoning fees can also be used to make developers pay for the infrastructure upfront. If done properly, their impact on housing costs should be minimal, as they mostly extract some of the added value created by the zoning from the landowner.

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CharlieDigital7d ago

    > If the demand for housing is high, zoning fees can also be used to make developers pay for the infrastructure upfront...

It's not that simple because these often end up as legal battles and in some cases, there are laws already on the books at the state and municipal level that would have to be changed.

The developer for sure does not want to build a school and even if they build the school, they are not going to be paying for the teachers that are going to need to support the increased student body for every decade into the future; that's on the taxpayers.

jltsirenOP7d ago

The underlying assumption is that laws will be changed when necessary. If it's not possible to do that, most issues probably can't be fixed.

More fundamentally, this is related to the principle of subsidiarity that is occasionally popular in the EU. Everything the government does should be done by the lowest level that can reasonably do it. And to enable that, local and state governments should have sufficiently wide tax bases.

CharlieDigital7d ago

Laws are voted on by the people. And if the municipal elections are scoped to current residents, they will vote to not expand in almost every case.

At the state level, we have housing laws that mandate ratios of affordable housing. Many townships faught this in court (and lost) because schools and infrastructure are capital projects. Bonds are secured today against some future tax base.

Don't forget that developers and investors are voters too (and lobbyists) who are going to vote against the municipalities.

My point: it is a nuanced situation and not as simple as "Got mine FU" or "just build more". Build where? How do you pay for it fairly?

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0 pointsjltsiren7d ago0 comments

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CharlieDigital7d ago

    > If the demand for housing is high, zoning fees can also be used to make developers pay for the infrastructure upfront...

It's not that simple because these often end up as legal battles and in some cases, there are laws already on the books at the state and municipal level that would have to be changed.

jltsirenOP7d ago

The underlying assumption is that laws will be changed when necessary. If it's not possible to do that, most issues probably can't be fixed.

CharlieDigital7d ago

Laws are voted on by the people. And if the municipal elections are scoped to current residents, they will vote to not expand in almost every case.

Don't forget that developers and investors are voters too (and lobbyists) who are going to vote against the municipalities.

My point: it is a nuanced situation and not as simple as "Got mine FU" or "just build more". Build where? How do you pay for it fairly?

1 more reply

j / k navigate · click thread line to collapse