1 00:00:10,760 --> 00:00:14,520 Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast. 2 00:00:14,600 --> 00:00:19,200 Speaker 1: I'm Joe. Wasn't all Tracy. You know, It's like, how 3 00:00:19,280 --> 00:00:21,720 Speaker 1: is it when housing it's booming, it seems to cause 4 00:00:21,840 --> 00:00:23,639 Speaker 1: people a lot of stress, like they want to like 5 00:00:23,720 --> 00:00:27,320 Speaker 1: get in on a home, and then when housing tumbles 6 00:00:27,360 --> 00:00:30,600 Speaker 1: that also closes people stress. Maybe if you recently bought 7 00:00:30,600 --> 00:00:33,519 Speaker 1: at home or something like that. But either way, wherever 8 00:00:33,600 --> 00:00:36,240 Speaker 1: we are on the cycle, it feels like in the US, 9 00:00:36,360 --> 00:00:39,479 Speaker 1: like housing is just this like huge source of stress. 10 00:00:39,479 --> 00:00:42,159 Speaker 1: Like sometimes I go on the real estate subredbit and 11 00:00:42,200 --> 00:00:45,040 Speaker 1: it's just like all these people clearly close to like 12 00:00:45,120 --> 00:00:48,760 Speaker 1: having nervous breakdowns over the travails if either trying to 13 00:00:48,800 --> 00:00:52,360 Speaker 1: find a home to buy or sometimes even to rent. Yeah, 14 00:00:52,400 --> 00:00:55,560 Speaker 1: I mean you will have very different sources of stress 15 00:00:55,600 --> 00:00:58,200 Speaker 1: depending on whether or not you're a homeowner or whether 16 00:00:58,240 --> 00:01:01,000 Speaker 1: you're trying to become a homeowner and and source and 17 00:01:01,120 --> 00:01:04,600 Speaker 1: actual house in the current market. But yes, it seems 18 00:01:04,640 --> 00:01:07,680 Speaker 1: like an endless struggle in many ways. You know, one 19 00:01:07,720 --> 00:01:10,920 Speaker 1: thing that I just, um, I just learned about and 20 00:01:11,319 --> 00:01:14,240 Speaker 1: you know this is maybe naive on my part, but 21 00:01:14,280 --> 00:01:17,600 Speaker 1: as a new homeowner, can we talk about property taxes? 22 00:01:17,720 --> 00:01:21,520 Speaker 1: And the fact that if I, if I improve my house, 23 00:01:22,040 --> 00:01:25,520 Speaker 1: I will pay more. That's crazy. So don't just let it. 24 00:01:25,560 --> 00:01:27,720 Speaker 1: Just let it deter it, just like let the yes 25 00:01:28,000 --> 00:01:31,880 Speaker 1: come in, let the foundation crack all that stuff. I mean, 26 00:01:32,120 --> 00:01:36,800 Speaker 1: that's the incentive that I have now, although well resale value. 27 00:01:36,840 --> 00:01:39,240 Speaker 1: But yeah, anyway, there are all these things you discover 28 00:01:39,520 --> 00:01:43,000 Speaker 1: once once you actually own a property. No, only a 29 00:01:43,080 --> 00:01:45,920 Speaker 1: property is the worst curse because like you think, it's like, oh, 30 00:01:45,959 --> 00:01:47,560 Speaker 1: I finally got a house, and all these people are 31 00:01:47,560 --> 00:01:50,160 Speaker 1: competing and entering bidding wars, and then if you win, 32 00:01:50,640 --> 00:01:53,160 Speaker 1: you actually kind of lose because then you're like stuck 33 00:01:53,200 --> 00:01:56,880 Speaker 1: to this thing and you realized like how much houses? 34 00:01:57,000 --> 00:01:59,760 Speaker 1: But yeah, bottom line is like everything about real estate 35 00:02:00,160 --> 00:02:03,120 Speaker 1: ups or downs just seems to be a permanent source 36 00:02:03,160 --> 00:02:07,040 Speaker 1: of stress. And okay, like mortgage rates go up and 37 00:02:07,080 --> 00:02:09,760 Speaker 1: maybe that clols buying, but it doesn't feel like anyone 38 00:02:09,880 --> 00:02:12,040 Speaker 1: has any sort of like it doesn't feel like there's 39 00:02:12,080 --> 00:02:16,880 Speaker 1: a long term plan to address this. Like yeah, at times, 40 00:02:16,919 --> 00:02:18,840 Speaker 1: maybe things soften up a bit, but maybe if things 41 00:02:18,880 --> 00:02:21,160 Speaker 1: are softening up a bit, it's because the economy is 42 00:02:21,200 --> 00:02:23,120 Speaker 1: down and people are getting laid off, and then it 43 00:02:23,120 --> 00:02:25,800 Speaker 1: gets harder or impossible to get a mortgage or be 44 00:02:25,880 --> 00:02:29,640 Speaker 1: in a position to buy a house. Structurally, it's just 45 00:02:29,840 --> 00:02:32,760 Speaker 1: it's just it seems like a nightmare. Well, I would say, 46 00:02:32,800 --> 00:02:36,079 Speaker 1: the other big thing is it feels like no one's 47 00:02:36,120 --> 00:02:41,320 Speaker 1: decided what role housing is supposed to have in the economies. 48 00:02:41,360 --> 00:02:45,000 Speaker 1: So yes, I think most people would agree that if 49 00:02:45,000 --> 00:02:47,520 Speaker 1: you can get on the housing ladder, it's probably a 50 00:02:47,560 --> 00:02:51,160 Speaker 1: way of building wealth. But at the same time, no 51 00:02:51,200 --> 00:02:54,240 Speaker 1: one wants house prices to go up so high that 52 00:02:54,320 --> 00:02:57,280 Speaker 1: everyone starts to get priced out in the market. And 53 00:02:57,360 --> 00:03:00,000 Speaker 1: so it feels like we have yet to decide exactly 54 00:03:00,280 --> 00:03:05,720 Speaker 1: what role housing should play in in the American economy. Certainly, 55 00:03:05,840 --> 00:03:08,760 Speaker 1: why do we want houses to be this key asset 56 00:03:08,880 --> 00:03:12,440 Speaker 1: where your your ability to retire, your ability to have 57 00:03:12,520 --> 00:03:15,680 Speaker 1: some sort of like comfortable economic existence is predicated on 58 00:03:15,680 --> 00:03:17,880 Speaker 1: buying How's it like? You know, how's inclusions be like 59 00:03:17,919 --> 00:03:21,440 Speaker 1: a consumption good You're like, buy shelter and the just 60 00:03:21,480 --> 00:03:24,320 Speaker 1: the shelter component. But it has become this thing where 61 00:03:24,320 --> 00:03:27,600 Speaker 1: everyone feels like homeownership is such a key to what 62 00:03:27,639 --> 00:03:30,280 Speaker 1: we think of as you know, the American dream or whatever, 63 00:03:30,680 --> 00:03:34,399 Speaker 1: having a comfortable life that you'll like pay a fortune 64 00:03:34,800 --> 00:03:36,920 Speaker 1: just as you put it, like get even the term 65 00:03:37,000 --> 00:03:39,320 Speaker 1: the housing ladders, like we all have like climb up, 66 00:03:39,440 --> 00:03:42,040 Speaker 1: we have to grab a rung. It's also it all 67 00:03:42,080 --> 00:03:47,120 Speaker 1: seems so perverse. Well, it also immediately creates that fomo feeling, 68 00:03:47,280 --> 00:03:49,160 Speaker 1: that sense of missing out, like, oh my gosh, I 69 00:03:49,200 --> 00:03:50,800 Speaker 1: have to get on the ladder because if I don't 70 00:03:50,840 --> 00:03:53,320 Speaker 1: get on it as soon as possible, I'm gonna be 71 00:03:53,320 --> 00:03:56,040 Speaker 1: behind everyone else for the rest of my life. But yes, 72 00:03:56,120 --> 00:03:58,680 Speaker 1: this is a peculiar model. It is not the model 73 00:03:59,160 --> 00:04:02,160 Speaker 1: used by everyone in every country, by the way, and 74 00:04:02,200 --> 00:04:05,800 Speaker 1: Europe in particular is quite different in its approach to homeownership. 75 00:04:06,000 --> 00:04:08,120 Speaker 1: So it definitely seems a little more saying all right, 76 00:04:08,520 --> 00:04:12,240 Speaker 1: lots of very pessimistic intro to this episode, talking about 77 00:04:12,240 --> 00:04:15,680 Speaker 1: how much stress. But maybe there's a maybe, maybe there's 78 00:04:15,720 --> 00:04:18,159 Speaker 1: a way out, Maybe there are policy moves that could 79 00:04:18,160 --> 00:04:20,880 Speaker 1: actually address some of this. But to sort of understand 80 00:04:20,920 --> 00:04:23,240 Speaker 1: more why how's it going such a source of stress 81 00:04:23,279 --> 00:04:25,720 Speaker 1: and all of this that we're talking about, we are 82 00:04:25,720 --> 00:04:28,320 Speaker 1: going to be speaking to Darryl Fairweather. She is the 83 00:04:28,400 --> 00:04:32,400 Speaker 1: chief economist at the real estate website redfin. She might 84 00:04:32,440 --> 00:04:35,040 Speaker 1: have some ideas on how you can alleviate things or 85 00:04:35,040 --> 00:04:39,279 Speaker 1: at least understand the roots of this tension. So, Daryl, 86 00:04:39,360 --> 00:04:41,920 Speaker 1: thank you so much for coming on odd lots. Thank 87 00:04:41,960 --> 00:04:43,360 Speaker 1: you for having me. I'm so happy to be here. 88 00:04:43,520 --> 00:04:46,120 Speaker 1: We're really psyched to have you here, you know, are 89 00:04:46,160 --> 00:04:48,440 Speaker 1: we right? So people talk about there being a housing 90 00:04:48,560 --> 00:04:52,680 Speaker 1: crisis in America ornament of housing shortage? Is there a 91 00:04:52,680 --> 00:04:55,680 Speaker 1: housing crisis in the US? Like can we? Is their 92 00:04:55,800 --> 00:04:59,000 Speaker 1: data that's beyond just all the anecdotes of stress and 93 00:04:59,040 --> 00:05:01,440 Speaker 1: comments on red it and stuff like that that points 94 00:05:01,480 --> 00:05:04,800 Speaker 1: to it, like we have a serious like mismatch with 95 00:05:04,880 --> 00:05:07,080 Speaker 1: the demand to own a home or the demand to 96 00:05:07,120 --> 00:05:10,680 Speaker 1: have shelter versus what's available. Yes, we are in a 97 00:05:10,720 --> 00:05:13,400 Speaker 1: housing crisis. It's not just me saying this. Starting MAC 98 00:05:13,440 --> 00:05:16,320 Speaker 1: has estimated that we're almost formally in housing in its 99 00:05:16,360 --> 00:05:18,760 Speaker 1: short If you just look at California, it's even higher 100 00:05:18,760 --> 00:05:21,599 Speaker 1: than that. I think maybe some of the confusion is 101 00:05:21,640 --> 00:05:23,960 Speaker 1: that it's much worse in certain parts of the country 102 00:05:24,320 --> 00:05:26,120 Speaker 1: where housing crisis have really gotten up and up for 103 00:05:26,160 --> 00:05:29,000 Speaker 1: the last decade, and there are parts of the country 104 00:05:29,040 --> 00:05:31,480 Speaker 1: that have not seen that. So maybe people just don't 105 00:05:31,520 --> 00:05:33,480 Speaker 1: see it where they are. But as a whole. We're 106 00:05:33,480 --> 00:05:37,640 Speaker 1: definitely in a housing crisis. So how did we get here? 107 00:05:37,800 --> 00:05:40,320 Speaker 1: Because again, as Joe and I were talking about in 108 00:05:40,360 --> 00:05:44,360 Speaker 1: the intro, you know, housing kind of looms large over 109 00:05:44,480 --> 00:05:47,840 Speaker 1: the American psyche, and it's part of the American dream. 110 00:05:47,920 --> 00:05:50,760 Speaker 1: Everyone wants to become a homeowner at some point, so 111 00:05:50,839 --> 00:05:53,880 Speaker 1: you would think that there would be a massive industry 112 00:05:53,920 --> 00:05:57,560 Speaker 1: that is geared towards producing a good that everyone wants 113 00:05:57,600 --> 00:06:00,080 Speaker 1: and will pay a lot of money for. So it 114 00:06:00,160 --> 00:06:03,679 Speaker 1: happened we stopped investing so much in housing or really 115 00:06:03,720 --> 00:06:07,200 Speaker 1: seeing it as this savior. Before the housing crash, there 116 00:06:07,279 --> 00:06:09,880 Speaker 1: was this idea that if we just made everyone a homeowner, 117 00:06:10,200 --> 00:06:13,320 Speaker 1: then everybody could achieve that American dream and build wealth. 118 00:06:13,480 --> 00:06:16,440 Speaker 1: But making everybody everyone a homeowner came with a lot 119 00:06:16,440 --> 00:06:20,680 Speaker 1: of consequences. Not something can just magically produce produce that 120 00:06:20,760 --> 00:06:22,760 Speaker 1: kind of wealth. So there are people who were getting 121 00:06:22,760 --> 00:06:25,320 Speaker 1: homes that they actually couldn't afford, and there was a 122 00:06:25,360 --> 00:06:28,160 Speaker 1: financial system that was supporting that as well. That all 123 00:06:28,200 --> 00:06:32,680 Speaker 1: came crashing down. So from the crash onwards, we kind 124 00:06:32,680 --> 00:06:35,640 Speaker 1: of ignored housing, didn't see it as something that we 125 00:06:35,640 --> 00:06:38,839 Speaker 1: should be promoting. We built fewer homes in the twenty 126 00:06:38,880 --> 00:06:40,880 Speaker 1: tents in any decade going back all the way in 127 00:06:40,880 --> 00:06:44,560 Speaker 1: the nineteen sixties, and Millennials the biggest generation. They're entering 128 00:06:44,560 --> 00:06:46,720 Speaker 1: into home buying age. They need places to live, and 129 00:06:46,880 --> 00:06:48,839 Speaker 1: we just haven't been building for them, or really trying 130 00:06:48,880 --> 00:06:52,680 Speaker 1: to grapple with why we don't build enough homes to 131 00:06:52,800 --> 00:06:56,920 Speaker 1: meet seemingly this excess of demand. It's interesting we talked 132 00:06:56,920 --> 00:06:59,719 Speaker 1: about this with commodities all the time, like natural gas 133 00:06:59,720 --> 00:07:02,360 Speaker 1: and oil and lumber and all these about the twenty 134 00:07:02,480 --> 00:07:06,520 Speaker 1: tens being this year of under investment, and of course 135 00:07:06,600 --> 00:07:10,320 Speaker 1: housing is not a commodity strictly speaking, but there's an 136 00:07:10,360 --> 00:07:13,840 Speaker 1: interesting like parallel of this, likes is sort of like 137 00:07:14,040 --> 00:07:17,320 Speaker 1: the decade of under investment and everything, and now we're like, 138 00:07:17,520 --> 00:07:20,440 Speaker 1: now we're paying the price for it. It was a 139 00:07:20,560 --> 00:07:23,920 Speaker 1: very destructive recession and we're certainly still paying the price 140 00:07:24,000 --> 00:07:27,880 Speaker 1: for that. And we also just didn't we didn't do enough, 141 00:07:27,920 --> 00:07:30,120 Speaker 1: I think, to get out of that recession quickly enough. 142 00:07:30,240 --> 00:07:32,560 Speaker 1: We may be over corrected in this last recession and 143 00:07:32,560 --> 00:07:34,160 Speaker 1: did a whole lot, and now we're grappling with the 144 00:07:34,280 --> 00:07:36,440 Speaker 1: with the flip side, which is inflation. But I think 145 00:07:36,440 --> 00:07:39,920 Speaker 1: most economists agree that that that that the fallout from 146 00:07:39,960 --> 00:07:42,800 Speaker 1: the recession was was more harmful than it needed to be. 147 00:07:43,760 --> 00:07:46,360 Speaker 1: So I know we're going to get into things that 148 00:07:46,440 --> 00:07:50,240 Speaker 1: could be done to increase the housing stock, but just 149 00:07:50,400 --> 00:07:54,480 Speaker 1: on the current trajectory, Like, if everything continued as it 150 00:07:54,520 --> 00:07:59,240 Speaker 1: currently is, would you expect some sort of supply response 151 00:07:59,320 --> 00:08:02,320 Speaker 1: from home builders, Like would you expect them to ramp 152 00:08:02,480 --> 00:08:05,480 Speaker 1: up production enough that it would start to fix some 153 00:08:05,520 --> 00:08:08,240 Speaker 1: of the imbalance between supply and demand. I don't think 154 00:08:08,240 --> 00:08:10,480 Speaker 1: that builders on their own are going to be able 155 00:08:10,560 --> 00:08:12,840 Speaker 1: to build enough to meet demand because they only really 156 00:08:12,840 --> 00:08:17,080 Speaker 1: started getting ramped up on production when demand was exceedingly 157 00:08:17,200 --> 00:08:20,000 Speaker 1: high during the pandemic, and now that interest rates are up, 158 00:08:20,040 --> 00:08:23,040 Speaker 1: there already starting to see that decline demand and they 159 00:08:23,080 --> 00:08:25,600 Speaker 1: want to pull back. Because of the cick locality of 160 00:08:25,720 --> 00:08:29,400 Speaker 1: housing market, builders, they only really ramp up at the peak, 161 00:08:29,440 --> 00:08:30,880 Speaker 1: and then right after that they pull back, and then 162 00:08:30,880 --> 00:08:32,760 Speaker 1: they don't want to ramp up again until there's another 163 00:08:32,800 --> 00:08:35,079 Speaker 1: peak coming. So I think we do need some kind 164 00:08:35,080 --> 00:08:38,840 Speaker 1: of government intervention or more policy making to support home 165 00:08:38,840 --> 00:08:42,800 Speaker 1: building that actually meets demand. So before we get into that, though, 166 00:08:42,880 --> 00:08:46,120 Speaker 1: you know, Tracy said something important in the intro, so 167 00:08:46,200 --> 00:08:49,360 Speaker 1: you know, like Tracy talked about this in the beginning, 168 00:08:49,679 --> 00:08:54,400 Speaker 1: that you know, not all countries have the same approach 169 00:08:54,440 --> 00:08:58,680 Speaker 1: to housing where housing is so central to their conception 170 00:08:58,679 --> 00:09:02,560 Speaker 1: of economic life once per little finances. What is it like? 171 00:09:02,600 --> 00:09:05,160 Speaker 1: Where did it come from? In the US? This idea 172 00:09:05,240 --> 00:09:08,120 Speaker 1: that like housing we placed at the center of this 173 00:09:08,240 --> 00:09:10,400 Speaker 1: and that it became like the sort of home ownership 174 00:09:10,440 --> 00:09:14,000 Speaker 1: became core to the American dream. Oh, I think it 175 00:09:14,040 --> 00:09:16,360 Speaker 1: goes back to the founding of this country if you 176 00:09:16,360 --> 00:09:17,560 Speaker 1: want to go, if you want to look at the 177 00:09:17,600 --> 00:09:21,040 Speaker 1: real route, property rights are are really part of how 178 00:09:21,080 --> 00:09:24,120 Speaker 1: this country was built. I mean the the denial of 179 00:09:24,160 --> 00:09:27,240 Speaker 1: property rights the Native Americans, uh, and the idea that 180 00:09:27,320 --> 00:09:30,120 Speaker 1: an individual can own property is part of how this 181 00:09:30,200 --> 00:09:32,520 Speaker 1: country was was founded. So I think that that is 182 00:09:32,559 --> 00:09:36,920 Speaker 1: deeply embedded into this country, the idea that you own 183 00:09:36,920 --> 00:09:39,959 Speaker 1: a piece of property and it's yours and you can 184 00:09:40,000 --> 00:09:41,600 Speaker 1: build what you want on it. The government can tax 185 00:09:41,640 --> 00:09:44,240 Speaker 1: a bit, but I think America resists taxing too much 186 00:09:44,280 --> 00:10:01,319 Speaker 1: because the idea that you own the property. So why 187 00:10:01,320 --> 00:10:06,040 Speaker 1: don't we talk about potential fixes or policy solutions, but 188 00:10:06,360 --> 00:10:10,640 Speaker 1: what what could be done? Well, one thing that is 189 00:10:10,720 --> 00:10:12,800 Speaker 1: kind of straightforward at least when you say it, it's 190 00:10:12,800 --> 00:10:15,640 Speaker 1: a lot less straightforward in practice is to have a 191 00:10:15,720 --> 00:10:19,959 Speaker 1: land value tax, which means that you essentially pay rent 192 00:10:20,120 --> 00:10:22,880 Speaker 1: to everybody because you don't own the land. You didn't 193 00:10:22,920 --> 00:10:26,000 Speaker 1: create the land. Land belongs to everyone in your area, 194 00:10:26,080 --> 00:10:29,160 Speaker 1: in your country. So having a land value tax corrects 195 00:10:29,160 --> 00:10:31,160 Speaker 1: for that, and it turns the value of the home 196 00:10:31,200 --> 00:10:33,800 Speaker 1: really just more into a commodity the actual property that 197 00:10:33,800 --> 00:10:37,000 Speaker 1: sits on top of it. You're not getting some excess 198 00:10:37,040 --> 00:10:39,600 Speaker 1: of wealth just because the land value goes up. That 199 00:10:39,600 --> 00:10:42,319 Speaker 1: would mostly be taxed. Okay, so how is that difference? 200 00:10:42,360 --> 00:10:45,120 Speaker 1: So Trace, you mentioned that when after she became a homeowner, 201 00:10:45,200 --> 00:10:48,880 Speaker 1: she discovered the awful world of property taxes. So can 202 00:10:48,880 --> 00:10:51,160 Speaker 1: you talk a little bit further, like what is the 203 00:10:51,200 --> 00:10:56,120 Speaker 1: difference between a property tax and a land value tax? Yes, 204 00:10:56,400 --> 00:10:59,600 Speaker 1: so your home consists of the land, but it sits 205 00:10:59,600 --> 00:11:01,320 Speaker 1: on top of it, you own and you can do 206 00:11:01,360 --> 00:11:03,400 Speaker 1: what you want with it. And then there's also the 207 00:11:03,400 --> 00:11:05,760 Speaker 1: property that is a structure, that's it's that's it's on 208 00:11:05,800 --> 00:11:09,000 Speaker 1: top of that land that can be modified. The land 209 00:11:09,200 --> 00:11:12,400 Speaker 1: value separates that from the property tax. So a property 210 00:11:12,400 --> 00:11:15,040 Speaker 1: tax is really a combination. It taxes both the land 211 00:11:15,280 --> 00:11:16,959 Speaker 1: and the value of the property. But you can think 212 00:11:17,000 --> 00:11:20,240 Speaker 1: of it as two different parts. The reason for having 213 00:11:20,240 --> 00:11:23,040 Speaker 1: a land value tax from an economic perspective is that 214 00:11:23,559 --> 00:11:26,200 Speaker 1: land is immutable. You can't change it. If you tax it, 215 00:11:26,200 --> 00:11:28,199 Speaker 1: it's not going to change anyone's behavior. So it's a 216 00:11:28,240 --> 00:11:32,160 Speaker 1: really efficient tax to impose when just trying to raise 217 00:11:32,200 --> 00:11:35,120 Speaker 1: tax surpluses. Also, there's there's just the idea that you know, 218 00:11:35,160 --> 00:11:37,520 Speaker 1: you didn't create the land, so the value should go 219 00:11:37,520 --> 00:11:40,400 Speaker 1: to everyone. The property tax part, I think is more 220 00:11:40,520 --> 00:11:44,160 Speaker 1: motivated by having a progressive tax. That if you have 221 00:11:44,240 --> 00:11:47,040 Speaker 1: some mansion, you are a wealthy person and you can 222 00:11:47,080 --> 00:11:50,000 Speaker 1: afford to make that to pay that tax and have 223 00:11:50,080 --> 00:11:52,440 Speaker 1: it redistributed back to people who can only afford to 224 00:11:52,440 --> 00:11:55,959 Speaker 1: build a little one bedroom house or bungalow or whatever 225 00:11:56,000 --> 00:11:58,000 Speaker 1: it is on the property. So I think they have 226 00:11:58,080 --> 00:12:00,760 Speaker 1: different motivations, but they get lumped together and just the 227 00:12:00,800 --> 00:12:03,680 Speaker 1: overall property tax. You know, as Tracy put it in 228 00:12:03,720 --> 00:12:08,960 Speaker 1: her intro, she gets penalized for improving her property. So 229 00:12:09,000 --> 00:12:11,160 Speaker 1: she went a house, and if she makes the more 230 00:12:11,240 --> 00:12:15,800 Speaker 1: valuable that um I would raise her property tax. Whereas 231 00:12:16,080 --> 00:12:20,040 Speaker 1: inferior land value tax, if it's just the land portion 232 00:12:20,200 --> 00:12:24,040 Speaker 1: of the ownership, then nothing she does on the property 233 00:12:24,080 --> 00:12:26,160 Speaker 1: development side. That's why you say it's an efficient tax 234 00:12:26,480 --> 00:12:29,720 Speaker 1: because what her what what Tracy does with respect to 235 00:12:29,800 --> 00:12:33,839 Speaker 1: her house would not necessarily change the underlying vilure of 236 00:12:33,880 --> 00:12:36,400 Speaker 1: the land and a very simplistic model of the world, 237 00:12:36,440 --> 00:12:38,839 Speaker 1: that's true, But I actually want to push back on 238 00:12:38,880 --> 00:12:43,560 Speaker 1: a land value tax being perfectly efficient because land value 239 00:12:43,920 --> 00:12:46,680 Speaker 1: is affected by everything that's around it, whether it's the 240 00:12:46,760 --> 00:12:50,120 Speaker 1: quality of the air or you know, what your neighbor's 241 00:12:50,120 --> 00:12:52,120 Speaker 1: house might look like at the cast of shadow on 242 00:12:52,160 --> 00:12:54,120 Speaker 1: the land. There's like a lot of different things that 243 00:12:54,120 --> 00:12:56,600 Speaker 1: can go into land value, with how the access to 244 00:12:56,720 --> 00:12:59,720 Speaker 1: jobs for that land. So it's not immutable, but it's 245 00:12:59,800 --> 00:13:03,800 Speaker 1: less likely that what Tracy does impact the land value. 246 00:13:03,800 --> 00:13:05,360 Speaker 1: It's it's a little bit more out of our control 247 00:13:05,400 --> 00:13:08,760 Speaker 1: and it's more determined by all the factors in the community. 248 00:13:08,840 --> 00:13:11,800 Speaker 1: So it's the idea here that at the moment, we 249 00:13:11,920 --> 00:13:15,319 Speaker 1: have a property tax, which is basically a tax on 250 00:13:15,640 --> 00:13:18,760 Speaker 1: the structure on the land that you own, and so 251 00:13:18,800 --> 00:13:24,280 Speaker 1: you're basically taxing investment. So if I pour money into 252 00:13:24,640 --> 00:13:27,840 Speaker 1: you know, my house, and I make it better and 253 00:13:28,160 --> 00:13:30,559 Speaker 1: bigger or whatever, someone is going to come along and 254 00:13:30,640 --> 00:13:33,640 Speaker 1: charge me more money for that. So if you started 255 00:13:33,679 --> 00:13:38,840 Speaker 1: doing all land tax, the ideas that you're taxing land 256 00:13:38,880 --> 00:13:43,079 Speaker 1: which is in finite supply and kind of exist regardless 257 00:13:43,080 --> 00:13:45,880 Speaker 1: of whether or not you build on it. But by 258 00:13:45,960 --> 00:13:50,040 Speaker 1: doing that, you're trying to better align the incentives so 259 00:13:50,160 --> 00:13:53,640 Speaker 1: that people are going to want to build on the 260 00:13:53,760 --> 00:13:56,760 Speaker 1: land rather than just leave it alone. Is that is 261 00:13:56,800 --> 00:13:59,679 Speaker 1: that how it's supposed to work. Yes, I think that 262 00:13:59,679 --> 00:14:02,120 Speaker 1: that is how an economists would want to design our 263 00:14:02,120 --> 00:14:07,120 Speaker 1: tax system. But in in practice our taxes tend to 264 00:14:07,160 --> 00:14:11,120 Speaker 1: skew towards equity concerns over efficiency concerns. So at the 265 00:14:11,160 --> 00:14:13,400 Speaker 1: same reason, we have a capital gains tax, because the 266 00:14:13,440 --> 00:14:15,320 Speaker 1: kind of people who have a lot of capital gains 267 00:14:15,320 --> 00:14:19,440 Speaker 1: tend to be very wealthy, and from equity perspective, we 268 00:14:19,520 --> 00:14:21,840 Speaker 1: may want to distribute some of that wealth down to 269 00:14:21,840 --> 00:14:24,640 Speaker 1: people who don't have any capital gains to be taxed 270 00:14:24,640 --> 00:14:26,440 Speaker 1: in the first place. So it works the same for property. 271 00:14:26,720 --> 00:14:29,320 Speaker 1: If we're trying to just purely promote economic growth, we 272 00:14:29,360 --> 00:14:33,000 Speaker 1: would not want the structure of the home or improvements 273 00:14:33,080 --> 00:14:36,880 Speaker 1: to be taxed. So what does the land value tax 274 00:14:37,240 --> 00:14:40,040 Speaker 1: theoretically accomplished? Like we talked about, Okay, how is it 275 00:14:40,560 --> 00:14:43,000 Speaker 1: such a big source of stress if we had when 276 00:14:43,680 --> 00:14:46,520 Speaker 1: how does that fix the four million housing deficit, or 277 00:14:46,560 --> 00:14:49,680 Speaker 1: how does that get us towards that that goal of 278 00:14:49,720 --> 00:14:52,840 Speaker 1: bringing supply and demand into balance. So one is that 279 00:14:52,880 --> 00:14:56,360 Speaker 1: if you are taxing the value of the land, then 280 00:14:56,480 --> 00:14:58,840 Speaker 1: people are going to be less likely to stay in 281 00:14:58,880 --> 00:15:02,560 Speaker 1: their property beyond and like the value that they would 282 00:15:02,560 --> 00:15:04,440 Speaker 1: get out of it. So right now we have an 283 00:15:04,480 --> 00:15:07,600 Speaker 1: issue in the country of people just staying in place, 284 00:15:07,640 --> 00:15:10,720 Speaker 1: aging in place. There are you know, baby boomers who 285 00:15:11,000 --> 00:15:13,640 Speaker 1: don't have children staying in their three bedroom home or 286 00:15:13,840 --> 00:15:17,720 Speaker 1: four bedroom home when that house may be more a 287 00:15:17,800 --> 00:15:20,240 Speaker 1: value to somebody who is younger just starting a family, 288 00:15:20,600 --> 00:15:23,160 Speaker 1: But because the older person in the home is not 289 00:15:23,280 --> 00:15:27,080 Speaker 1: paying the full value of the land, they they would 290 00:15:27,200 --> 00:15:29,600 Speaker 1: rather just stay put than to move somewhere else and 291 00:15:29,640 --> 00:15:32,360 Speaker 1: potentially have to bear more of the cost, or to 292 00:15:32,440 --> 00:15:34,400 Speaker 1: rent and bear more of the cost. So there's there's 293 00:15:34,400 --> 00:15:36,400 Speaker 1: a bit of a problem in terms of allocation of 294 00:15:36,400 --> 00:15:39,240 Speaker 1: real estate. If you're not taxing the land, there's revenue 295 00:15:39,280 --> 00:15:40,920 Speaker 1: to be gained from taxing the value of the land. 296 00:15:40,960 --> 00:15:44,400 Speaker 1: You could put that money towards building more properties. If 297 00:15:44,400 --> 00:15:47,200 Speaker 1: somebody is being taxed the value of the land, they're 298 00:15:47,200 --> 00:15:49,240 Speaker 1: going to want to get more out of that land 299 00:15:49,280 --> 00:15:51,520 Speaker 1: in order to make a profit. So instead of building 300 00:15:51,520 --> 00:15:54,400 Speaker 1: a single family home, you might build a multifamily home. 301 00:15:54,400 --> 00:15:56,960 Speaker 1: Instead of having a land just sit as like a 302 00:15:56,960 --> 00:15:59,200 Speaker 1: golf course or something, you might try to have that 303 00:15:59,320 --> 00:16:01,600 Speaker 1: be commercial space will be of more value to the 304 00:16:01,760 --> 00:16:05,960 Speaker 1: entire community or to the economy. So just on that note, 305 00:16:05,960 --> 00:16:08,400 Speaker 1: I mean you mentioned the value of the land and 306 00:16:08,600 --> 00:16:12,360 Speaker 1: the potential thing that could be built there. How do 307 00:16:12,400 --> 00:16:17,240 Speaker 1: you actually measure land value for the purposes of a 308 00:16:17,360 --> 00:16:21,840 Speaker 1: land tax and would you would you incorporate like potential use, 309 00:16:21,920 --> 00:16:23,760 Speaker 1: So would you look at a site and be like, well, 310 00:16:23,840 --> 00:16:27,239 Speaker 1: you could build you know, a massive, um multi residential 311 00:16:27,280 --> 00:16:30,080 Speaker 1: building here, and so it's going to be a lot 312 00:16:30,160 --> 00:16:33,000 Speaker 1: higher than a different type of land, Like how do 313 00:16:33,040 --> 00:16:35,640 Speaker 1: you do that exactly? Because that, on the surface would 314 00:16:35,640 --> 00:16:40,360 Speaker 1: seem to be quite tricky. Potentially, Yes, it's quite tricky, 315 00:16:40,400 --> 00:16:42,840 Speaker 1: And I think that is um is lost a bit 316 00:16:42,880 --> 00:16:44,800 Speaker 1: when we talked about land value tax, because in theory 317 00:16:44,840 --> 00:16:46,840 Speaker 1: it seems great, like, oh, just do a land value 318 00:16:46,840 --> 00:16:49,440 Speaker 1: tax and everything will be efficient. But I think actually 319 00:16:49,440 --> 00:16:52,680 Speaker 1: assessing the land value tax and of itself would have 320 00:16:52,680 --> 00:16:56,200 Speaker 1: would necessitate au bureaucracy of appraisers who determine what the 321 00:16:56,280 --> 00:16:59,960 Speaker 1: value is in any time you're doing an appraisal. I mean, 322 00:17:00,080 --> 00:17:02,960 Speaker 1: it's basically an algorithm that might determine the value of 323 00:17:02,960 --> 00:17:06,960 Speaker 1: the land, and there's always algorithmic bias. So one issue 324 00:17:07,240 --> 00:17:10,640 Speaker 1: with the current property tax current property taxes in America 325 00:17:10,760 --> 00:17:13,760 Speaker 1: is that black people sometimes are paying more property at 326 00:17:13,840 --> 00:17:17,200 Speaker 1: tax than white people because white homeowners are more likely 327 00:17:17,320 --> 00:17:21,520 Speaker 1: to uh to debate what the actual appraisal is, go 328 00:17:21,680 --> 00:17:25,000 Speaker 1: fight that and try to get appraisal that gets them 329 00:17:25,160 --> 00:17:28,000 Speaker 1: a lower tax burden. So there's room for this kind 330 00:17:28,000 --> 00:17:30,040 Speaker 1: of bias to crop up just in terms of who 331 00:17:30,160 --> 00:17:33,000 Speaker 1: is pushing back on what the appraisal might be or 332 00:17:33,040 --> 00:17:35,359 Speaker 1: what the appraiser is saying is a valuable land. They 333 00:17:35,440 --> 00:17:37,399 Speaker 1: might introduce their own bias if part of that is 334 00:17:37,440 --> 00:17:41,440 Speaker 1: a human error or algorithmic This interesting. I hadn't realized 335 00:17:41,480 --> 00:17:44,120 Speaker 1: that about, but it makes total sense about this sort 336 00:17:44,160 --> 00:17:48,520 Speaker 1: of asymmetry or inequality of who has the resources to 337 00:17:48,760 --> 00:17:52,200 Speaker 1: fight their appraisal. Those same issues would they would theoretically 338 00:17:52,880 --> 00:17:56,200 Speaker 1: arise in either one either a property tax or land 339 00:17:56,480 --> 00:18:00,080 Speaker 1: value tax, or these issues of subjective human judgment, and 340 00:18:00,520 --> 00:18:03,000 Speaker 1: or is there a way because you don't have to 341 00:18:03,240 --> 00:18:06,240 Speaker 1: gauge the actual value of the structure, is there a 342 00:18:06,280 --> 00:18:09,400 Speaker 1: way to make a land value to act somehow more 343 00:18:09,440 --> 00:18:13,720 Speaker 1: equitable and less less able to be gained. I think 344 00:18:13,720 --> 00:18:15,639 Speaker 1: we have to look at look at it on whole. 345 00:18:15,760 --> 00:18:17,960 Speaker 1: Having a land value tax in the first place, I 346 00:18:17,960 --> 00:18:21,800 Speaker 1: think would promote equity because it's it's taxes that would 347 00:18:21,800 --> 00:18:24,280 Speaker 1: be collected more efficiently and could be distributed back to 348 00:18:24,320 --> 00:18:28,120 Speaker 1: a community and possibly help people who are lower income 349 00:18:28,400 --> 00:18:32,239 Speaker 1: or have socioeconomic disadvantages. But it's not going to be 350 00:18:32,240 --> 00:18:35,120 Speaker 1: perfect in terms of collecting that money. It's not perfectly efficient. 351 00:18:35,200 --> 00:18:36,359 Speaker 1: So I think you just have to look at it 352 00:18:36,400 --> 00:18:39,080 Speaker 1: from both sides and and make it a termination. As 353 00:18:39,080 --> 00:18:41,040 Speaker 1: to whether it would be good for society as a whole, 354 00:18:41,160 --> 00:18:43,400 Speaker 1: I think it would be, but I think we would 355 00:18:43,400 --> 00:18:45,680 Speaker 1: have to really have a lot of transparency and how 356 00:18:45,720 --> 00:18:50,520 Speaker 1: appraisals are made and make it easy for anybody to 357 00:18:50,520 --> 00:18:52,640 Speaker 1: to fight an appraisal that they feel like they've been wronged. 358 00:18:53,359 --> 00:18:55,119 Speaker 1: There are ways, I think, through the court system to 359 00:18:55,200 --> 00:18:57,199 Speaker 1: make it fair or make it fair as long as 360 00:18:57,240 --> 00:19:01,879 Speaker 1: we're paying attention. So land taxes do already exist in 361 00:19:02,040 --> 00:19:05,000 Speaker 1: other parts of the world. Can you talk more about 362 00:19:05,040 --> 00:19:10,480 Speaker 1: those existing systems and what impact it's had on house prices, um, 363 00:19:10,520 --> 00:19:14,439 Speaker 1: And I guess society as a whole. So one example 364 00:19:14,480 --> 00:19:16,920 Speaker 1: that comes to mind is Israel. It actually they call 365 00:19:17,000 --> 00:19:19,439 Speaker 1: it a hundred year lease, so you lease land from 366 00:19:19,480 --> 00:19:21,400 Speaker 1: the government. But it's effectively the same as the land 367 00:19:21,400 --> 00:19:24,160 Speaker 1: tax because you're paying this money monthly to the government 368 00:19:24,400 --> 00:19:27,720 Speaker 1: and just you have to pay it regardless of what 369 00:19:27,840 --> 00:19:29,280 Speaker 1: the size of the property is. You can still do 370 00:19:29,320 --> 00:19:31,639 Speaker 1: whatever you want on the property. UM. So it works 371 00:19:31,680 --> 00:19:34,160 Speaker 1: in in effect the same as the land value tax. 372 00:19:34,720 --> 00:19:37,199 Speaker 1: I'm not actually I should look a little bit more 373 00:19:37,200 --> 00:19:40,000 Speaker 1: into housing affordability. In Israel, they have their own land 374 00:19:40,040 --> 00:19:43,919 Speaker 1: issues because a lot of the country is desert, and 375 00:19:43,960 --> 00:19:45,880 Speaker 1: there are other land issues there that I won't even 376 00:19:45,880 --> 00:19:49,000 Speaker 1: get into, but that is one country that comes to mind. Um. 377 00:19:49,080 --> 00:19:54,480 Speaker 1: But yeah, it's interesting though, And I think like Singapore 378 00:19:54,680 --> 00:19:58,439 Speaker 1: also has the has this system where a lot of 379 00:19:58,480 --> 00:20:02,080 Speaker 1: people don't actually technically own their property, but they're in 380 00:20:02,119 --> 00:20:05,879 Speaker 1: these like ultra long term leases. But I guess like 381 00:20:05,920 --> 00:20:08,320 Speaker 1: one of the implications and you sort of hinted at 382 00:20:08,359 --> 00:20:11,560 Speaker 1: it in the very beginning, which is it. It's sort 383 00:20:11,560 --> 00:20:14,719 Speaker 1: of muddies our concept of property ownership a little bit. 384 00:20:14,760 --> 00:20:17,879 Speaker 1: If you're always paying, whether it's a monthly or a 385 00:20:17,960 --> 00:20:22,800 Speaker 1: yearly land value tax, then to some extent implicitly like 386 00:20:23,040 --> 00:20:25,520 Speaker 1: you're always sort of renting your land, and I think 387 00:20:25,560 --> 00:20:27,320 Speaker 1: you even use the term rent, but it's sort of 388 00:20:27,440 --> 00:20:30,639 Speaker 1: just introduces this idea that like everyone is kind of 389 00:20:31,040 --> 00:20:34,720 Speaker 1: a renter or to some extent in this framework. Yeah, 390 00:20:34,760 --> 00:20:38,480 Speaker 1: I think that's an ideological hurdle when it comes to 391 00:20:38,560 --> 00:20:41,440 Speaker 1: land value taxes. And in the book Gone with the Wind, 392 00:20:41,480 --> 00:20:44,920 Speaker 1: Scarlett O'Hare's dad is always railing about property taxes, and 393 00:20:44,960 --> 00:20:47,199 Speaker 1: I has always found it really ironic that like this 394 00:20:47,280 --> 00:20:51,400 Speaker 1: character that owns people is mad that he doesn't pay 395 00:20:51,440 --> 00:20:54,200 Speaker 1: for this land that he thinks he owns. Is entiled 396 00:20:54,240 --> 00:20:56,879 Speaker 1: to anyway. I think another side, I think there's like 397 00:20:56,880 --> 00:21:00,600 Speaker 1: a lot of ideological stuff and whether somebody can actually 398 00:21:00,600 --> 00:21:04,480 Speaker 1: own land or not. Yeah, So just on this note, 399 00:21:04,480 --> 00:21:07,000 Speaker 1: I mean, so two countries that spring to mind for 400 00:21:07,040 --> 00:21:10,359 Speaker 1: me that have this sort of land tax system or 401 00:21:11,320 --> 00:21:14,600 Speaker 1: a rental agreement where you're effectively renting the land from 402 00:21:14,640 --> 00:21:19,199 Speaker 1: the government for long periods of time, Mozambique and China, 403 00:21:19,400 --> 00:21:22,160 Speaker 1: And I mean, I don't know why those two spring 404 00:21:22,200 --> 00:21:24,880 Speaker 1: to mind other than I've spent time in those two countries, 405 00:21:24,960 --> 00:21:28,719 Speaker 1: but like both of those were a legacy of the 406 00:21:28,760 --> 00:21:32,639 Speaker 1: communist government in the respective countries. So I'm trying to 407 00:21:32,680 --> 00:21:36,719 Speaker 1: think how to rephrase this. But what's the likelihood of 408 00:21:36,720 --> 00:21:40,840 Speaker 1: a land tax getting enacted in a place like the US, 409 00:21:40,840 --> 00:21:45,560 Speaker 1: where people really associate property rights with freedom and you know, 410 00:21:45,600 --> 00:21:48,840 Speaker 1: if I buy land, I own it, and I shouldn't 411 00:21:48,880 --> 00:21:51,600 Speaker 1: have to pay a continuous stream of taxes that looks 412 00:21:51,640 --> 00:21:54,879 Speaker 1: a lot like rent to the US government. Well, we 413 00:21:54,920 --> 00:21:58,240 Speaker 1: already have the land value tax embedded within the property tax, 414 00:21:58,280 --> 00:21:59,920 Speaker 1: so I think we already have in some of the 415 00:22:00,119 --> 00:22:02,760 Speaker 1: just I think the question is how high could it 416 00:22:02,880 --> 00:22:06,280 Speaker 1: go where people still feel like they own their land, 417 00:22:06,320 --> 00:22:08,720 Speaker 1: like if it was you know, right, Like I think 418 00:22:08,760 --> 00:22:12,080 Speaker 1: most property taxes are around one to three percent, maybe 419 00:22:12,119 --> 00:22:14,480 Speaker 1: higher in some places, so that's not a huge amount 420 00:22:14,480 --> 00:22:17,639 Speaker 1: you're paying every single every single year. But if that 421 00:22:17,680 --> 00:22:20,399 Speaker 1: creeps up to say ten percent, maybe people won't feel 422 00:22:20,440 --> 00:22:22,960 Speaker 1: like they truly are owning the land. And also a 423 00:22:23,040 --> 00:22:26,360 Speaker 1: cut into the wealth the equity that they gain. One 424 00:22:26,400 --> 00:22:29,359 Speaker 1: of the reasons that home prices go up so much 425 00:22:29,640 --> 00:22:33,600 Speaker 1: is because people aren't actually paying for that value of 426 00:22:33,640 --> 00:22:36,720 Speaker 1: the land. It's to accumulate instead of going back into 427 00:22:36,720 --> 00:22:39,480 Speaker 1: the government or back into the public coffer. If you 428 00:22:39,560 --> 00:22:41,320 Speaker 1: are extracting some of the wealth and putting into the 429 00:22:41,359 --> 00:22:44,879 Speaker 1: public coffer, then people won't have their house as an 430 00:22:44,920 --> 00:22:48,160 Speaker 1: asset anymore, and people might not like that. In America, 431 00:22:48,440 --> 00:22:50,760 Speaker 1: it's interesting, okay, like to this point that the land 432 00:22:50,800 --> 00:22:53,600 Speaker 1: value tax is to some extent embedded in the existing 433 00:22:53,640 --> 00:22:56,840 Speaker 1: property tax. And I'm thinking about like the difference between 434 00:22:57,400 --> 00:23:01,800 Speaker 1: California and Texas and califor manya, And I forget what 435 00:23:01,920 --> 00:23:05,000 Speaker 1: the law is, but it seems like really hard to 436 00:23:05,280 --> 00:23:08,520 Speaker 1: raise property taxes on some people. And what's the effort. 437 00:23:08,560 --> 00:23:11,320 Speaker 1: What's the the law that like makes it like super 438 00:23:11,600 --> 00:23:15,919 Speaker 1: like people get like these really cheap property tax assessments 439 00:23:15,920 --> 00:23:20,400 Speaker 1: in many cases proper thirteen yeah, Whereas in Texas property 440 00:23:20,440 --> 00:23:23,160 Speaker 1: taxes are really high. In fact, there's no state income taxes. 441 00:23:23,200 --> 00:23:26,440 Speaker 1: So the primary revenue generator, or one of the primary 442 00:23:26,960 --> 00:23:31,080 Speaker 1: revenue generators for cities and uh towns is the property tax. 443 00:23:31,640 --> 00:23:34,439 Speaker 1: And Texas is having a housing boom right now, and 444 00:23:34,600 --> 00:23:37,720 Speaker 1: home prices like in Austin, and some cities are sky high. 445 00:23:37,760 --> 00:23:42,240 Speaker 1: But generally speaking, it seems as though Texas has avoided 446 00:23:42,600 --> 00:23:46,280 Speaker 1: some of the housing affordability issues that have really become 447 00:23:46,280 --> 00:23:49,160 Speaker 1: a major crisis in California. Yeah, I think. I think 448 00:23:49,160 --> 00:23:52,560 Speaker 1: property taxes are working the way they are supposed to 449 00:23:52,560 --> 00:23:54,880 Speaker 1: do in Texas. I was in Austin just a couple 450 00:23:54,880 --> 00:23:58,520 Speaker 1: of months ago, and every single apartment building that was, 451 00:23:58,600 --> 00:24:01,359 Speaker 1: you know, over two decades old, was being remodeled. And 452 00:24:01,400 --> 00:24:02,760 Speaker 1: that's what you would do if you have a high 453 00:24:02,760 --> 00:24:04,760 Speaker 1: property tax. When you see that your property tax bill 454 00:24:04,840 --> 00:24:07,119 Speaker 1: is about to go up because home values have gone up, 455 00:24:07,119 --> 00:24:10,000 Speaker 1: you really are motivated to improve the properties you can 456 00:24:10,119 --> 00:24:13,520 Speaker 1: make up that that loss from the property tax. And 457 00:24:13,920 --> 00:24:17,360 Speaker 1: landlords are also passing that on to their renters. Many 458 00:24:17,520 --> 00:24:20,119 Speaker 1: renters are getting hit with big rent increases that aren't 459 00:24:20,160 --> 00:24:23,040 Speaker 1: capped and they have to move out, and then that 460 00:24:23,080 --> 00:24:25,560 Speaker 1: gives a landlord another opportunity to upgrade the property so 461 00:24:25,680 --> 00:24:27,200 Speaker 1: they can get a higher return, or just to rent 462 00:24:27,280 --> 00:24:30,040 Speaker 1: it to somebody who has more money to pay. So 463 00:24:30,119 --> 00:24:32,720 Speaker 1: I think it is causing a lot of disruption to 464 00:24:32,720 --> 00:24:36,680 Speaker 1: the people who actually live in Austin, and and I'm 465 00:24:36,680 --> 00:24:39,480 Speaker 1: sure that it's not easy to get that big rent 466 00:24:39,520 --> 00:24:41,960 Speaker 1: increase and just be told, well, this is the economy, 467 00:24:42,080 --> 00:24:46,320 Speaker 1: pay the market price. But it's it's working as intended 468 00:24:46,560 --> 00:24:49,159 Speaker 1: in in Austin from what I can tell, do you 469 00:24:49,200 --> 00:24:51,200 Speaker 1: think I mean, just going back to what Joe and 470 00:24:51,280 --> 00:24:53,760 Speaker 1: I were sort of discussing in the intro, but do 471 00:24:53,840 --> 00:24:58,320 Speaker 1: you think the balance or the emphasis that America puts 472 00:24:58,359 --> 00:25:03,560 Speaker 1: on home ownership would would things be better if if, 473 00:25:03,600 --> 00:25:08,720 Speaker 1: I guess, people were more accepting of being lifelong renters, 474 00:25:08,840 --> 00:25:12,159 Speaker 1: because you know, again I don't mean to denigrate the 475 00:25:12,200 --> 00:25:14,800 Speaker 1: American dream or anything like that, but in other countries, 476 00:25:15,119 --> 00:25:18,480 Speaker 1: you know, places like Germany or Austria, people will just 477 00:25:18,640 --> 00:25:21,560 Speaker 1: live in an apartment for a long period of time, 478 00:25:21,680 --> 00:25:25,399 Speaker 1: they have more rights as tenants, um, so maybe a 479 00:25:25,440 --> 00:25:28,000 Speaker 1: greater sense of ownership even though they don't actually own 480 00:25:28,520 --> 00:25:31,720 Speaker 1: the space. But would that be a solution to the 481 00:25:31,760 --> 00:25:36,120 Speaker 1: housing crisis, to just not have so much focus placed 482 00:25:36,160 --> 00:25:39,600 Speaker 1: on ownership versus renting. I mean, I'd like there to 483 00:25:39,640 --> 00:25:42,280 Speaker 1: be more of a balance for renters to not feel 484 00:25:42,320 --> 00:25:44,679 Speaker 1: like they are boxed out of creating wealth or that 485 00:25:44,720 --> 00:25:48,119 Speaker 1: they're always being displaced by higher and higher prices. But 486 00:25:48,240 --> 00:25:50,199 Speaker 1: I think that I think there are some advantages to 487 00:25:50,200 --> 00:25:52,159 Speaker 1: home ownership. I mean, it gives you the ability to 488 00:25:52,160 --> 00:25:54,520 Speaker 1: improve your property. If you actually own your house, you 489 00:25:54,560 --> 00:25:58,000 Speaker 1: can be responsible for mowing the lawn and maintaining it, 490 00:25:58,040 --> 00:26:00,720 Speaker 1: putting a new roof on, making it what you wanted 491 00:26:00,760 --> 00:26:02,360 Speaker 1: to be, and putting pride into that. So if you're 492 00:26:02,400 --> 00:26:05,560 Speaker 1: only renting, you might detach people from their homes a 493 00:26:05,560 --> 00:26:07,840 Speaker 1: bit more. But I think that there should be more balance, 494 00:26:07,880 --> 00:26:11,280 Speaker 1: and people shouldn't feel like they're not a cheating success 495 00:26:11,320 --> 00:26:13,400 Speaker 1: just because they are renting. It might just fit better 496 00:26:13,680 --> 00:26:16,760 Speaker 1: with their lifestyle and their own personal financial goals. I'm 497 00:26:16,840 --> 00:26:19,800 Speaker 1: sort of fascinated by this idea that with the land 498 00:26:19,880 --> 00:26:24,119 Speaker 1: value tax, you would sort of be punished implicitly for 499 00:26:24,600 --> 00:26:28,879 Speaker 1: uneconomical uses of your land. So if you just built 500 00:26:28,920 --> 00:26:32,280 Speaker 1: a single house on a property that could theoretically have 501 00:26:32,320 --> 00:26:35,919 Speaker 1: a duplex or a condo, you're sort of you're gonna 502 00:26:36,119 --> 00:26:38,720 Speaker 1: pay more. You're gonna pay a cost for that. Or 503 00:26:38,720 --> 00:26:41,280 Speaker 1: if you just have a golf course, then you're gonna 504 00:26:41,320 --> 00:26:43,120 Speaker 1: pay a cost for that, Or if you just want 505 00:26:43,119 --> 00:26:46,240 Speaker 1: to have a huge property all to yourself, you're gonna 506 00:26:46,240 --> 00:26:49,000 Speaker 1: pay a cost for that. For not developing. How much 507 00:26:49,040 --> 00:26:52,479 Speaker 1: do you think that could catalyze just more creation of 508 00:26:52,520 --> 00:26:57,080 Speaker 1: the housing stock itself. Oh, I think it would certainly 509 00:26:57,080 --> 00:26:59,920 Speaker 1: help it was paired with relaxed zoning laws. I mean, 510 00:27:00,119 --> 00:27:02,720 Speaker 1: part of the housing crisis I think is is single 511 00:27:02,760 --> 00:27:05,879 Speaker 1: family zoning. And if you had a problem if you 512 00:27:05,960 --> 00:27:08,160 Speaker 1: had a land value tax and the home was only 513 00:27:08,440 --> 00:27:11,280 Speaker 1: single family zoning, then the value of that land would 514 00:27:11,280 --> 00:27:13,000 Speaker 1: be less and if it was multifamily zoning. So maybe 515 00:27:13,000 --> 00:27:15,720 Speaker 1: that would actually be an incentive for even cities to 516 00:27:15,800 --> 00:27:17,640 Speaker 1: rethink their zoning if they knew that they could get 517 00:27:17,640 --> 00:27:21,159 Speaker 1: more tax revenue with better zoning. Um, So that that 518 00:27:21,160 --> 00:27:23,320 Speaker 1: could help in that sense. But yes, I think that 519 00:27:23,680 --> 00:27:27,760 Speaker 1: a land value tax motivates a homeowner to sell if 520 00:27:28,240 --> 00:27:30,440 Speaker 1: their home would be more valuable as a duplex or 521 00:27:30,440 --> 00:27:32,720 Speaker 1: a triplex, or maybe they would be the ones to 522 00:27:32,760 --> 00:27:35,600 Speaker 1: actually add in those extra units or put a granny 523 00:27:35,600 --> 00:27:37,960 Speaker 1: flat in or whatever, so they could get revenue to 524 00:27:38,040 --> 00:27:40,360 Speaker 1: make up for the property tax for the land value 525 00:27:40,400 --> 00:27:45,480 Speaker 1: tax rather m So, even if a land tax was enacted, 526 00:27:45,600 --> 00:27:47,960 Speaker 1: you know, let's say tomorrow, it feels like it would 527 00:27:48,000 --> 00:27:51,359 Speaker 1: take just because housing takes a while to build, it 528 00:27:51,520 --> 00:27:54,480 Speaker 1: feels like it would take a while until we got 529 00:27:54,800 --> 00:28:00,960 Speaker 1: fresh construction and greater supply, So I guess I don't know. 530 00:28:01,040 --> 00:28:03,679 Speaker 1: It just kind of feels like this particular generation of 531 00:28:03,720 --> 00:28:07,480 Speaker 1: homeowners or potential homeowners, like millennials, are just screwed. Yeah, 532 00:28:07,680 --> 00:28:09,880 Speaker 1: Like you know, it just feels like there's we've come 533 00:28:09,960 --> 00:28:12,639 Speaker 1: up against like a choke point in the system, and 534 00:28:12,640 --> 00:28:16,680 Speaker 1: there's no good way of rectifying it quickly. I think 535 00:28:16,680 --> 00:28:18,919 Speaker 1: from I think from a certain perspective that is true, 536 00:28:19,040 --> 00:28:22,480 Speaker 1: especially for millennials who grew up in a certain place 537 00:28:22,520 --> 00:28:24,600 Speaker 1: and always dreamed of owning a home like their parents 538 00:28:24,680 --> 00:28:27,640 Speaker 1: did in that place. I think that is very difficult. 539 00:28:27,760 --> 00:28:31,600 Speaker 1: You can't stay in the same socio economic status and 540 00:28:31,640 --> 00:28:34,920 Speaker 1: still expect to achieve the things that your parents did, 541 00:28:35,200 --> 00:28:37,560 Speaker 1: just because we didn't build enough homes for everyone to 542 00:28:37,600 --> 00:28:41,840 Speaker 1: have that same, that same American dream. But if millennials 543 00:28:42,200 --> 00:28:44,680 Speaker 1: kind of rethink what the dream means for them, maybe 544 00:28:44,680 --> 00:28:47,120 Speaker 1: living in a more affordable area, moving to a different 545 00:28:47,120 --> 00:28:49,640 Speaker 1: part of the country, living in a condo or a 546 00:28:49,720 --> 00:28:52,480 Speaker 1: multifamily home instead of a single family home, I think 547 00:28:52,520 --> 00:28:55,960 Speaker 1: that they can still still achieve economic prosperity. It might 548 00:28:56,000 --> 00:28:58,320 Speaker 1: just not look the way that they thought it would 549 00:28:58,360 --> 00:29:01,960 Speaker 1: look twenty years ago. Well, are the millennial parents? Are 550 00:29:02,000 --> 00:29:04,000 Speaker 1: the boomers ever going to sell their homes? I mean 551 00:29:04,040 --> 00:29:07,720 Speaker 1: you mentioned people staying in their homes for longer than 552 00:29:07,760 --> 00:29:10,000 Speaker 1: maybe they need to, even after the kids have moved out. 553 00:29:10,280 --> 00:29:12,440 Speaker 1: And it feels like this has come you know, there's 554 00:29:12,440 --> 00:29:15,120 Speaker 1: come up on prior episode, Like it feels like everyone 555 00:29:15,280 --> 00:29:17,880 Speaker 1: is waiting for this to happen, this wave of supply 556 00:29:18,000 --> 00:29:20,240 Speaker 1: that's going to come to the market, But like, is 557 00:29:20,320 --> 00:29:22,280 Speaker 1: that actually gonna happen or is it always going to 558 00:29:22,360 --> 00:29:24,840 Speaker 1: be like years out And it's always like this sort 559 00:29:24,840 --> 00:29:27,600 Speaker 1: of dream that it happens, but it never actually transpires. 560 00:29:28,920 --> 00:29:30,640 Speaker 1: And I don't think it's going to happen in the 561 00:29:30,680 --> 00:29:33,920 Speaker 1: next decade, just because baby boomers aren't that old and 562 00:29:34,000 --> 00:29:37,040 Speaker 1: life expectancies are going up, and it's hard to predict 563 00:29:37,160 --> 00:29:41,040 Speaker 1: out farther than a decade because it's so much a 564 00:29:41,040 --> 00:29:43,600 Speaker 1: policy choice. Like people ask me a lot about like, oh, 565 00:29:43,640 --> 00:29:45,840 Speaker 1: there's a witness wave millennials, what about gen Z? Because 566 00:29:45,880 --> 00:29:48,400 Speaker 1: gen Z is slightly smaller than millennials, But gen Z 567 00:29:48,520 --> 00:29:51,320 Speaker 1: is a smaller generation because of a policy choice. We 568 00:29:51,360 --> 00:29:55,440 Speaker 1: had much more immigration that promoted the size of the 569 00:29:55,440 --> 00:29:58,640 Speaker 1: millennial generation and we kind of cut back on immigration 570 00:29:58,720 --> 00:30:01,440 Speaker 1: since then. So we would choose to be a country 571 00:30:01,480 --> 00:30:04,560 Speaker 1: that can grow and can accommodate more people if we 572 00:30:04,640 --> 00:30:08,000 Speaker 1: had better housing policies. So, but we can also shoot 573 00:30:08,040 --> 00:30:11,640 Speaker 1: ourselves in the foot and not and not promote immigration 574 00:30:11,800 --> 00:30:15,200 Speaker 1: or growth and keep in this kind of same state. 575 00:30:29,440 --> 00:30:31,920 Speaker 1: So the other thing that we spoke a bit about 576 00:30:31,960 --> 00:30:35,440 Speaker 1: in the intro was just the stress of the housing 577 00:30:35,480 --> 00:30:38,360 Speaker 1: market and people, you know, get worried when house prices 578 00:30:38,400 --> 00:30:42,160 Speaker 1: go up and it affects affordability for potential buyers, and 579 00:30:42,240 --> 00:30:44,920 Speaker 1: then people get worried when they start going down because 580 00:30:44,920 --> 00:30:48,360 Speaker 1: if you're a homeowner, you're losing equity and losing wealth. 581 00:30:49,040 --> 00:30:51,960 Speaker 1: Um Is is there a way too, you know, especially 582 00:30:52,000 --> 00:30:54,240 Speaker 1: in the current environment where mortgage rates have gone up 583 00:30:54,280 --> 00:30:56,800 Speaker 1: and we are starting to see some softness in the market, Like, 584 00:30:57,080 --> 00:31:00,640 Speaker 1: how should we be looking at house prices in the environment, 585 00:31:00,640 --> 00:31:03,240 Speaker 1: Because there were plenty of people saying that the past 586 00:31:03,320 --> 00:31:06,440 Speaker 1: year has past year or two have been problematic because 587 00:31:06,560 --> 00:31:09,480 Speaker 1: people are getting priced out of where they want to buy. 588 00:31:09,600 --> 00:31:11,160 Speaker 1: Um And on the other hand, a lot of people 589 00:31:11,160 --> 00:31:14,200 Speaker 1: who bought over the past couple of years, myself included, 590 00:31:14,240 --> 00:31:17,440 Speaker 1: are probably going to be worried one house prices start 591 00:31:17,560 --> 00:31:20,080 Speaker 1: going down. Yeah, I think you said it well. But 592 00:31:20,360 --> 00:31:22,560 Speaker 1: if you haven't bought a home, home prices going up 593 00:31:22,680 --> 00:31:24,680 Speaker 1: is a is a real problem. If you already owned 594 00:31:24,720 --> 00:31:27,600 Speaker 1: a home, home prices going up isn't so bad, but 595 00:31:27,720 --> 00:31:31,360 Speaker 1: it can have other perverse effects on the economy that 596 00:31:31,440 --> 00:31:35,200 Speaker 1: might impact you. So maybe if you live in uh, 597 00:31:35,280 --> 00:31:37,560 Speaker 1: let's say a city like Austin and home values have 598 00:31:37,600 --> 00:31:40,560 Speaker 1: gone up, you're going to be paying more in property tax. 599 00:31:40,600 --> 00:31:42,920 Speaker 1: As home values go up, You're gonna probably paying more 600 00:31:42,960 --> 00:31:46,520 Speaker 1: for groceries because people need to make more to work 601 00:31:46,520 --> 00:31:49,040 Speaker 1: at the grocery store to afford their rent. And you 602 00:31:49,120 --> 00:31:51,920 Speaker 1: might just see more inflation across the board. Redfen did 603 00:31:51,920 --> 00:31:54,440 Speaker 1: a study of war inflation was going up the most, 604 00:31:54,480 --> 00:31:57,760 Speaker 1: and it's going up faster. And migration destinations the places 605 00:31:57,760 --> 00:32:00,360 Speaker 1: people are moving to than the places people are leaving, 606 00:32:00,400 --> 00:32:03,320 Speaker 1: like San Francisco or New York of Los Angeles. Do 607 00:32:03,360 --> 00:32:07,320 Speaker 1: you think it's possible that we'll see a nationwide price 608 00:32:07,480 --> 00:32:10,240 Speaker 1: decline like because I think people have been skipping like 609 00:32:10,400 --> 00:32:12,880 Speaker 1: other things will slow down or will be see an 610 00:32:12,920 --> 00:32:16,480 Speaker 1: end of bidding wars, But the underlying average price is 611 00:32:16,640 --> 00:32:19,400 Speaker 1: still going up. Do you think an actual like nominal 612 00:32:19,480 --> 00:32:25,080 Speaker 1: home price decline is possible. Redfin is forecasting home price 613 00:32:25,160 --> 00:32:28,240 Speaker 1: growth to slow to seven percent by the end of 614 00:32:28,280 --> 00:32:31,120 Speaker 1: the year. That's compared to the previous year UH and 615 00:32:31,200 --> 00:32:34,840 Speaker 1: by three for annual price growth to slow to about 616 00:32:34,880 --> 00:32:39,720 Speaker 1: three by spring. So home prices were expecting to stay positive, 617 00:32:39,840 --> 00:32:44,600 Speaker 1: but to really start to slow down to a very 618 00:32:44,600 --> 00:32:47,520 Speaker 1: slow pace. One interesting thing we didn't talk about is 619 00:32:47,640 --> 00:32:51,960 Speaker 1: negative land value taxes UM. So the idea is that 620 00:32:52,080 --> 00:32:55,200 Speaker 1: a place like Flint, Michigan, for example, their land value 621 00:32:55,680 --> 00:32:57,840 Speaker 1: was deteriorated because of the lead in the water. So 622 00:32:57,880 --> 00:33:00,720 Speaker 1: maybe we should be sending chucks to people who own 623 00:33:00,840 --> 00:33:03,560 Speaker 1: land there because of the way that the government kind 624 00:33:03,560 --> 00:33:06,080 Speaker 1: of failed them in terms of the infrastructure. It's interesting 625 00:33:06,200 --> 00:33:10,480 Speaker 1: ahead and thought about that. So would then necessitate in theory, though, 626 00:33:10,520 --> 00:33:14,120 Speaker 1: that any sort of land value tax be sort of 627 00:33:14,160 --> 00:33:17,720 Speaker 1: done on a national basis or like like it would 628 00:33:17,720 --> 00:33:20,920 Speaker 1: it be optimal in general to not have this highly 629 00:33:21,000 --> 00:33:26,040 Speaker 1: patchwork system of property taxes that are idiosyncratic by city 630 00:33:26,120 --> 00:33:28,719 Speaker 1: and state and to come up with some sort of 631 00:33:28,760 --> 00:33:33,520 Speaker 1: more national national tax code when it comes to real estate. Possibly, 632 00:33:33,560 --> 00:33:35,840 Speaker 1: I mean the government does it for flood insurance. They 633 00:33:35,840 --> 00:33:39,840 Speaker 1: come up with a property level flood insurance premium that's 634 00:33:40,120 --> 00:33:42,320 Speaker 1: done at the national level, So they definitely could. And 635 00:33:42,520 --> 00:33:44,760 Speaker 1: I think the more data you put into the model 636 00:33:44,840 --> 00:33:48,440 Speaker 1: the better it would be. In theory, models were never perfect, 637 00:33:48,520 --> 00:33:52,920 Speaker 1: but the more data the better generally. So one thing 638 00:33:52,960 --> 00:33:58,160 Speaker 1: I was wondering about was, I guess conservation versus incentivizing 639 00:33:58,200 --> 00:34:01,520 Speaker 1: people to to build on things, because there there would 640 00:34:01,560 --> 00:34:05,880 Speaker 1: be some areas, presumably where you wouldn't want people to 641 00:34:05,960 --> 00:34:09,720 Speaker 1: be incentivized to build a skyscraper or you know, multi 642 00:34:09,760 --> 00:34:14,560 Speaker 1: story residential housing or whatever is that would that be 643 00:34:14,680 --> 00:34:17,719 Speaker 1: taking care of by zoning laws or like, how do 644 00:34:17,760 --> 00:34:23,160 Speaker 1: you reconcile different potential uses of land with the land 645 00:34:23,200 --> 00:34:27,120 Speaker 1: tax and the incentives that it creates. I mean, you 646 00:34:27,160 --> 00:34:29,640 Speaker 1: could put a value on just about anything. You could 647 00:34:29,680 --> 00:34:33,120 Speaker 1: incorporate the carbon value of land if there is some 648 00:34:33,800 --> 00:34:36,719 Speaker 1: if they're like, say that carbon is valued at some 649 00:34:36,840 --> 00:34:39,640 Speaker 1: dollar per ton, and having a bunch of trees on 650 00:34:39,800 --> 00:34:42,560 Speaker 1: land absorbs that carbon. You could put a dollar value 651 00:34:42,680 --> 00:34:45,040 Speaker 1: on that value, on the value of having the land 652 00:34:45,080 --> 00:34:47,920 Speaker 1: remain vacant, and you can give credits to people who 653 00:34:48,000 --> 00:34:50,000 Speaker 1: who do that kind of activity. So I think the 654 00:34:50,200 --> 00:34:52,080 Speaker 1: land value tax. You can get really creative with it 655 00:34:52,120 --> 00:34:54,760 Speaker 1: and try to incorporate a lot of different kind of values. 656 00:34:54,840 --> 00:34:57,319 Speaker 1: Like you mentioned, there's value and having a park that 657 00:34:57,440 --> 00:34:59,840 Speaker 1: goes the public even though you're not actually charging people 658 00:34:59,840 --> 00:35:03,520 Speaker 1: to use the park. But I'm sure clutter economists could 659 00:35:03,600 --> 00:35:06,240 Speaker 1: come up with some estimate of the value to be used. 660 00:35:06,520 --> 00:35:10,680 Speaker 1: So one of the perverse things about right now is like, Okay, 661 00:35:10,719 --> 00:35:14,239 Speaker 1: how's it up until very recently with the mortgage rade jump, 662 00:35:14,280 --> 00:35:18,880 Speaker 1: but how's it has gotten less and less affordable? And 663 00:35:18,960 --> 00:35:22,719 Speaker 1: so people are stuck in renting. But renting itself has 664 00:35:22,760 --> 00:35:25,040 Speaker 1: all kinds of problems to For one, rent prices have 665 00:35:25,120 --> 00:35:28,880 Speaker 1: surge too. You can't lock in a rent price very easily, 666 00:35:29,000 --> 00:35:31,640 Speaker 1: so not they keep going up year after year. You're like, 667 00:35:31,920 --> 00:35:34,160 Speaker 1: you're you're not on the housing ladder, but you're also 668 00:35:34,200 --> 00:35:38,040 Speaker 1: falling behind potentially if your wages don't keep up with 669 00:35:38,080 --> 00:35:41,200 Speaker 1: your rent What do you see happening on the rental side? 670 00:35:41,320 --> 00:35:44,120 Speaker 1: And you know you mentioned that prices or that your 671 00:35:44,160 --> 00:35:47,120 Speaker 1: forecasts are for prices to cool off, would you expect 672 00:35:47,160 --> 00:35:51,400 Speaker 1: rental inflation to cool off roughly in line with the 673 00:35:51,680 --> 00:35:55,719 Speaker 1: cooling off of housing prices or can the two move separately. 674 00:35:57,320 --> 00:36:01,160 Speaker 1: It really depends on what measure of rentalation we're talking about, 675 00:36:02,239 --> 00:36:05,480 Speaker 1: because asking rents for the for rentals that are on 676 00:36:05,480 --> 00:36:09,399 Speaker 1: the market currently, uh, those peaked last month. I think 677 00:36:09,400 --> 00:36:11,319 Speaker 1: it was eighteen percent up year every year, and now 678 00:36:11,360 --> 00:36:13,520 Speaker 1: it's down to like seventeen percent year every year. So 679 00:36:13,680 --> 00:36:15,400 Speaker 1: we seem to be past the hump in terms of 680 00:36:15,680 --> 00:36:18,319 Speaker 1: home or apartments that are on the market. But that's 681 00:36:18,320 --> 00:36:20,960 Speaker 1: going to trickle into all other rentals in terms of 682 00:36:21,000 --> 00:36:24,040 Speaker 1: what people are paying on their lease each and every year, 683 00:36:24,080 --> 00:36:25,880 Speaker 1: because if you're in a rental for a long time, 684 00:36:26,320 --> 00:36:28,799 Speaker 1: then maybe your rent was sent who was actually set 685 00:36:28,840 --> 00:36:31,360 Speaker 1: a couple of years ago and isn't updated as frequently. 686 00:36:31,640 --> 00:36:34,760 Speaker 1: Landlords tend to like keeping tenants because it's lower costs 687 00:36:34,800 --> 00:36:36,680 Speaker 1: for them than finding a new one. So I don't 688 00:36:36,680 --> 00:36:38,680 Speaker 1: think it's the end of rental inflation in terms of 689 00:36:38,840 --> 00:36:41,640 Speaker 1: how much people are actually paying, but at least the 690 00:36:42,719 --> 00:36:45,400 Speaker 1: fuel is no longer being poured on the fire. It 691 00:36:45,440 --> 00:36:49,480 Speaker 1: seems so obvious question what is the possibility of a 692 00:36:49,560 --> 00:36:53,200 Speaker 1: land tax actually getting enacted in the US, And is 693 00:36:53,200 --> 00:36:56,399 Speaker 1: there anyone out there currently who who's making noises about 694 00:36:56,440 --> 00:37:02,040 Speaker 1: this or or advocating for it. There's an online community 695 00:37:02,080 --> 00:37:04,360 Speaker 1: of people who are who are very into land taxes, 696 00:37:04,880 --> 00:37:07,480 Speaker 1: the Lincoln Land Institute, I'll shot them out. They do 697 00:37:07,560 --> 00:37:10,520 Speaker 1: a lot of work in terms of educating at more 698 00:37:10,880 --> 00:37:14,959 Speaker 1: the municipal level how policymakers should should use their land 699 00:37:15,000 --> 00:37:17,359 Speaker 1: to tax it or at lease their land as an 700 00:37:17,360 --> 00:37:20,520 Speaker 1: alternative land taxes. So so there are this is happening 701 00:37:20,560 --> 00:37:23,080 Speaker 1: at a local level. At a federal level, I'm not 702 00:37:23,120 --> 00:37:26,239 Speaker 1: sure it's even constitutional for the government to have a 703 00:37:26,280 --> 00:37:28,799 Speaker 1: federal land tax. I think it violates the Commerce Cloud 704 00:37:28,920 --> 00:37:31,920 Speaker 1: or something like that. But perhaps they could could at 705 00:37:31,960 --> 00:37:34,360 Speaker 1: least set up the infrastructure for it to be easier 706 00:37:34,440 --> 00:37:38,280 Speaker 1: for municipalities to adopt one. There's definitely a very vocal 707 00:37:38,360 --> 00:37:42,200 Speaker 1: online community about mixing all of these sort of zoning 708 00:37:42,320 --> 00:37:49,080 Speaker 1: reforms and changing land taxes. But the gap between actually 709 00:37:49,160 --> 00:37:51,439 Speaker 1: sort of like, yes, this makes a lot of sense 710 00:37:51,480 --> 00:37:53,960 Speaker 1: on paper versus Okay, we're gonna have this sort of 711 00:37:54,000 --> 00:37:57,080 Speaker 1: new framework where your house is not necessarily going to 712 00:37:57,080 --> 00:38:00,560 Speaker 1: be your economic nest egg. Still seems like a pretty huge, 713 00:38:00,800 --> 00:38:04,319 Speaker 1: uh wall to overcome, so to speak. Well, we're starting now. 714 00:38:04,719 --> 00:38:09,880 Speaker 1: You start calling, call your local politicians. Yeah, everything starts 715 00:38:09,920 --> 00:38:14,480 Speaker 1: online through tweeting these days, so eventually, eventually, just like 716 00:38:14,520 --> 00:38:17,960 Speaker 1: it was your tweet Darryl about that's like, oh well, 717 00:38:18,160 --> 00:38:20,600 Speaker 1: this is why we have to do an odd episode anyway, 718 00:38:20,840 --> 00:38:25,560 Speaker 1: you start start with tweeting and then the world changes absolutely. 719 00:38:26,160 --> 00:38:29,080 Speaker 1: All right, Well, Darryl, thank you so much for coming 720 00:38:29,080 --> 00:38:32,000 Speaker 1: on ODDS. Thank you. This is great. Yeah. Thanks. So, 721 00:38:48,000 --> 00:38:51,360 Speaker 1: I thought that was really interesting and this idea that 722 00:38:51,719 --> 00:38:56,600 Speaker 1: you know, we talked about renting or owning property versus say, 723 00:38:56,840 --> 00:39:00,239 Speaker 1: renting it very long term from the government. Those seem 724 00:39:00,320 --> 00:39:03,879 Speaker 1: like really two different things, but they're not necessarily like 725 00:39:04,200 --> 00:39:07,400 Speaker 1: that different. And some of it is just like slightly 726 00:39:07,480 --> 00:39:11,160 Speaker 1: reframing how we think of things, or is this attacks 727 00:39:11,400 --> 00:39:15,640 Speaker 1: or rent what seems like a radical difference, maybe maybe 728 00:39:15,719 --> 00:39:21,920 Speaker 1: a bit more subtle. Yeah, yeah, um, but part of me, 729 00:39:22,880 --> 00:39:25,920 Speaker 1: I mean part of me just thinks whatever someone says 730 00:39:26,440 --> 00:39:30,839 Speaker 1: we're going to solve this problem with an extra attacks 731 00:39:31,239 --> 00:39:35,400 Speaker 1: like you will immediately get a knee jerk reaction, certainly 732 00:39:35,560 --> 00:39:41,279 Speaker 1: in Washington. And I think there's something about homeownership in 733 00:39:41,320 --> 00:39:45,520 Speaker 1: America in particular that just makes it such an emotional 734 00:39:46,160 --> 00:39:51,680 Speaker 1: topic that it feels like it's a very difficult system 735 00:39:51,719 --> 00:39:55,600 Speaker 1: to change. Oh, it's incredibly difficult to change or the 736 00:39:55,600 --> 00:39:59,920 Speaker 1: idea like all these zoning requirements and despite all the 737 00:40:00,040 --> 00:40:02,920 Speaker 1: housing shortages of the frustration because like you want to 738 00:40:03,040 --> 00:40:06,080 Speaker 1: change one thing, like you'll read about like the herculean 739 00:40:06,239 --> 00:40:08,520 Speaker 1: efforts that a developer had to go through to be 740 00:40:08,600 --> 00:40:12,319 Speaker 1: able to like build a duplex somewhere or the like 741 00:40:12,400 --> 00:40:15,480 Speaker 1: in California, they like try passing a law so that 742 00:40:15,600 --> 00:40:18,640 Speaker 1: a condo condominium building could be like built within a 743 00:40:18,680 --> 00:40:21,680 Speaker 1: few blocks of a train station. All of these things 744 00:40:21,719 --> 00:40:26,600 Speaker 1: that seem kind of modest just run into incredible blockages 745 00:40:27,080 --> 00:40:30,560 Speaker 1: politically still though, like thinking about these like all their 746 00:40:30,600 --> 00:40:33,520 Speaker 1: countries where they might do something like a hundred year 747 00:40:33,640 --> 00:40:37,480 Speaker 1: lease as opposed to owning the land outright, and you know, 748 00:40:37,560 --> 00:40:40,840 Speaker 1: Singapore has that, and we don't think of like Singapore 749 00:40:41,040 --> 00:40:43,040 Speaker 1: is being like you know, I think Singapore is a 750 00:40:43,080 --> 00:40:47,960 Speaker 1: reputation for being like a pretty free market economy. So 751 00:40:48,000 --> 00:40:49,879 Speaker 1: it is interesting that even within the sort of free 752 00:40:49,880 --> 00:40:54,239 Speaker 1: market economies, there are different ways of conceptualizing homeownership or 753 00:40:54,360 --> 00:40:57,000 Speaker 1: what it means to occupy a certain piece of land 754 00:40:57,280 --> 00:41:00,880 Speaker 1: or property. Yeah, well, I mean I I do agree 755 00:41:00,960 --> 00:41:03,760 Speaker 1: that there, and I think a lot of real estate 756 00:41:03,840 --> 00:41:06,799 Speaker 1: developers would would probably say this too, but like there 757 00:41:07,000 --> 00:41:11,240 Speaker 1: is a perverse incentive that is created by the emphasis 758 00:41:11,280 --> 00:41:15,000 Speaker 1: on property tax and the idea that if you improve 759 00:41:15,040 --> 00:41:17,919 Speaker 1: a property or if it goes up in value, you're 760 00:41:17,920 --> 00:41:20,800 Speaker 1: going to have to pay more for that. Like that 761 00:41:21,239 --> 00:41:26,080 Speaker 1: just on its face seems kind of weird, especially when 762 00:41:26,120 --> 00:41:29,080 Speaker 1: we're talking about housing shortage and the need to create 763 00:41:29,080 --> 00:41:32,319 Speaker 1: more units and better units, preferably well, and I like 764 00:41:32,440 --> 00:41:34,520 Speaker 1: that point though, And it seems like a case for 765 00:41:34,760 --> 00:41:38,760 Speaker 1: the land value tax, which is okay, if you're gonna 766 00:41:39,000 --> 00:41:40,800 Speaker 1: you know, the property tax or in your case, it 767 00:41:40,880 --> 00:41:43,960 Speaker 1: might seem like it's penalizing you for improving the property. 768 00:41:44,040 --> 00:41:46,520 Speaker 1: But if you also had a penalty for not improving 769 00:41:46,520 --> 00:41:49,960 Speaker 1: your property because you're essentially paying more for the same 770 00:41:50,000 --> 00:41:52,839 Speaker 1: thing because the value of the land we're going up, 771 00:41:53,120 --> 00:41:55,840 Speaker 1: then you might counteract that and you might get this 772 00:41:55,920 --> 00:42:00,120 Speaker 1: sort of like the greater economic incentive to actually the 773 00:42:00,360 --> 00:42:02,520 Speaker 1: build out property. So I sort of think it's an 774 00:42:02,560 --> 00:42:08,280 Speaker 1: interesting idea from sort of basically counteracting the perverse negative 775 00:42:08,280 --> 00:42:12,239 Speaker 1: effects of the property text alone. Totally. I mean, definitely, 776 00:42:12,640 --> 00:42:17,399 Speaker 1: I guess I'm just cynical nowadays, but yeah, I am. Yeah, Okay, 777 00:42:17,440 --> 00:42:19,279 Speaker 1: shall we leave it that? Leave it there. This has 778 00:42:19,320 --> 00:42:22,640 Speaker 1: been another episode of the All Thoughts podcast. I'm Tracy Alloway. 779 00:42:22,719 --> 00:42:25,200 Speaker 1: You can follow me on Twitter at Tracy Alloway and 780 00:42:25,239 --> 00:42:27,520 Speaker 1: I'm Joe wi Isn't Thal. You can follow me on 781 00:42:27,520 --> 00:42:31,520 Speaker 1: Twitter at The Stalwart. Follow our guest Darryl Fairweather. She's 782 00:42:31,640 --> 00:42:36,239 Speaker 1: at fair Weather pH D. Follow our producer Carmen Rodriguez 783 00:42:36,280 --> 00:42:39,680 Speaker 1: at Carmen Arman. Follow the Bloomberg head of podcast Forcesca 784 00:42:39,760 --> 00:42:42,680 Speaker 1: Levi at Francesca Today, and check out all of our 785 00:42:42,719 --> 00:42:46,520 Speaker 1: podcasts at Bloomberg under the handle at podcasts. Thanks for 786 00:42:46,600 --> 00:43:08,359 Speaker 1: listening to Take Tea. It takes t things. Take to Tea.