08-26-2021, 08:22 AM
(08-25-2021, 10:19 PM)tomh009 Wrote:(08-25-2021, 06:29 PM)plam Wrote: Yes, implementation details matter too, but the principle of taxing things that we don't want is actually a good one.
Agreed. Some things are easy: vacant land in a PARTS zone (near a station) clearly shouldn't be discounted. An empty building that cannot be rented? Should be the same as one that is rented.
Other cases can admittedly be more complicated.
Those are great examples where the complicated tax policy pushes in the wrong direction, so things can be improved by simplifying the tax code to stop pushing. This is easy to justify and requires much less care than making the tax code more complicated in order to push for some outcome.
On a similar note, I’ve heard that tons of buildings in New York (and probably other cities as well) have empty storefronts because the value of the building (relevant for mortgage-backed securities) depends on the rent; but for some reason it doesn’t depend on the rent collected but on the stated rent. If they say the space is “for rent” for $100,000 per month, then the value of the property is some multiple of $100,000; but if they actually rent it for $90,000 per month, the value drops by the corresponding 10%.
This is of course absurd, and calls into question the intelligence of the bankers; except that I’m sure their bonuses are being paid, so their intelligence is fine; but the regulators really ought to do something about it, like require them to use the rent they can actually realize as the basis for valuation.