You’re also stuck with the land since you’ve got some buildings on it and you can’t move the buildings, so selling it has huge switching costs.
Of course, you’ll need land to build the garbage dump on, but the garbage dump can affect the property values of a larger sized area than the actual dump. Also note that the garbage dump unequally reduces the value of different uses of the land, so the querstion “doesn’t the garbage dump reduce the value of the building by enough to make up for the tax savings” may not be a yes. In some cases, the building that’s already on the land may even produce a garbage dump as a side effect—consider a factory, for instance.
I feel that you are loosing track of the conversation.
The initial example was about an empty lot and the incentives of the owner what to build there. Now you are suddenly talking about already having buildings on the land.
We can talk about this different case, of course, but first lets finish the case we started with. Do you concede that LVT does not, in fact, motivate to build garbage dumps on empty lots more than SQ?
No, I don’t concede that. Even for an empty lot, the guy who owns it presumably owns it for a reason. Like buildings, it’s plausible that this reason 1) cannot just easily transfer to a new piece of land, and 2) is not reduced in value so much by the garbage dump that building the garbage dump isn’t worth it.
Also, if he sells it, someone else can build a building on it, thus increasing the taxes he has to pay on the remaining portion. And if he builds a garbage dump, it discourages other people from building nearby and raising his taxes; selling doesn’t do that.
You’re also stuck with the land since you’ve got some buildings on it and you can’t move the buildings, so selling it has huge switching costs.
Of course, you’ll need land to build the garbage dump on, but the garbage dump can affect the property values of a larger sized area than the actual dump. Also note that the garbage dump unequally reduces the value of different uses of the land, so the querstion “doesn’t the garbage dump reduce the value of the building by enough to make up for the tax savings” may not be a yes. In some cases, the building that’s already on the land may even produce a garbage dump as a side effect—consider a factory, for instance.
I feel that you are loosing track of the conversation.
The initial example was about an empty lot and the incentives of the owner what to build there. Now you are suddenly talking about already having buildings on the land.
We can talk about this different case, of course, but first lets finish the case we started with. Do you concede that LVT does not, in fact, motivate to build garbage dumps on empty lots more than SQ?
No, I don’t concede that. Even for an empty lot, the guy who owns it presumably owns it for a reason. Like buildings, it’s plausible that this reason 1) cannot just easily transfer to a new piece of land, and 2) is not reduced in value so much by the garbage dump that building the garbage dump isn’t worth it.
Also, if he sells it, someone else can build a building on it, thus increasing the taxes he has to pay on the remaining portion. And if he builds a garbage dump, it discourages other people from building nearby and raising his taxes; selling doesn’t do that.