Land Is Not a Commodity: Why a Land Value Tax Can Cure the Housing Crisis
The housing shortage is only a symptom; the real disease is land monopoly. A land value tax shifts the burden off buildings and onto land, forcing hoarders to develop or sell, and returning location value to society instead of fattening landlords.
The argument · tap a timestamp to hear it
A land tax is not a property tax, it is a location tax
Lars builds his case on one analogy: the land value tax and the ordinary property tax share a root, but the LVT splits ‘building value’ from ‘land value’. A building tax punishes you for constructing, maintaining, renovating; a land tax only punishes you for occupying a good location and letting nothing grow on it. Land value, he says, comes from the labor of the people around you — your ability to earn, to go to school, to make friends the moment you walk out the door depends entirely on your neighbors and the whole city. The landlord lies back and sucks that collective value into his own pocket, and that is the paradox of Progress and Poverty: the ballpoint pen fell from $270 to 11 cents, but land never does.
— LarsThe YIMBYs are right, but not right enough
The host asks: Oakland upzoned and rents fell, so do we still need a land tax? Lars concedes that ‘housing shortage’ is the main cause, but points out that YIMBYs never explain one counterexample: Houston has no zoning, yet its downtown still holds a giant surface parking lot worth $500 million. Why? Because the property tax bundles land and building together, so the more you build the more you pay, while sitting on it and waiting for appreciation is cheaper. Developers therefore have no incentive to develop, only an incentive to lobby for rezoning and then keep hoarding. Without land tax reform, he says, you arrive at the deadlock of ‘you changed the zoning, but I just won't sell’.
— LarsThe objections are powered by imagination
Lars sorts the opposition into three camps and takes them apart one by one. How do you appraise land separately from buildings? He says 14,000 assessment jurisdictions worldwide already do something like it: South Korea manually reviews 500,000 sample parcels a year and produces nationwide land values in 5 months; Norway trained a national automated valuation model on the state property data platform Finn.no with a core team of just 3 people. Think there will be too many protests? He says the real source of protest is ‘the land looks the same as next door, why charge me more’ — under a land tax, you and your neighbor are assessed on the same location basis, which actually makes it easier. The excuse for not doing it is that nobody has measured it.
— LarsThe little old lady is not an argument against it
The sharpest criticism is ‘the transition is unfair’ — on the day a land tax is announced, existing landowners instantly bear the capitalized burden of all future taxes, which amounts to expropriation in one stroke. Lars concedes this is a Gordon Tullock-style transition trap, then offers the guardrail: the move is never a one-step nationwide 100% land tax, but a gradual switch by school district, by county; run revenue-neutral simulations and most single-family homes actually see their tax bill fall. As for the elderly afraid of being driven out of the old family house, he says Texas has long had a tax deferral system: you owe it, and after death it is deducted with interest from the estate.
— LarsBritain's failure was a capacity problem
The most-cited counterexample online is Britain's 1910s ‘People's Budget’: the valuation took 6 years and was overturned by shopkeepers' protests and the courts. Lars's reply is blunt: that much-shared article is simply ‘deriving a universal law from 1 sample’, and it simultaneously claims that ‘a pure land tax has never succeeded’ and that ‘land cannot be valued’ — yet South Korea has been appraising nationwide land values parcel by parcel for decades. That only proves the British state machine was weak, he says, not that a land tax is theoretically unworkable. His tone hardens: if you want to be a serious critic, go find counterexamples, don't pass off lazy ignorance as a verdict.
— LarsNorway achieves Georgism through a resource dividend
Lars points to a fact that makes Norway a ‘success story’ today: the entire Norwegian resource management regime is Georgist in structure — oil and other natural resources are treated as the property of all the people, and extractors pay extremely high resource taxes, but production and investment themselves are not punished, so entrepreneurship is encouraged while the natural bounty is captured for the treasury and used to fund universal welfare. Norway's Georgism is almost perfect, except that it is not on land value. This ‘Norwegian paradox’ leads him to assert: the land tax is not the enemy of the welfare state, it can be its foundation.
— LarsThe automobile opened a second frontier
Lars explains why the land question that filled the air 100 years ago later vanished: the frontier is itself a mechanism of ‘free land’ — as long as you can still expand into the wilderness, the people at the bottom don't have to face the squeeze of ‘high wages plus high rent’. America's first frontier was westward expansion, and when it closed Henry George appeared; in the 20th century the automobile turned the suburbs into a ‘second frontier’ and extended it another 80 years, until it closed again around 2006-2008. He says people now call this a ‘second Gilded Age’, but it is just the script from a hundred-odd years ago with a new cast, and post-pandemic remote work, as a ‘third frontier’, held out for roughly 5 minutes before capital digested it.
— LarsDon't win online, do the politicians' homework
The closing answer is very concrete: Lars says the most effective way to create change he has learned in the past 5 years is not arguing with keyboard warriors, but taking every objection a state senator or city council member might raise, running the data simulations and preparing the answers in advance, and putting them directly on their desks — ‘doing politicians' homework’, he says, is an absurd but extraordinarily effective strategy. Several states have already passed bills allowing land tax reform. His call to action: go measure, don't guess.
— LarsIn their own words · checked verbatim
You can't eat, sleep, work, or even poop without access to a place to do so. And if you do any of these things in a place where you're not allowed to be, terrible things can happen to you. You may be arrested. You can be executed, depending on where on earth you do it.
Lars0:07
I think this is what I call the imagined objections of people who haven't measured.
Lars0:21
Measure twice, cut once.
Lars0:28
Stop assuming that if you can't find something written in English or not on the internet, it doesn't exist. There are things called books, there are things called other countries, and there are things called other languages.
Lars0:39
You never know until you look. You never know until you look and run a simulation. And don't let your imagination, your imaginary denial, replace what is really there.
Lars0:51
Don't waste your time winning online arguments with keyboard warriors. Spend your time doing homework for politicians, which is a surprisingly effective method of change.
Lars0:53
Figures
| Size of Henry George's funeral | roughly 10% of New York City's population at the time | 0:03 |
| Price of the ballpoint pen at its invention | about $270 in today's money, now about 11 cents | 0:07 |
| Number of assessment jurisdictions in North America | about 14,000 | 0:23 |
| Land value tax rate in German-occupied Jiaozhou (Qingdao) | 6% | 0:41 |
Glossary
- Land Value Tax (LVT)
- An annual tax levied on the value of land rather than total property value, which does not punish building improvements.
- Georgism
- The 19th-century movement launched by Henry George: land is common wealth, and land rent should be captured by society.
- YIMBY
- The movement that advocates loosening land-use zoning rules and allowing more housing to be built.
- Mass Appraisal
- Using a unified model and sample parcels to value properties across a whole jurisdiction automatically, rather than assessing each one on site.
- Single Tax
- The Georgist ideal: tax only land value and abolish all other taxes on labor and capital.
- Natural Dividend
- The high rents extracted from natural resources (such as oil), captured for all citizens.
How to listen
Economists who care about housing policy, urban planners, real estate developers, and investors and policy researchers who want to know whether the land tax is worth betting on.