Thursday, Oct 26, 2006

After the crash, things might be different next time

www.progress.org: After the Housing Bubble Bursts, Fix It!

I might be getting ahead of myself but for those interested in economic theory this article presents "geonomics" as a way of avoiding the extreme housing booms and busts in the future.

Geonomics replaces taxes with land dues and replaces subsidies with rent dividends. Once implemented, geonomics changes the dynamics of the land-price cycle and the whole economy.

To pay the land dues, owners use their land efficiently; owners who had been speculating get busy and develop. No longer allowed to tax anything that moves, local governments, too, which presently let acres of abandoned urban land and buildings lie fallow, get busy, too, and make sure to get those acres into the hands of ambitious owners wholl pay land dues. More locations put to use and more buildings put up increases supply, which dampens price.

Posted by sold 2 rent 1 @ 11:14 AM (491 views)
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5 Comments

1. paul said...

Yeeeeeah.

I'm not so sure to be honest. It seems like absentee landlordism.

Thursday, October 26, 2006 12:26PM Report Comment
 

2. sold 2 rent 1 said...

Paul,

Not sure what you mean by "absentee landlordism"

The whole problem about piling money into property is the money is tied up in assets and not being used to produce goods and services that create real wealth. This "Geonomics" concept forces every landowner to think twice about holding land for any speculative reasons. If land is costing you money every year and it is not doing anything useful then you might think about selling it to someone who has got a use for it.

This idea would stop Tesco holding huge land reserves to prevent the competition building new supermarkets.

Whe GB said "No more boom and bust" he overlooked this radical way thinking. Making the B of E independent was a step in the right direction. But as we are seeing now this has only delayed the boom and bust cycle and not solved it.

Thursday, October 26, 2006 05:13PM Report Comment
 

3. paul said...

Taxation does the same thing when implemented effectively. Look at the vacant possession orders scheme which is in force in some counties - thjis kind of thing should be extended nationally to discourage speculative landholding.

Thursday, October 26, 2006 07:02PM Report Comment
 

4. magnifico said...

In some other European countries there is a tax on Property sold less than 5 years after purchase ( circa 3 to 5 times more than if sold after that time).
What a simple, great idea, and one that would have kept things into perspective over here.
Not only that, taxes on purchase of property from non-citizens ( people not born in the country)or non- residents (people who can't prove that the purchased property is going to be their main residence for the next two years) are ridicously higher than for their counterparts.
I'm talking about modern European Countries who have been EU members for yonks, but whose governments don't fear being accused of interventionism or worse protectionism, when the good of their country is at stake.

Thursday, October 26, 2006 08:22PM Report Comment
 

5. Nohpc said...

It would be ridiculously unfair to charge non citizens higher taxes on property than citizens. There seems to be a common anti anyone who is not british feel on this website and I don't like it. If somebody comes here and works and buys property they are contributing to the wealth of the country more than most people already. They are adding skills, paying taxes, hopefully having children who will go onto do the same. Without immigrants this country will turn into a nation of geriatrics. I am a doctor and we already see this in our hospitals. Britain needs to get younger people in at all costs to counter act this otherwise there is no future so stop talking about preventing it. And for the record I am British and not an immigrant.

Thursday, October 26, 2006 11:15PM Report Comment
 

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