> Those industries (or existing homeowners, for housing) are growing obscenely fat and rich.
The problem is, sure, your house that your parents built for 100k in the 80 is worth 1 million dollars on paper, just because of urbanization. But that "wealth" is pretty much useless, at least as long as you reside there it can't be realized. So you either have to sell off the existing home and find a new place to live which only makes sense if you move to a drastically lower CoL area, or if you're of old age you may get away with living off the equity by getting a HELOC backed by the home - the downside of that is of course that your children won't have much of an inheritance left.
That's also why taxing real estate on land value is a very, very bad idea - land values rise exponentially or at the very least far faster than wages, which forces rent hikes for renters and forces off old established businesses and ordinary people.
> That's also why taxing real estate on land value is a very, very bad idea - land values rise exponentially or at the very least far faster than wages
If you tax real estate, owners of real estate will make sure it's not overvalued by encouraging more real estate to be built.
Land values have risen faster than wages due to growing wealth inequality - whereas as land value tax does not pass, empirically speaking, through to renters - because there is a fixed amount of land. In other words higher land value taxes could have helped mitigate or even cancel the the disconnect between wage and housing costs that we have become afflicted by in this upward transfer of wealth.
But consider the PoV of an average-ish (say) 65-year-old homeowner. He knows he could live to 95 or so, that medical costs go up far faster than the official US gov't inflation rates, and that being in a nursing home (which he might need for 5+ years) is already ungodly expensive. And that the thundering herd of older-than-him boomers may have trampled Social Security and Medicare to death before he starts really needing those.
He ain't got $10M's in other assets, to say "whatever; I can afford it".
The "value" of that house, and the idea that it could somehow keep appreciating far faster than inflation - those things are really, really important to that homeowner.
The problem is, sure, your house that your parents built for 100k in the 80 is worth 1 million dollars on paper, just because of urbanization. But that "wealth" is pretty much useless, at least as long as you reside there it can't be realized. So you either have to sell off the existing home and find a new place to live which only makes sense if you move to a drastically lower CoL area, or if you're of old age you may get away with living off the equity by getting a HELOC backed by the home - the downside of that is of course that your children won't have much of an inheritance left.
That's also why taxing real estate on land value is a very, very bad idea - land values rise exponentially or at the very least far faster than wages, which forces rent hikes for renters and forces off old established businesses and ordinary people.