So the whole article circles around this concept: "Land is a natural commons — it belongs to everyone, and that land value (rents) should be recaptured by the community, who create the value in the first place." The rest of this is my understanding, and me filling in some gaps from things I know, or think I know, from elsewhere.
In the case of buying every rented property, it's straightforward investment, at the simplest level. The state buys the property, and rents it out to tenants. Once the rent paid has covered the cost of buying the property (which will be ~30 years in most places, but that's fine for a body the size of a state), it's then a revenue source. Because the land is not going to disappear (unless it's coastal; see Gentle Decline, and that's avoided by not including coastal property in this scenario), it's a permanent revenue source, in the same way as it is for private landlords. That means that taxes on people can be reduced in proportion. At a large scale, this could mean that tax paid by most individuals almost disappears, hence the taxpayer benefits enormously, and there's no loss to the state. There isn't even a loss to the landlords who owned the properties, because they got market value for their places, and the only thing taken away is their ability to effectively, tax their tenants. They will probably have to go work for a living instead, and that's probably a net benefit to everyone too.
Since rent will no longer be controlled by landlords who want to get the maximum money out of it, but by the state who are looking only to pay for part of what they spend (commercial taxes, VAT, road taxes, council taxes, gift and inheritance, capital gains, and some income taxes will still remain, so it'll only ever be part), there will be fewer or no increases in rent (states are much happier with long-term guaranteed income than short term gain). Inflation will likely drive rent down in relative terms. Renters will no longer have to deal with the situation where they're evicted when the landlord wants to sell or "renovate" the place. Also, renters' rights will no longer be constrained by the political and lobbying pressures brought to bear by rich landlords (some of whom are actually in the Councils, parliaments, etc, at the moment).
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Re: A new land contract
Date: 2020-07-14 10:07 am (UTC)In the case of buying every rented property, it's straightforward investment, at the simplest level. The state buys the property, and rents it out to tenants. Once the rent paid has covered the cost of buying the property (which will be ~30 years in most places, but that's fine for a body the size of a state), it's then a revenue source. Because the land is not going to disappear (unless it's coastal; see Gentle Decline, and that's avoided by not including coastal property in this scenario), it's a permanent revenue source, in the same way as it is for private landlords. That means that taxes on people can be reduced in proportion. At a large scale, this could mean that tax paid by most individuals almost disappears, hence the taxpayer benefits enormously, and there's no loss to the state. There isn't even a loss to the landlords who owned the properties, because they got market value for their places, and the only thing taken away is their ability to effectively, tax their tenants. They will probably have to go work for a living instead, and that's probably a net benefit to everyone too.
Since rent will no longer be controlled by landlords who want to get the maximum money out of it, but by the state who are looking only to pay for part of what they spend (commercial taxes, VAT, road taxes, council taxes, gift and inheritance, capital gains, and some income taxes will still remain, so it'll only ever be part), there will be fewer or no increases in rent (states are much happier with long-term guaranteed income than short term gain). Inflation will likely drive rent down in relative terms. Renters will no longer have to deal with the situation where they're evicted when the landlord wants to sell or "renovate" the place. Also, renters' rights will no longer be constrained by the political and lobbying pressures brought to bear by rich landlords (some of whom are actually in the Councils, parliaments, etc, at the moment).