Killer Arguments Against LVT, Not (488)

@benjit14 (aka BenJamin’) replied on Twitter:

Of course we can internalise the cost/benefit of NIMBYism by taxing location rents at 100%. That would solve housing issues without the need to build a single extra home. Thats what good econ looks like. Bad econ only sees the supply side.

Floppy haired developers’ friend @K_Niemitz countered:

This is why I mute Georgists. Georgism is the belief that you could fit the entire population of Britain into one single house, provided the ground underneath that house is taxed.

BenJamin’ clearly said “without the need to build a single extra home”, I’m not sure how mentally deficient you’d have to be to interpret that as “we’d all fit into one single house”.

Meanwhile, back in the real world…

1. Population of England & Wales = 56.1 million.

2. Number of bedrooms in England & Wales according to the 2011 Census = 63.6 million. The ONS explain that there’s a big margin of error here, it’s based on sampling. How do you define ‘bedroom’? What about Dad’s study or Mum’s home gym upstairs? What about downstairs rooms that aren’t used much and which could be used as somebody’s bedroom? And the number from the 2021 Census will be higher. But it will do for a start.

Let’s assume three-quarters of the population are adults, and half of those are in a couple (who still get on with each other), if every couple shares a bedroom and ‘everybody else’ has one bedroom each, we would need approx. 42 million bedrooms. And we have 63.6 million, which is an extra 40%, so the average number occupied by couple-family with two kids would be 4.2. I suspect a median family with kids lives in a three-bed semi, and we know there are a lot of people with holiday homes, retirees still in a family home etc.

Do we really have a housing shortage overall, taking “one bedroom each” as a decent base level? Nope. Would LVT go a long way to shifting people closer to the average? Yup. Clearly LVT wouldn’t get us all the way there, but so what? The retirees in a family home who also have a holiday home would be paying for the privilege and the family in crowded accommodation would be compensated, however indirectly. Which was BenJamin’s actual point.

(For sure, you can blame crowded families for not earning enough to pay for somewhere decent or for having too many kids. But if they all earned more and all wanted to trade up, prices would just slip out of their grasp. The misallocation would be barely affected.)