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Transnational Thursdays 23

This is a weekly thread for people to discuss international news, foreign policy or IR history. I usually start off with coverage of some current events from a mix of countries I follow personally and countries I think the forum might be interested in. I’m increasingly doing more coverage of countries we’re likely to have a userbase living in, or just that I think our userbase would be more interested in. This does mean going a little outside of my comfort zone and I’ll probably make mistakes, so chime in where you see any. Feel free as well to drop in with coverage of countries you’re interested in, talk about ongoing dynamics like the wars in Israel or Ukraine, or even just whatever you’re reading.

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First cities learned that taxes on new construction were an easy way to get money without upsetting current residents. A new detached home typically has $186,300 (135k USD) in development fees*

WTF. Are Canadian governments literally retarded? Obviously they get that taxes aren’t an infinite money tap and have second order effects, it sounds like they picked these second order effects because they knew that.

it sounds like they picked these second order effects because they knew that

Non-residents can't vote in municipal elections; native residents have, in essence, already paid the tax by virtue of having a house, since the cost of new construction being artificially raised by that tax in turn raises the value of your home. Which also effectively raises property tax revenue without having to suffer the optics of having to raise the rate (and might even allow the city to lower it, which residents will remember for a long time).

Of course, that's also a massive tax increase against the children of Boomers, since especially with life extension that generation won't be able to inherit the house until they're in their 50s or 60s (women have hit menopause by that point). Obviously the solution is to raise taxes on existing residents, but a democracy that does this won't survive past the next election even if a significant minority agree that fixing the taxes is badly needed.

(Honestly, COVID responses were this dynamic compressed into the span of 2 weeks: people over 60 are scared of the flu, so they impose a 20% inflation to have a 0.001% less chance of dying of it that affects liquid assets, but not solid ones, like land. So prices jump up yet again.)

But why fix the problem for the people living in the country already (who aren't getting rich) if we can just import people who are already OK with living in conditions/environments far better than their home country? It's all in service of this fucking bubble; I wonder if we've passed the South Sea Company in its scope yet?

They do this everywhere they can. The justification in Sweden the municipalities use is that they have to sell the land at "market rate", which of course they are in complete control of...

It seems like the presence of places which do not do this then requires explanation.

I'm not aware of any place where the explanation isn't very simple and also not replicable for places this happens, especially since you become ever more path dependant as the market inflates.

More strictly, I'm not aware of any place that has fixed this issue though policy, and for good reason. The incentives are very strong for everyone that gets a say.

How do red states in the US(which are democracies and not particularly concerned with making life better for renters and young people at the expense of old people and owners) avoid this trap? For that matter, how does France?

During the early industrial era all the old buildings got covered in soot. Most countries tore down the old ugly buildings. France realized that they could power wash them and restore the old lovely architecture.

So the downtown core became a place for rich people to enjoy. When brining in refugees and poor migrants Protestant countries got this idea that the new arrivals deserve to live downtown. France was more elitist and decided to build towers in the suburbs for them.

So there's a long tradition where the government has the power build high rises in cities around the metro core.

Additionally people in Anglo countries refuse to think about HBD crime theories. So, at least in Toronto, people commonly believe that high rises cause crime. It ends up being sort of true, because lefty activists believe it's wrong to evict drug dealers and addicts. As a result it's impossible to build a new high rise and fill it with well behaved residents who happen to have a median income.

So French elitism traditionally protected the downtown while ensuring housing gets built outside the core.

In red states it's just that there is a lot of cheap land and no scenic views to be disrupted. So people don't fight new development.

In my experience of living in multiple Red areas that were (or are) undergoing development booms, it's that Red Tribe people generally are effectively YIMBY, or at least YIEBYBINMJTTYWTDWYL (Yes in everyone's back yard because it's not my job to tell you what to do with your land.)

As a very strong example, I once lived in a rural area gradually on the edge of becoming suburban. The state and county has long had a policy of "fence me out" in regards to animals. That is, if I have animals, and you don't want them to wander into your property, then fence me out. You can't make me build a fence, it's my land after all. There was a lot of conflict over this with the newcomers, and eventually transplants pushed to change the law. Locals never tried to block the new development, but they did try to block any changes that made things more restrictive or added rules. Eventually they were outnumbered, and now it's pretty typical city government with your standard NIMBY rules, and the culture I love continues to vanish.

It's one of the many reasons people say "don't bring California with you" when people move from more populous areas.