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How would it work when the supply of land zoned for residences is inelastic? What stops a large investment fund from buying everything in a prime location, doubling the declared price and leasing the properties back to their owners? Yes, theoretically people could coordinate and wait it out, but good luck doing that in practice.
In such a case we are talking about incumbent landholders who did not assess their property as high as it is theoretically worth because they did not wish to pay higher taxes. The purchasing firm will take a relative loss in cash flow by setting it at that higher assessment (and remember, higher land taxes are not passed on to tenants, so even if the old residents move back in their rents will just be their previously unrealized imputed rent) and are presumably willing to do so because they believe they can make more money than the previous incumbents even given higher taxes, which requires some kind of productive change in property use, which entails more efficient allocation, which is largely the point of COST. In any case, it's interesting many of the critiques of Radical Markets take the form of "what if rich people buy out xyz?" when it is not clear what it even means to be a rich person in such an economy, when they don't own anything in the traditional sense of the term.
They didn't want to pay higher taxes because they lived on it and didn't derive any profit from it beyond living close to their workplace.
For a more concrete example, let's say there's a large factory and a town that is mostly settled by people who work for this factory or provide services to the workers. All the land around the factory is zoned for agriculture. Every house is owned by its residents, is worth $100K and everyone pays $1K in property taxes.
Company X buys every piece of residential property in the town for 100K, sets the new valuation at 300K and offers to rent them back to the former owners for $13K a year, with every house paying them $10K a year, 10 years to break even
The owners have three options:
Option 3 sounds like a perfectly rational way to punish Company X for trying to squeeze, but this depends on coordination between the former homeowners. If one third choose option 1, Company X immediately breaks even and can sell the rest at any price. If one quarter chooses option 2, Company X will not be losing money on this venture and can slowly deal with the rest of the homeowners. And if rezoning is hard or impossible, it's not even an option.
And what's worse, none of the options actually improve the productivity of the properties.
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I think the first answer is "zoning reform". If it was as trivially easy to spam new housing as YIMBYs would like it to be, a would-be monopolist would be chasing an ever-moving target.
I think the second answer is that even in the current environment, there is a lot of land. It would take absolutely insane levels of invested capital to build a portfolio that has anything approaching market power. Very localized market power would hopefully be mitigated by (1), as you can just go down the street some number of miles and build more, but the option to move to the next city is a pretty decent escape from monopoly. We've already seen plenty of less-than-super-money-loaded (i.e., not tech) companies flee from the high costs in California locations (just due to NIMBY, not even self-assessed-tax-derived monopoly). It definitely requires them to take a one-time hit, but these are the forces that move the system toward equilibrium.
I think the third answer is that the homeowner should, in theory, assess their property at a value that would actually sufficiently compensate them for the move. That is, it should include their moving costs, the cost of an alternate home in an alternate location, and whatever inconveniences come with that alternative. This is, of course, in theory, and it would be quite difficult to assess in practice. If done appropriately, it would be paired with significant reduction in tax rates, as valuations would be significantly higher than current purchase prices. Of course, Weyl's ilk aren't actually motivated by assessing things properly, so they'll immediately defect and jack rates up to be punitive toward anyone with wealth/assets. This is the real reason why such a scheme is not feasible; there is no likely political commitment to using this tool in a way that would actually be beneficial to a market economy rather than highly detrimental. I'd be much much much more concerned about this than investment company monopoly.
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