29 September 2010

Some notes on a housing policy

On Walter’s post on housing: my suggestions

Mortgages of over 50 percent of purchase price prohibited. Result: collapse in demand and of land prices.

Building of public housing for rent. Rent level to recoup building cost over 25 years.

Public housing made available to pre-defined groups (e.g. workers earning under 15K, workers with children, etc.)

How to ration within the group? Through money: the one who buys the most expensive saving bond, gets the tenancy. Housing bond cannot be redeemed during tenancy. Housing bond used to provide credit for new house building.

New Land tax. 1% of property value per year. Every person gets a land tax credit of 1000 pounds.

E.g. couple in 180 000 house. Tax: 1800; credit 2000: land tax nothing.

Person in 450 000 house. Tax: 4500, credit 1000 – Land tax 3500 per year.

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