January 1st 2025 felt like crossing into a milestone year. The stock markets reached new, stratospheric highs, not topped since 2018–2019. New & unconventional monetary policy, implemented after a rapid interest rate drop back to 0 was ineffective, helped avert calamity from the last recession. Property prices soared again, enriching some on paper, but leaving you an eternal renter. You weren’t alone — the balance of renters to homeowners had finally tipped in favor of renters as homeownership proved too far out of reach.
This time would be different, however. Different than 2019 when inflation was disguised mostly in asset prices. What seemed to be a future without inflation appearing in the CPI, proved to be only a momentary lapse, with a strong dollar sucking up relatively cheap imports. When the dollar sank as the current account and fiscal balance went over the edge, inflation rose, and even the most dovish in the Federal Reserve agreed it was time to raise rates — dramatically.
All the while, various movements attempting to address rental price issues started gaining traction. Taxes on foreign property owners were politically popular, but had little effect on the supply of available units. Movements such as Deutsche Wohnen & Co Enteignen in Berlin, advocating outright nationalization of the housing supply were extreme and dangerous, but still made headway in cities with renters, even in neighboring countries. Switzerland, with its direct democracy, even collected enough signatures to put a similar proposal on the ballot. With the proportion of renters quickly rising in the UK, Ireland, Denmark, and the United States, the idea of a land value tax began to seem more politically realistic. Major British political parties had already campaigned for an LVT a few years prior, and Denmark already had one in place, albeit at a low rate.
Various groups long-advocating for an LVT managed to band together, and make a convincing case as an alternative for those pushing for nationalization and direct intervention. However, it wasn’t until the following year when higher interest rates started to bite, collapsing the real estate market, when national governments were strapped for cash without the ability to monetize more debt and were left with few options. Lower fuel tax receipts as a result of electric cars left governments even-less able to pay off their infrastructure bills.
The UK and Denmark passed land value tax legislation, followed by the Swiss, and some German municipalities. North American cities later followed, beginning with Vancouver and NYC. Studies of little-known LVTs already in place in Asia, began to circulate, and Georgists in North America, Europe, Southeast Asia, Australia, and India started to connect further.
Would LVT rates be high enough to resolve economic imbalances before the 2030s? If a land value tax made headway, would the political movement get hijacked by those seeking nationalization and other various extreme or damaging policies? Would anti-LVT groups seeing the ineffectiveness of too-low an LVT rate pressure policymakers to scrap the idea? Would governments just use an LVT as another tax grab without reducing rates on productive activity, giving political fuel to anti-LVT’ers?
It’s important we look to the future to see opportunities and potential allies. By the same token, it’s important to see where conflicting ideologies and movements might be faster or more assertive to act. Most of all, it’s important to synchronize and act in unison with concrete steps when looking at future scenarios.