Ask Prof Wolff: The Landlord Problem

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Patron of Democracy at Work asks: "Does there exist any movement to abolish land-lording? Seems like the existence of landlords is a major part of the problem. Workers are doubly exploited. First, at work where they are not paid what their work is worth, and again, in the home where they are charged more than their dwelling is worth. An alternative could be, in addition to those that own their own homes, cooperatively-owned buildings where the tenants only pay for utilities, maintenance costs, and taxes, and/or a public housing system where housing is operated like a public utility and governed democratically."

This is Professor Richard Wolff's video response.

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Showing 1 comment

  • Edward Dodson
    commented 2022-10-19 13:49:50 -0400
    In a society the laws of which allow for the private ownership of land, the best solution to provide affordable housing is to impose an annual tax on land equal to its potential annual rental value. Such an annual tax removes the potential to gain by speculating in land. Land prices will fall to close to zero. At the same time, housing units up to some value (e.g., less than what might be the value of a mansion) should be exempt from taxation. Why? A housing unit is a depreciating asset, an asset that requires ongoing expenditures for maintenance and heavy expenditures every decade or so for upgrades and modernization. The taxation of housing is regressive and penalizes owners who take care of their housing unit.

    As Professor Wolff indicates there are other models that are based on cooperative ownership, that stress affordability, and treat housing as a basic human right. Community land trusts already exist to promote housing affordability by removing the cost of purchasing land. Ground rents are set to cover costs of running the CLT and to pay any property taxed imposed by local governments. Housing units might be owner-occupied, subject to restrictions on the resale of the housing unit either to some dollar amount (e.g., replacement cost, less depreciation) or to households with incomes no greater than some percentage of area median income. Or, housing can be set up as a limited equity cooperative or as rental units with rents set based on actual costs of operation, with subsidies provided for those households with low and very low incomes.

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