How can the government better support economic growth and job creation in your opinion?

By suppressing rent through land value capture which can be achieved through multiple methods: by changing freehold titles to leasehold titles (i.e. land nationalization), by levying a capital gains tax on the capitalized location value in lieu of annual property taxes or by setting aside some vacant and undeveloped freehold land, via land banking, for land trusts, housing co-ops and/or limited equity condos that retain ownership over the lots and parcels, that are leased to residents. As I mentioned in The Land Value Capture Mechanisms We Already Have, this last option is already used sporadically across the U.S. while the first two comport with the Singaporean model which as I mentioned in Singapore Has Nice Things Because of Land Value Capture includes not only a public leasehold system on 85% of land managed by a publicly owned corporation and town councils, but also a development charge on freehold land base on the evaluated increase in land value from the date that the approved planning application is secured. Leasehold land is subject to a development premium which is evaluated as the difference between the value of the property before the approved change of use and terms and the value of the property after the changes of use and terms of the lease. Of course, Singapore does not capture anywhere near the full location value change and maintains this form of taxation more so as a means to have the most efficient form of revenue collection, with the least amount of deadweight loss that comes with other taxes on wages and capital, than out of a desire to keep property affordable in perpetuity.

Of course, the government, by which I mean mostly local government, could also solve one of the most obvious problems in economics, the U.S. housing shortage, by GTFO the way: permitting not only more housing but denser and smaller housing that all income strata can afford to own. Let’s be honest, not everyone can afford a minimum 1200 square foot single family house so making that the predominate option, other than paying rack rents to a landlord, will price people out of both the local housing and job market creating opportunity gaps that restrain future business growth. The liberalization of zoning restrictions should ultimately be done concurrently with land value capture. Of course, even just building more housing that doesn’t comply with single family zoning, minimum square footage and minimum lot size requirements would pose a threat to the entrenched class interests of existing homeowners most of whom would react with typical NIMBY ire. Imagine having to explain to them that we not only need a more diverse spectrum of housing options but that their property values are in need of deflation which inevitably happens when you make any asset less profitable. This sort of reckoning will likely not occur until the electoral majority are reduced to renters. Until then progress will continue to be restrained by real estate speculation and suburban sprawl.