[UI confusion led me to think this was a reply in a nyc specific comment chain. It’s still relevant but less perfectly so.]
You land-tax to make sure the most efficient buildings end up using the land. But the construction industry in towns like SF and NYC is mostly constrained by what you can get approved, which comes down to connections and what politician-pleasing giveaways you have to tack on.
And expensive downtown Manhattan land has lots of potential competition, but with transportation infrastructure costs running $2 billion a mile (!!!!!)
That will merely increase the carrying cost of the land and ensure that only rich people can live there, and that's true even if you break it up into smaller units on each unit of land, it's just higher cost smaller units.
There is NO one single point of influence that works the way we want it to, and that starts right at the 2nd-order effects, not even tertiary effects.
My understanding is that it is the next level of knock-on effect.
So, maybe an example of turning on & engaging the motor of a boat on a lake would be the primary effect is the boat accelerates, the secondary effect is the wave/wake created, and the tertiary effect is the wake bouncing other boats and it's effects on shore.
So with this land tax example, the primary effect of the tax is increased revenues for the city and costs for the landholders, the secondary effect would be restring ownership/renters to a wealthier set of people, and the tertiary effect might be changes in the mix of transportation used like more private cars and less public transport...
I think there may be a disconnect here (and I apologize if there isn't; this is not my wheelhouse)...
1. Some people talk about "land tax" meaning a tax on the value of _only_ the land. So you pay a tax based on the land, but not anything built on it.
2. Some people talk about "land tax" meaning a tax on the value of the property if you were to sell it; including any construction on it. This is the common situation in the US, to the best of my knowledge.
The former, taxing _only_ the land, is what (I believe) a lot of people are talking about when they say it will promote more/better construction on the existing land. Because you're paying the same tax regardless of what is built on it, so build whatever it the most useful for you.
These all assume that the cost of new development is the building/development itself. It isn't. It's the land.
The correct solution to this is a land tax based on the assessed value of the land.