&gt; The price of property and rent in popular places will be what the market will bear. So with tax, the rent would stay the same. Price of apartments would go down, because buyers need to pay the tax, so they cannot afford as much.<p>You are ignoring that capital flows to the most efficient RoI it can find.<p>If rents remained the same, the RoI would drop [due to the tax increase] and it would lead to land abandonment. Land abandonment is one of the largest practical issues with a land value tax.<p>Increasing housing density isn&#x27;t efficient when the practical value of the land is low. Yes, it&#x27;d be great in SF. But what about Athens, GA? It&#x27;d be a terrible idea there. Building upwards isn&#x27;t free, either.<p>Yes, its popular with a certain class of economist who makes certain assumptions but the real world behavior of landlords isn&#x27;t what you think it is.<p>------<p>Let us say, for the sake of argument, that you are correct.<p>$800 rent, tax burden increased by $600 a year.<p>So everyone unloads their real estate holdings because they are no longer profitable. Prices of land plummet as its abandoned as unprofitable, reducing tax revenue.<p>If you build alot of high density housing, you need less land, so as such housing finishes...everywhere that is &quot;far&quot; from the new high density area drops in value again. The cycle repeats until the new normal is stable. You&#x27;ve suddenly restructured every major city in the affected area.<p>However, you&#x27;ve created so much abandoned land that is converted to farming that your tax revenues have dropped. So you have to raise taxes, the cycle repeats.