Again, both of these classical economists are assuming perfect markets and non-sticky rent. In a perfectly rational world where prices are constantly updated as the landlord and tenant are perfectly rational beings who evaluate how much the land is worth to them on a minute-by-minute basis, then yes this theory holds.<p>In a world where there are significant search and movement frictions, where subsidized housing exists, where landlords and their tenants have relationships beyond renter&#x2F;rentee, where a home&#x2F;building has value beyond its ability to be slept in, these theories will not hold.<p>My hypothesis is that if an LVT was levied in SF, rent would go up by at least 50% of the value of the LVT as a direct effect of the tax.