The following two points are contradicting each other:
In theory at least, Georgism is correct that a land tax will not cause rents to rise.
Land will become cheaper to buy, and there will be more pressure to use it in an economically viable way.
I believe the 2nd is correct, whereas the first one isn’t. The extra pressure will result in real rents rising. If the land is under-utilised today (e.g., empty, or a garden where nice big house could stand) the maximum possible rent is not being charged. Possible reason might be that the current land-lord can’t make the required capital investments (building the house) needed to extract the market rent, yet he might not want to sell (speculation on future prices).
This will result in following two effects:
The market rent will go down because the pressure on effectivity will increase the supply.
The average rent charged in practice will go up because of the land where the market rate isn’t extracted today.
The following two points are contradicting each other:
I believe the 2nd is correct, whereas the first one isn’t. The extra pressure will result in real rents rising. If the land is under-utilised today (e.g., empty, or a garden where nice big house could stand) the maximum possible rent is not being charged. Possible reason might be that the current land-lord can’t make the required capital investments (building the house) needed to extract the market rent, yet he might not want to sell (speculation on future prices).
This will result in following two effects:
The market rent will go down because the pressure on effectivity will increase the supply.
The average rent charged in practice will go up because of the land where the market rate isn’t extracted today.