Currently residential real estate is predominantly taxed based on its estimated market value. Ad valorum taxation stems from the colonial era when an acre of land far from the Atlantic Ocean was worth less than an acre of land near the Atlantic Ocean. Ad valorum taxation made sense when getting agricultural goods from the hinterlands to coastal city markets was very difficult and expensive. In 2021, ad valorum taxation creates a great incentive for local governments and others to make residential real estate very expensive. This is clearest in California, where it may cost $700,000 to add a new apartment...
