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I'm never sure if people do not see the logical case for price control in a crisis, or if they see it but believe it doesn't apply.
In any case it's probably worth it to share what I think is the (rationalized, sanewashed) reasoning against price gouging. The central example to keep in mind while reading this is a peasant during a famine in 15th-century France.
- Survival is at stake. There is not enough survival goods for everyone.
- Rich and powerful people shouldn't have an excessively easier time surviving than others. Whether or not one thinks that makes sense at society level, it would not be accepted by the poorer majority during the crisis.
- Depending on the amount of stuff available and the level of wealth inequality, survival goods might be bid up entirely out of poorer people's ability to pay. There is no inherent reason why you couldn't end up with rich people eating their full while a poorer majority starve.
- Goods coming from outside the disaster area might or might not help. If the price required to incentivize bringing these goods is higher than the already inflated price of local goods, it won't help at all. If the price is lower, it will help lower prices, but then it will act as a lower floor on the price of survival goods. There might not be enough outside goods coming in to reach this lower floor, and there is no inherent reason why this lower floor could not be too high for a majority to pay anyway.
- Violence is the historical tool to incentivize richer people to accept some hardship they could pay their way out of, in order to let others survive : reduced comfort is less dangerous than the threat of an angry mob.
- While the threat of violence makes it less worthwhile (because more risky) to bring relief from outside the disaster area, without it this relief might not benefit the poorer majority at all, so they have no reason to care.
- Laws against price gouging, and other form of market interference by the state in a crisis, are deemed less disruptive than riots, so they are used as substitute when possible.
I think the above reasoning mostly holds for the central example it's meant for. It seems obvious that all the differences between 15th century France and 21st century America push in the direction of making it less likely to be correct. But it's not obvious (to me) that these differences are enough to invalidate the argument entirely - I haven't really try to model it properly, so I don't have a strong opinion one way or another.
But I'm not sure it matters politically, since it's not like this is what price control enthusiasts think when they argue against price gouging, the logic has been baked into cultural expectations of 'fairness'.
Back to your proposition, I think if anything it would make things worse. From the point of view of someone on the streets during a disaster, the state would just be another rich and powerful actor driving up the cost of basic goods.
The problem is that it would reduce the incentive to develop property for large developers, since their tax bill would go up if they developed adjacent land.
I guess I'm arguing about the zero point. Your frame is that the current situation where large developers develop something, the surrounding land's value goes up, and this profits the developer is the default, and thus LVT brings us below the default, since it balances the uptick in land value with more taxes. My frame is that the default for everyone else is that one cannot benefit from the increase in surrounding land's value from one's own actions, the current way we manage land ownership enables large landowners and companies to do it but that's not the norm, and LVT just brings large landowners and companies back to the same default as everyone else.
I agree that on purely consequentialist grounds the result is the same, that this will be a pressure towards fewer buildings (or it gets rid of a pressure towards more buildings), but I think the frame matters for what our default reaction will be, especially in the absence a of good comprehensive model of what would happen to land use under LVT.
Also on purely consequentialist grounds, a situation where large landowners have an advantage to develop their land over everyone else seems like it risks all land belonging to a few large landowners in the very long term, which doesn't seem desirable.
But if the LVT slows down land development even more than our current rate of development, and the only upside is that rich landowners have their wealth redistributed, then this doesn't seem that great to me.
Note that the idea is that LVT would incentivize more development, and this is only an argument that it wouldn't in one situation (for large landowners). If the LVT's advocates argument holds for small landowners, the overall effect on land use could still be positive. Overall I agree that we can't just assume the effect of LVT on land development would be positive without a better model to justify it, though I don't think we should assume it to be negative either.
Another issue with the LVT is that it acts as an implicit tax on nearby land development.
Isn't this the whole point ? One of the main goals of LVT, as I understand it, is to prevent people from leeching off positive externalities generated by others without providing anything themselves, like a shitty apartment building that still charges high rents because of good nearby amenities/infrastructure.
The downside you mention is about how LVT would also prevent people from 'leeching off' their own positive externalities, like the Disney example. Assuming that's true, I'm not sure why that's a problem ? It seems to be the default case for everyone. A restaurant doesn't capture the full externalities from the neighborhood having a restaurant nearby, not unless it's the only restaurant around and generally not even then. A friendly neighbor doesn't capture the externality from the neighborhood having exactly one additional nice person in it. Neither of these things are realistically feasible, so why should we care that LVT would also make it unfeasible for Disney to get the full externalities from building Disney World ?