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RE: [LandCafe] Re: Land value UK

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  • David Reed
    @Dave W Had a conversation with somebody at VoA yesterday.Nice bloke but apparently they don t keep aggregate figures for the totality of UK land values with
    Message 1 of 46 , Nov 28, 2012
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      @Dave W Had a conversation with somebody at VoA yesterday.Nice bloke but apparently they don't keep aggregate figures for the totality of UK land values with subdivisions for agriculture, residential  etc. 
      @HP  Your first sentence is so good ,it should enter general circulation.In the UK everybody half awake is aware that the landowning monopoloist/cartel developers are deliberately not building houses to satisfy demand as this would flood the market and crash prices ,for already built houses as well. The only argument is how to get them to stop hoarding.The state of play is indicated by this article in The Spectator 19 Oct 2012:Headline " Exclusive No10 advised to punish land hoarders"
      "Jake Berry who has worked as PPS to Grant Shapps" (was Housing Minister)"..has written a paper for Number10, which Coffee House has had exclusive sight of.It argues that developers who land bank sites "(a phrase in common parlance now)" should be penalised for doing so".
      I could give any number of quotes and instances of this non-supply  from Operation Pathfinder in the North of England where they knocked down houses to put prices up ,to Michael Gove (now a Cabinet member) refusing to believe that large scale owners  would ever leave premises empty to maintain rent levels.But the usual naysayer would n't take any notice anyway most likely.

       : LandCafe@yahoogroups.com
      From: harrypollard0@...
      Date: Mon, 26 Nov 2012 21:38:06 -0800
      Subject: Re: [LandCafe] Re: Land value UK

       
      Roy,

      The monopolist achieves his high return by refusing to supply demand. 

      In the case of land, or more specifically locations, he has the added advantage that people must have access or they do not survive. So he can run up the Rent until paying more is impossible for the prospective user.

      Rent is supposed to be a measure of the advantage that attaches to a location. The payment of Rent does not come from wages. You get $100 a week advantage to your location and you pay $100 a week in Rent – a zero-sum. However, the landlords ability to keep running up the price means the extra paid – which I call rack-rent – comes from wages. As we know, this pressure on wages drives them down until those at the bottom are surviving at subsistence levels.

      But then we collect the full rent from every location.

      A large amount of urban land is vacant or underused. Perhaps the underused amount – slums and suchlike – is more important than the vacant. In any event, many landholders will be unable to continue holding their land with the land rent payment pressing on them. So, they will have to build or abandon. The once highly restricted market for land will become open and available.

      This will be particularly noticeable as one gets away from the city center. The emptiness in the city center will tend to fill up first. 

      Modern cities tend to spread in all directions as entrepreneurs search for cheaper land. With Rent collection the city will contract although its political boundaries will remain.

      Rents in the center will naturally soar while the outer parts of the city will become marginal - important because these marginal areas will set Rents across the city. It should be noted that this marginal land is likely to be quite productive.

      The major result of so much land becoming available will be to end the practice of rack-rent. One cannot hold out for exorbitant Rents with lots of competitive locations available. This competition will ensure that location Rents will soon equal the actual advantage provided by the surrounding community.

      Although central Rents will soar as downtown land is fully used, they will also be reduced by the margin moving toward the center. As you know, rent is measured from the margin.

      This is why I suggest that we cannot know how much rent there is until we collect it but that's another point.

      Harry



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      On Mon, Nov 26, 2012 at 12:28 PM, roy_langston <roy_langston@...> wrote:
       

      --- In LandCafe@yahoogroups.com, Harry Pollard <harrypollard0@...> wrote:

      > The land-values we now measure are monopoly rack-rents with not a little "collectibility" values added in.

      The land market is always a monopoly market, and land rent is always a monopoly rent. Rack-rent is a different phenomenon: charging tenants rent for fixed improvements they have made themselves.

      > These monopoly values would disappear with a full Rent collection, leaving us with ?.

      No, they would not disappear, as the monopoly aspect would remain. They would be rearranged somewhat, but would be unlikely to change much in the aggregate.

      -- Roy Langston




    • roy_langston
      ... It is held out of use in the hope of rezoning windfalls, which permitting development and use at the current permitted density would likely scotch for
      Message 46 of 46 , Dec 1, 2012
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        --- In LandCafe@yahoogroups.com, Harry Pollard <harrypollard0@...> wrote:

        > There is an enormous amount of urban land of all values which is presently held out of use at rack-rent (or higher) prices.

        It is held out of use in the hope of rezoning windfalls, which permitting development and use at the current permitted density would likely scotch for decades. As long as the long-term economic growth rate exceeds the tax rate, owning land increases the owner's net worth, so there is no reason to take a chance by permitting productive use.

        > Such holdings would become
        > available to producers and other users with adoption of full land Rent
        > collection and Rents would topple to a point where they would accurately
        > reflect the advantage provided by the surrounding population.

        Rents already reflect that advantage, so they would not topple.

        > You agree with me that present land rent is a 'monopoly rent'. I happen to
        > call it rack-rent because that seems to me to be an appropriate term.

        It's not appropriate, because what you are talking about is in fact rent.

        > Your peculiar opposition to this seems to stem from your mistaken belief that
        > with full Rent collection, rack-rent would remain. In fact, as I have stated, it would disappear.

        No, YOUR peculiar theory stems from your mistaken belief that rent is rack-rent.

        > I don't know where you got your land-value taxation ideas from, but you treat it as simply a good way to tax.

        My UIE proposal proves that claim false. LVT is essential to equal human rights.

        > The real intention of collecting Rent
        > (popularly, land-value taxing) is to produce a genuine equality of
        > conditions for all, replacing the present rigged economy which condemns the
        > less able to poverty and the more able to a lifetime of paying rack-rent.

        No, the real intention is to restore the EQUAL RIGHTS of all to life, liberty, and property in the fruits of their labor, relieving the poverty of the less able by ensuring they have free, secure access to economic opportunity, and enabling the more able to rise as high as their productive contributions will carry them by relieving them of the burden of supporting the greedy, privileged, parasitic landowning overclass in exorbitant luxury. I am much more aware of that intention than you, as your opposition to my UIE proposal shows.

        > The object of full Rent collection is to take the first step towards
        > 'Liberty and Justice for All'. Reducing this to a simple tax advocacy diminishes its importance as a genuine reform.
        >
        > But, you probably know that.

        I do indeed.

        -- Roy Langston
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