Land and its value

A key issue the New Garden City Alliance hopes to raise in everyone’s awareness is value of land.
See this letter from one of our key Alliance members, the economist Shann Turnbull:

Making cities more efficient, fairer & affordable: Lessons from Garden Cities
To: Economist

Letter for publication

Dear Madam/Sir
Your cover story of April 14th on “Space and the City” with its briefing on “Land-shackled economies”, identified the “huge cost” from “poor land use in the World’s greatest cities”. A fundamental cause of the “huge cost” is not just regulation as suggested in your briefing but how property rights misallocate urban wealth.
A more efficient and equitable system of ownership would recognize that urban wealth mainly arises from two different types of investment.
– One type is the investment by the community in servicing each site.
– The second type is the building on the site.

Greater efficiency and fairness would arise by separating the market value of the buildings from the market value of their sites.
The equity of site values could be held mutually in a negotiable form like a Real Estate Investment Trust. A stapled but negotiable equity in dwellings and buildings at any level above the site would be held in the form of a “Strata Title” developed in Australia. Any market transfers of strata titles would allow the REIT to capture back a share of site values for all residents.
Reducing the “huge cost” of the existing system creates compelling benefits for residents to vote for the conversion of existing title deeds into the duplex system outlined above. What is required is political leadership to explain to residents how all citizens competing for urban space and services can obtain equity in the values that their occupation helps create.
Legislation could be used to allow citizens to requisition local referendums for their communities/suburbs to adopt duplex property rights. Bottom up democratic local decision-making could then directly reduce a major source of inequality identified in your article. It would also reduce the cost of housing.
Yours faithfully

Shann
(Co-founding member: New Garden Cities Alliance http://gardencities.info/ )

References:
Lewis, M. & Turnbull, S. 2011, ‘The Cooperative Land Bank: A solution in search of a home’, http://communityrenewal.ca/co-op-landbanks,
Turnbull, S. 2010, ‘Self-financing Urban Development, http://ssrn.com/abstract=1113603

Shann Turnbull PhD; Principal: International Institute for Self-governance
Co-founding member: Sustainable Money Working Group (UK)
PO Box 266, Woollahra, Sydney Australia, 1350
Ph:+612 9327 8487; Cell: +61 (0) 418 222 378
Skype and Google ID: shann.turnbull
Bibliography/CV: https://independent.academia.edu/ShannTurnbull

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