Oh, this idea will put some undies in a bunch. Starting with the Duke of Westminster.*
From Noēma Magazine, October 26:
Landlords have made a fortune on climbing land values. What if land was held by the public instead?
Berlin residents recently voted for a bold change to the city’s housing landscape: the transfer of more than 200,000 units of housing to public ownership. Though the referendum is nonbinding, the move raises a question that’s resonating in a world of rising rents: To whom do the fruits of urban growth belong? This question becomes more salient when you consider how much of the wealth captured by private landlords in cities is actually created by the public.
Land’s value — and what can be charged for renting property on that land — has much more to do with its location and productivity than it does with any specific improvements landowners have made to it. Writing about agricultural land rents in the 18th century, Adam Smith noted that “the price paid for the use of the land is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take; but to what the farmer can afford to give.”
And there is no real estate that is more productive or desirable in developed countries than urban land in growing cities, where job growth is increasingly concentrated. Housing shortages in these areas have caused rents to soar, and the propertied class has experienced a decades-long windfall.
Take Berlin as an example. The 200,000 housing units that voters want the government to purchase — making up about 11% of all rental units in the city — used to be publicly owned and were privatized in line with international trends toward liberalization over the last quarter of the 20th century. In the intervening decades, Berlin faced a housing shortage and rents climbed.
While privatization did little to spur the necessary development to meet demand and stabilize prices, it did enrich private landowners. According to a recent report from Berlin-based real estate firm Guthmann Estate, rents have surged by 13% in Berlin in the past 12 months alone. Activists pursued the expropriation measure after Germany’s high court found Berlin’s 2019 rent caps unconstitutional.
In American cities, too, a growing share of renters are competing for a largely stagnant pool of rental housing. For decades, urban counties have been the source of most U.S. population growth, while rural communities have aged and emptied out — and 2020 census data shows this trend is only continuing. Between 2010 to 2019, rents went up 36% nationwide, while incomes only increased by 27%. The pandemic briefly disrupted this trend, but rents alone in many places have all but recovered to pre-pandemic levels (not to mention the housing sale price mania that has characterized the past year).
Landowners are seeing massive, unearned increases to their wealth because of these trends — all while tenants are left to pay the ever-climbing tab. On top of this, infrastructure projects paid for by taxpayers — any light rail, bike lane or pedestrian improvements to neighborhoods, for example — all increase land values. At the same time, the social services that cities need, like public transit and affordable housing development, remain underfunded....
....MUCH MORE
Here is some more A. Smith:
every increase in the quantity of useful labour employed within it,
tends indirectly to raise the real rent of land."
The idea of the public owning the land is tangentially related to Henry George's Land Tax but goes much further and is more direct.
*See:
"Who owns central London?"
Who Owns England? "A guide to Modern Domesdays"
"Berlin’s Rent Controls Are Proving to Be a Disaster"
September 28
German Politics and Policies:....
....So with all this running through my head, the first thing I saw regarding German politics on Monday was that the referendum to expropriate and socialize Berlin apartments from Germany's largest landlord had passed. Although the referendum is not binding on the Berlin government the result 57% ja/39% nein is one heck of an indication of the political zeitgeist.....August 25
"Uganda receives 51 out of expected 2,000 Afghan refugees"
Oh dear. You can just imagine the conversation:
"What's this? Kampala? There must be some mistake, I signed up for the Berlin package: Ku'damm, techno, Tiergarten, last of the hipsters. Not Uganda."
