Bacon's Rebellion

WHO REALLY PROFITS?

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by

James A. Bacon
in

There is a very good profile of who really profits from knee-jerk, political pandering over the New London case on the front page of WaPo today. “The Last Handshake Deal: Southeast’s Old-School Landlords Make their Exit–and Money–as Developers Swoop In.”

Also in today’s WaPo there are stories on the front page of Business (“Deal Would Swap Land for Hotel Site”) and on page three of Metro (“Alexandria Buys 2 Waterfront Properties”) about attempts to upgrade urban fabric where the public’s cost is significantly increased by the shadow of New London case over reaction.

There are thousands of acres of land in the Virginia and hundreds of thousands of acres in the United States within the Clear Edges of New Urban Regions where transition to new uses would benefit exiting and future owners as well as the general public. Raising the price of these transactions benefits primarily lawyers, agents and denizens of places like the Nexus Gold Club strip joint.

No one in their right mind would argue that the existing municipal governance structure does not need Fundamental Change if there is to be fair, open and equitable use of eminent domain. Let us focus on making those changes: Move the level of decision to the level of impact; Create open processes within a governance structure that reflects contemporary human settlement patterns.

Knee jerk political pandering and property rights uber alles vis a vis the public interest obviously just makes matters worse.

It is just that many good opportunities to evolve functional settlement patterns are lost? No.

Is it just a matter of dollars and the need to raise taxes to pay for lining the wrong pockets to achieve positive change? No. (Recall that Southeast revitalization did not start by itself, it required hundreds of millions of dollars, much of it direct or indirect public expenditures that tax payers will foot the bill for.)

There is a bigger (regional) reality: For every acre within a half mile of a shared-vehicle transport system station that is converted from parking lots and boarded up buildings (see WaPo photos) we do not need to develop 200 acres of Countryside and build five miles of roadways.

That is not all. When gasoline hits $7.00 a gallon, the human settlement patterns that result will still be functional: Citizens and their governments can achieve mobility and access; Shelter will be affordable and accessible.

If we make the transition of vacant and underutilized land to viable settlement patterns (ones that constitute Balanced Communities in sustainable New Urban Regions) easy, fast and fair, the cost of dwellings and economic opportunity space will not be just accessible, it will also be less expensive. (See “Wild Abandonment,” 8 September 2003 at db4.dev.baconsrebellion.com

EMR

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5 responses to “WHO REALLY PROFITS?”

  1. Ray Hyde Avatar
    Ray Hyde

    There may be thousands of acres that could be put to better use. But they belong to someone who already has plans for it. They may not have the capital to reinvest to improve the use. They may like the use that they have. They may have a different schedule than yours.

    If you want them to do what you want them to do, then you should expect to pay them enough to make it worth it -to them- not to you, and not to the public benefit.

    Improving that present use is not going to be free, and those that provide those resources (land) that you think is so valuable ought to get a share of the action. They are entitled to get the highest price they can, or even a share of the cash flow. That is what landlords in shopping malls and owners of toll roads do.

    There is no justification whatsoever to claim that the resource is valuable on one hand, and that society ought to get it for less than it is worth on the other.

    What is scary is that you don’t seem to understand that this is wrong. It is stealing.

  2. Daniel Avatar
    Daniel

    I can’t help but feel like there are issues when someone “owns” something that should, in some sense, belong to everyone. People own the land now. What if people owned the ocean? Or the air we breath? I don’t know, I can’t but feeling like these things should never be put in the category of things that can be owned.

    I know it sounds communist, but I am thinking of it more like the way Native Americans viewed the land. But it would probably take a major revolution in America to change the idea of land ownership.

  3. Ray Hyde Avatar
    Ray Hyde

    Fundamental Change.

    I don’t necessarily disagree with you, but we have to work with what we have on one hand, and on the other hand, you can’t have it both ways.

    On this blog, we frequently hear about the tragedy of the commons. If no ones owns the common land then it is over grazed and goes to ruin. Use of the highways is free to everyone, so they are overused and undermaintained. Remember, the Native Amaericans were frequently at war over land, because they didn’t have the concept of ownership, or rather, their concept was tribal rather than personal. When the American West was free range, warfare broke out when it was privatized. Land has always been central to warfare.

    It used to be that air at the gas station was “free”. Of course it was never free, but when we suddenly had to pay for it, we were upset. One of the reasons that happened is that some people abused the service by stealing the hoses, etc.

    The government created the system of land ownership. In Virginia there were land grants form the King, which were subsequently subdivided and sold. One of the stated purposes was to increase the commerce and wealth in the colony. Today, we have succeeded beyond the King’s wildest dreams.

    Some of what you imply has already occurred and continues to. Under the original land grants the rights associated with the land were unrestricted. The earliest restrictions came with the concept of eminent domain. It was created in order that the best mill sites could be used for grinding grain. Later restrictions occurred when we discovered that some practices caused major social problems: mining for one. Sometimes it took a long time to see the results of overuse, as in fishing and forestry. Fishing rights are now bought and sold, so people do own the ocean in a sense. Later, in 1917, the concept of zoning was created in order to separate land uses to prevent nuisances. Now we have separated land use to such an extent that some people claim it is the cause of our transportation problems.

    But what do you do about, say, an airport? That is a use that needs to be segregated and also causes enormous transportation problems. You have to drive all the way around to get from one side to another. If you are flying you have to detour around airports unless you are landing there. You don’t want houses near there, but it creates thousands of jobs.

    Now people are claiming new features as publicly owned, like viewscapes, watersheds, historical areas, habitat, etc. The reason they are claiming ownership is that these features are becoming rare, in some areas. Adam and Eve, after all had perfect freedom, and a perfect world, but we have been screwing it up ever since. The more people we have, the less freedom we have, because others will impose their view of things on us, just as some indian tribes dominated others.

    The government created the system of ownership initially to create wealth, and later to help sort out competing interests. Now the government holds that property rights are separate entities from the land and can be bought and sold. In New York a condominium recently spent millions for the air rights over a church, in order to guarantee that the view of cental park could not be usurped by a future intervening building.

    So even the air is now bought and sold, where it is valuable enough.

    If these rights can be bought and sold, they can also be stolen. We invented democracy to arbitrate disputes over policy, for the benefit of all, and also for the protection of the few.

    Now we have a situation where some claim that if I build a new home, and profit from my labor, I am somehow stealing from you. As I pointed out, more people means fewer rights. The same people, or people who are politically allied with them claim they have the right to assets like viewscape without recompense.

    This is what I men when I say you can’t have it both ways. You cannot complain that one of your sticks is being stolen and that you have the right to steal anothers. Cinemas, for example are in the business of selling viewscapes, and they are able to do it because their product is desired and they have control of the product.

    It is not a perfect system, but ownership is what we have. Any attempt to reduce ownership without payment just boils down to either stealing or tribal warfare.

  4. Ray Hyde Avatar
    Ray Hyde

    On the front page of today’s WaPo there is a story about peasant unrest in China.

    “The violence is in part a reaction to an economic boom that has produced 9 percent annual growth in China but benefited mainly city dwellers.”

    In 2005 more than 87,000 demonstrations and riots occured as farmers became fed up with land grabs and pollution.

    “Premier Wen Jiabao last month warned senior rural bureaucrats against making “a historical mistake” by failing to protect farmers and their lands, which he predicted would lead to more violence. In particular, he cautioned, towns should not violate the law in seizing land nor sell confiscated fields to businesses as a way to raise public funds.”

    Even the communists understand the value of land ownership. I wonder when PEC will wake up and smell the roses.

  5. Ray Hyde Avatar
    Ray Hyde

    http://www.washingtonpost.com/wp-dyn/content/article/2006/01/27/AR2006012701325.html

    has an article about transfer of wealth to those who own property around the metro stations. The ostensible reason for this is to create more afforadable housing by giving the developers higher height restrictions and density credits. The developers are providing nothing for parks, schools, etc., according to the author.

    Having wasted the money on Metro already, there is no reason not to try to get the most out of it by increasing density around the metro Stops.

    You have to wonder though, about increasing density and then asking the developers for room for parks. I don’t understand or agree with all the author’s arguments, But he points out that property near suburban Metro stops rose 15% while those with special attention from the government more than doubled.

    His complaint seems to be that the county isn’t getting enough out of the developers because the increase in taxes are only a percetage of the increase in value. He also complains that the new rules cause a transfer of wealth from more suburban regions to those getting special favors.

    If you take all the developer’s profit out they won’t build, and the county gets nothing. I don’t see the point of complaining about someone else’s profits. Profits are a sign that something good is happening that people are willing to pay for.

    But if certain developers are favored because they own land next to a Metro stop, that was built and paid for with everybody’s money, then you have to wonder where the profits came from.

    If the suburban, rural, and agricultural areas find they are being cheated, then you will her a lot more complaints.

    Just as in China, Oregon, and other places that have already learned what EMR seems to miss.

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