Abstract
In all countries, the state participates in the urban land market, either at the minimal level necessary to purchase land for roads and other public works, or more extensively. A radically different system is one in which the state undertakes all development, or (in some sense) owns all land. We will first examine public participation in the land market before examining ‘nationalisation’ and the rather untypical British post-War experience.
In 1918, communal land policy was given a new direction under the administration of the then Mayor, Dr. Adenauer. Till then it had primarily been influenced by revenue considerations; the emphasis now shifted to land banking, the provision of parks, and the development of suburban housing and industrial districts
One Hundred Years of Land Policy in the City of Cologne Cologne, 1975 (author’s translation).
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H. Darin-Drabkin, Land Policy and Urban Growth, Pergamon, 1977.
References
J. Reps, ‘The Future of American Planning: Requiem or Renaissance’, Planning 1967, Chicago, p. 50.
Marion Clawson, Suburban Land Conversion in the United States Johns Hopkins, 1971, p. 359.
Peter Hall (ed) The Containment of Urban England. Vol. 1. Pt. 3.
Neu Perlach is a satellite town of 80,000 inhabitants near Munich, planned by the non-profit organisation Neue Heimat. The quality of design and construction is extremely high, and the provisions for cyclists and pedestrians, for recreation and shopping, are exemplary. Everyone lives in flats — in attractive blocks of 6–8 storeys with large green areas between them. This represented the ‘sound planning’ of the mid-1960s in Germany, when high-rise was under criticism but ‘houses’ were frowned upon. There is likely to be a continuing demand for flats, which are favoured by certain groups, such as working childless couples, and old people. But German families with children are following the Anglo-American trend towards ‘houses’. A mixture of houses and flats — which would have been possible without even lowering the moderate density (a floor area/site ratio of 1) would have better matched even current demand from a cross-section of the population. Ironically enough, Neue Heimat built a lot of excellent terraced housing in the 1950’s, of the kind that is now coming into fashion again.
The point, as is well known, was originally made by Ricardo in relation to agricultural land. ‘Corn is not high because a rent is paid, but a rent is paid because corn is high... no reduction would take place in the price of corn, although landlords should forego the whole of their rent.’ (David Ricardo, ‘On the Principles of Political Economy and Taxation’, Third Edition, 1821, in The Works and Correspondence of David Ricardo, edited by Piero Sraffa, ambridge, Cambridge University Press 1951, Vol. 1, pp. 74–75. A failure to understand this point is widespread. It was shared by one British building society chairman, who advocated cheap sales of land during the 1972 boom as a means of bringing down house prices. It underlies several recent Canadian and American reports. ‘It is the price of land which determines the sales price of units to be built. An average $4567 lot would most likely mean a home selling for $22,500—$25,000... So the increase in the cost of land is a factor in pricing much of the public out of the market’. A. Allan Schmid, Converting Land From Rural to Urban Use. (Baltimore, Resources for the Future, Inc., 1968 ) pp. 3–4.
The only empirical study I know bears this out. E. R. Heaton, Optimisation of Land Stock: a policy for management engaged in private housebuilding. Unpublished M.Sc. thesis. University of Aston in Birmingham, 1971. This study of the ‘land banks’ of building firms in the 1960s, concluded that the average annual appreciation in land value — 10 per cent — was almost exactly the same as the interest charged by merchant banks in this period. By obtaining equity capital more cheaply, and operating with an above-average degree of financial skill, it was possible to obtain a gross return on equity capital of 16 per cent. But this rate of return was possible — with above average skill — on building operations alone. The study concluded that land holding could only be justified by the need to maintain a steady flow of work. The ‘land bank’ should therefore be carefully tailored to prospective demand, and kept to a minimum rather than a maximum. Mr. Heaton can claim a probably unique empirical verification for his conclusions: he went into the housebuilding business and kept his firm going through a slump which bankrupted many competitors.
See G. Hallett. Housing and Land Policies in West Germany and Britain London, 1977, Pt. 3.
Towns and the Land. Urban Report of the Liberal Land Committee. Land and the Nation. Rural Report.
I believe that land and housing are the two desperately important elements of social policy in the United Kingdom, Lord Goodman said the other day. ‘One of the unsolved mysteries of our time is that we have not controlled the price of land within the last ten or sixteen years. I do not think it is due to sinister capitalist motivation, I think it is due to sheer idiocy.’ Let us put an end to idiocy.“ Ewart Parkinson, Senior Vice President, Royal Town Planning Institute”. R.T.P.I., Conference on ‘The Future of Land’, October 1974.
The Land Question: a fresh approach Royal Institution of Chartered Surveyors, 1974. Royal Institution of Chartered Surveyors, The Land Problem Reviewed 1978.
Commercial Property Development, First Report of the Advisory Group on Commercial Property Development. (Pilcher Report). HMSO, 1975.
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© 1979 Graham Hallett
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Hallett, G. (1979). Public Land Acquisition. In: Urban Land Economics. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-04537-2_12
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DOI: https://doi.org/10.1007/978-1-349-04537-2_12
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