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Windfalls and Wipeouts

  • Graham Hallett
Chapter
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Abstract

The relation between land values and public policy is a field in which strong passions have been aroused. On the one hand, critics of ‘unearned increment’ have demanded state intervention to prevent speculators making what they consider to be gains at the expense of the community; on the other hand, the ‘speculators’ often turn out to be ordinary households, and the policies adopted in the UK have caused hardship, desperation and at least one suicide. They have also had consequences in blocking development (e.g. the redevelopment of Victoria Station) which their framers never envisaged. The issues are therefore of considerable importance, although they have tended to be ignored by economists and smothered in detail by lawyers. One must begin by wielding Occam’s razor. Many influential ideas are demonstrably based on logical confusion or untrue factual assumptions, which must be untangled before one can start to establish a workable basis for policy.

Keywords

Local Authority Land Market Land Prex Country Planning Land Commission 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Select Bibliography

  1. British Property Federation, Policy for Land. 1976.Google Scholar
  2. Commercial Property Development First Report of the Advisory Group on Commercial Property Development, (Pilcher Report) HMSO, 1975.Google Scholar
  3. Graham Hallett, Housing and Land Policies in West Germany and Britain. pt. 3, Macmillan, 1978.Google Scholar
  4. Donald Hagman and Dean Misczuski Windfalls for Wipeouts: Land Value Capture and Compensation. American Society of Planning Officials, Chicago, 1978. A legal study of the USA, UK, New Zealand, Australia and Canada.Google Scholar
  5. Royal Institution of Chartered Surveyors, The land problem; a fresh approach 1974; The Land Problem Reviewed 1978.Google Scholar
  6. D. M. Turner, An Approach to Land Values, Geographical Publications, 1977.Google Scholar

References

  1. 1.
    Expert Committee on Compensation and Betterment. Cmnd 6386. HMSO, 1942, p. 105Google Scholar
  2. 2.
    Most compulsory purchase in the UK, however, is for public authority housing or ‘urban renewal’. In these cases, the need for compulsory purchase arises only because of particular systems, the need for which, at least on a massive scale, can be questioned.Google Scholar
  3. 3.
    Some German valuers criticise ‘market value’ as being too volatile, and have developed a concept of ‘gemeine Wert’. However, this seems to be very similar to ‘open market value’ as assessed under the provisions of the British legislation.Google Scholar
  4. 4.
    J. B. Cullingworth. Town and Country Planning in England and Wales. Allen & Unwin, 3rd ed. 1970, p. 156.Google Scholar
  5. 5.
    I would have taken the following case to be from one of the more desperate TV ‘sit-corns’, if I had not experienced it myself. An elderly lady was the owner of a Georgian cottage, in which various changes specified by the Public Health Inspector were required to avoid ‘condemnation’. One concerned the upstairs landing, which gave on to two bedrooms; it had no window and was lit by electric light. The Inspector said that the landing would have to have daylight, and the only practical way of achieving this was by means of glass panels in the bedroom doors. The owner suggested frosted glass, but the Inspector replied that this would not provide sufficient illumination; the panels in the bedroom doors had to be of clear glass! The owner pointed out that she had curtains behind the doors. The Inspector, who was not an unreasonable man, said that the curtains only had to be drawn back when he made his inspection.Google Scholar
  6. 6.
    F. A. Hayek. The Constitution of Liberty p. 357.Google Scholar
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    Development and Compensation — Putting People First. Cmnd. 5124. H.M.S.O. 1972. p. 70.Google Scholar
  8. 8.
    Hagman & Misczynski op cit p. 256fî.Google Scholar
  9. 9.
    B. Bracewell-Milnes. "Market Control over Land-use ‘Planning’" in Government and the Land, Readings 13, Institute of Economic Affairs, London, 1974, p. 81.Google Scholar
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    It is examined in more detail in the author’s Housing and Land Policies in West Germany and Britain. Macmillan, 1977, Pt. III.Google Scholar
  11. 11.
    P. Samuelson. Economics 9th ed. p. 386, Chapter 28. It is often assumed in the economic textbooks that the supply of land is completely inelastic, so that a tax would leave prices unaltered. But it is in practice unlikely that owners will sell for development or undertake development, without any ‘sweetener’ for risk and inconvenience. On this more realistic assumption, the supply of land will to some extent be elastic, so that a tax will raise the market price.Google Scholar
  12. 12.
    The Land Problem — a fresh approach R.I.C.S. 1974. Policy for Land British Property Federation, 1976. See also Land for Housing The House Builders Federation, 1977.Google Scholar
  13. 13.
    Policy for Land op. cit. Appendix.Google Scholar
  14. 14.
    The report makes only passing reference to the difference between the English system, where local authorities operate the Act and the Welsh system of a ‘Land Authority for Wales’. Most independent observers have concluded that the Welsh system has worked better than the English, by being freed from local authority control (‘Community Land?’, by Malcolm Grant, Centre for Environmental Studies, Urban Law Conference, 1978) The abol ition of the LAW would be a clear loss from a repeal of the Act.This is not to say that there are not potential advantages in some participation in the land market by local authorities, provided that competent ‘estate management’ departments were set up, and allowed a measure of professional autonomy. Experience in West Germany, where there is participation in the land market by both local authorities and ‘provincial homestead companies’ suggests that there may be scope for both types of organisation.Google Scholar

Copyright information

© Graham Hallett 1979

Authors and Affiliations

  • Graham Hallett
    • 1
  1. 1.University CollegeCardiffUK

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