Like many voters around the country, Rhode Islanders approved a bond issue this November for millions of dollars (in our case, $15 million) to "preserve open space". The "preservation" of open space has become such a mantra that it seems sheer folly to ask even such obvious questions as "Where will all this land go if we fail to preserve it? Will it fly off the face of the planet?" No, in fact it would still have been there on November 4th, just as open and beautiful as ever. But, we're told, the greedy developers threaten to turn it into strip malls, or (almost as bad) build new houses on it!
Here it is instructive to get hold of a real estate agent's current MLS book, and see all the large land parcels whose listings expired after six months to one year of intensive marketing. The same can be seen in the real estate ads of any newspaper. Isn't it puzzling why the "greedy developers" would pass over all those parcels for sale and want only those needing "preservation"? Yet, the owners of those "threatened" parcels will usually wave a purchase and sale agreement in our faces. One wonders who is really being threatened here!
Even under the best conditions, there are many reasons why public purchase of land for open space is bad public policy. It is regressive: the funding usually comes from federal or state taxes, mostly income and sales taxes which fall hardest on low and middle-income taxpayers. These folks will often never get their own little piece of land, or will have it only after thirty years of a mortgage burden; yet they are being forced to chip in to pay millions to frequently affluent owners of large parcels.
For one incredible example, a full ten per cent of the Rhode Island Bond Issue money will go to the wealthy Haffenreffer family of Bristol, who sold the Narragansett brewery. Their scion flew in from Europe in October for the closing on the preliminary transfer of a large farm the family has owned for years. Talk about using taxes to redistribute income upwards! (The other selected parcels and their owners were not supplied to the voters before the election, yet they unwisely approved the bond issue anyway.)
There is huge potential for corruption in this process, for there are many more landowners applying to be "preserved" than there are winners of the grants. How is the selection really made? Are those parcels truly the most vital habitats of endangered species of plants and animals -- or do their owners simply have good friends in government?
It's hard to imagine a more costly and inefficient approach to this problem than attempting to buy up the land parcel by parcel. The fact is that developers buy land in rural areas because it is cheaper than land closer to cities. Builders would usually like to locate close to population centers, employment centers and interstates, but land speculators have those parcels tied up by demanding high prices.
What's the best solution? It's pure Henry George. Increase taxes on land values and lower them on buildings. Tell land speculators that it's actually our land, and if they want to hold on to prime parcels, and prevent everyone else from using them, then in all fairness they need to pay us considerably for that privilege. The resulting increase of closer-in parcels for sale would absorb the demand for housing and shopping malls for years to come (and will make efficient use of existing public infrastructure)! The threat to "endangered" rural space will largely disappear.
Now the tough questions: Does society really care enough about the environment to adopt a potent cure for sprawl -- even though it will discourage lucrative land investments for the well- connected well-to-do? We need to re-think the advisability of allowing investment in land, because free-given land is profoundly different from capital in buildings or technology. This kernel of thought may hold the key not just to the sprawl problem but to broader social issues as well.
Catherine Orloff -- November 1998
What Folks Have Been Saying
- Wednesday, December 16, 1998 at 20:40:17 (EST)
A well conceived and written argument. I intend to peruse this site regularly in future.
David Giesen <[email protected]>
San Francisco, CA USA - Thursday, December 24, 1998 at 15:28:37 (EST)
Like what you are doing in the web. Your counter has gone bananas. Bill C.
Bill Camargo <[email protected]>
Barto, PA USA - Saturday, January 02, 1999 at 01:52:12 (EST)
No, Bill, we're just getting that many hits... what can I do? ;)
- Saturday, January 02, 1999 at 09:32:35 (EST)
I agree that something should be done about the prices of land. I think that the only thing that should cause the price of land to be different is the structure of the land not the location.
Amanda McAdams <[email protected]>
Chattanooga, TN 37363 - Sunday, January 31, 1999 at 08:18:30 (EST)
Your perception is very interesting, Amanda, and I think it is right! If you are interested in learning, in terms of economics, how that could come about -- then take our course!
Lindy Davies <[email protected]>
- Sunday, January 31, 1999 at 09:28:06 (EST)
Dear Friends, Are there any groups promoting Henry George's philosophy in New Hampshire ? If so could you please give them my mailing address : P.O. Box 3048 Nashua, NH 03061 - 3048 Why does it seem that Henry George is a deep dark Secret ???
JOHN SIENKIEWICZ <[email protected]>
NASHUA, NH U S of A - Tuesday, February 16, 1999 at 23:06:27 (EST)
Progress & Poverty - Definitions - Capital - Law of Rent - Booms & Busts - The Remedy - Links