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...or why we would still need Land Value Tax even if everyone had a home.

One of the most common responses to the suggestion that Land Value Tax would be an equitable way of solving housing shortages is that "we don't need more tax, just looser planning regulations" enabling landowners to release more (and predominantly rural) land for additional housing. You can see these arguments out in force in the comments to a recent posting on LVT by PragueTory.

It is also the core logic of Kate Barker's report on the housing market which the government has decided will pretty well be the bible for housing policy - that housing problems are due mainly to a shortage of supply of building land. And this has fed through to well-meaning but misguided local policies such as that building thousands of homes at Grenoble Road in Oxford will somehow solve Oxford's housing affordability problem (which even prominent members of the Lib Dem administration are now supporting despite what I thought was a manifesto commitment to look seriously at other options first).

I am also in fairly frequent correspondence with a brilliant guy called Kevin Cahill, who has done much research to produce tomes such as "Who Owns Britain" detailing the inequity of land distribution in the UK, and now in his latest, across the world as a whole in "Who Owns the World: The Hidden Facts Behind Landownership". He too does not seem to understand, given that there is approximately one acre available for every man woman and child in the UK, why Land Value Tax would still be necessary if you made more of the 93% currently non-urban land in the country available for housing.

The mathematics is simple, say all these people, we don't need to concrete over the countryside. Providing 0.1 acre for each unhoused household in the UK would only consume about 200,000 acres in total, or about a further 0.5% of the land surface (or a mere seven per cent increase in the seven per cent of land currently developed), to satisfy the total demand for the next ten years (2 million additional homes). And so we should not be scared of doing so on the trumped up pretext that we're threatening to destroy this green and pleasant land.

But this argument is why the planning system, and especially the predict and provide school of planning, cannot actually solve the problem just by throwing more land at it. You cannot predict where people will actually want to live. And land values are determined not merely by the supply and demand for absolute amounts of land, but much moreso by the supply and demand for particular locations.

To go back to the Oxford proposal again for a second, what they are suggesting is tacking four thousand or more homes onto the edge of what when it was built was the largest council estate in Europe apparently, and what now is the most deprived "super output area" in the county. And in fact the newer bits of that estate, developed in the last twenty years or so, have led in this "rush to the bottom" - and in that short time have become more deprived on all measures than even the more mature part of the estate adjacent to it.

Would I want to live in one of these new homes? Probably not, at least if I were working still at Brookes. It's almost the furthest point from Brookes one can get in East Oxford. Obviously the success of this new "community" (though how you actually create a "new community" out of thin air, or bare ground in this case, escapes me) would depend to a very great extent on how many of the facilities that make elsewhere in the city attractive - schools, shops, transport links, workplaces, entertainment places and so on - you choose to duplicate in that new area. And to do so properly will require vast expenditure that would, frankly, leave the current landowners (mostly Magdalen College and Thames Water) hoping to make a mint out of their holding, getting next to nothing for their land. Well, certainly nothing next to the prices prime residential land within the city attract at the moment - but in the volume they are talking, probably more than enough to keep the college cellars well stocked for the foreseeable future!

Now, a year or so ago there was a proposal from the Labour Land Campaign - the main advocates of Land Value Tax in the Labour movement in the UK - to "rebrand" Land Value Tax, and call it instead, in public campaigning at least, "Location Benefit Levy". Most of the rest of us in the wider "Georgist" movement poo-pooed the idea, thinking it would confuse people who had heard of LVT. But you know, on reflection, who has? Enough to be worried about confusing? Most people I know who have heard of LVT actually understand it is about locational value first and foremost anyway. But for those who haven't, it might remove one early hurdle to their gaining an understanding of it.

Anyway, why I mention that is that it is important to realise that while Land Value Tax is levied on the quantity of land and its value in the marketplace at its optimum permitted use, the thing that actually creates value, that makes one place less affordable than another, is its location. And 4,000 new homes in an unattractive location will but make little dent on affordability in Oxford as a whole. So we will have yet more of a "rush to the bottom" for those new homes and they will become what is known as the new "margin of production" in Oxford's land values. It would have to be something very special to attract long term-looking buyers - something perhaps such as they did at Vauban in Frieburg - though even that has the singular advantage, not repeated with Grenoble Road or other urban fringe proposals in the UK, of being much closer to the old town centre (and therefore suitable for a wider mix of residents, including halls of residence for their university and so on better reflecting the makeup of the whole town).

But I digress (as usual). That location value - the benefit, perhaps, of having bought your council house next door to what is now my place of work when the university was but a dream of John Henry Brookes and didn't really affect land values around it - is still something that the landowner, as a landowner, has done nothing to earn. And, being unearned, and furthermore being something that actively excludes those who now, arguably, justify living there more but can no longer afford to do so, it is, to paraphrase Adam Smith and Milton Friedman, still the best base to tax.

Until we invent a Star Trek style device to transport us instantaneously from A to B there will still be exceptional and unearned profit to be had from particular locations and whilst, by building more housing somewhere else one may make a small dent in that for a short time, the only way to even out the relative affordability of different locations is to have a "Location Benefit Levy". Building more homes on the outskirts will not reduce the pressures on more popular locations significantly on its own. Indeed, it could well simply increase the premium to be reaped for the better locations and bring more "gentrification".

Technorati Tags: Oxford Brookes University, headington, land value tax, oxford, affordable housing

Dan Paskins takes me to task for moaning about Labour's tactics against me when they put out that "scurrilous" leaflet while others, including he says the Lib Dems, are doing just as negative things in their leaflets. I should treat it, he says, as an opportunity to debate those issues if I feel so strongly about them and accept that, in such a debate, I might win over some people, or at least their respect for making the case rather than whining.

He provides an example that, in our East Oxford wide tabloid, we ran an article asking whether Andrew Smith, Oxford East's constituency's New Labour MP, was the biggest hypocrite in town for his duplicitous stance on post office closures. He says that as an issue, that too was beyond the remit of the City Council and therefore, by one of my "rules" of discourse not something that should be mentioned in the context of those elections.

Set aside for the moment a leaflet I saw for Hinksey Park ward with a priceless (literally!) picture of Andrew, the Labour council candidate and A N Other hugging a pillar box pledging to keep Grandpont Post Office open. Even if they hadn't made it a campaign issue of their own, economic well-being is, according to their own government, part of the remit of any local authority. The other four districts in Oxfordshire have pledged to fight the closures and to support communities that are affected if they fail in that fight. Already considerable time and effort had gone in, not, it has to be said, much on the part of the city council, as much as by the various bodies that help social enterprises in the county, to keeping Iffley Village Shop and Post Office going after previous owners decided to stop running it. But clearly the campaign issue for Grandpont and Mr Smith's own actions in supporting the closures in parliament are at odds. They made it a campaign issue even if it wasn't. The person in the photos objecting to the closures voted in favour of them when he had the chance. That seems materially different from my case.

Then there's the question as to whether one should simply debate what is thrown at you to debate, or object to it. Well, I don't for one minute believe that putting out a leaflet on the last weekend of the campaign, distorting my views by selective quoting, is an invitation to a debate. After all, I know some Labour lackey had collected the quotes some weeks previously - I saw them trawling through my drug posts in the week commencing 7th April - if they wanted a debate, there would have been time. It was also notable that they did not put out the said leaflet in the part of the ward that might have been expected to be most interested in such a debate, in the halls of residence (though they didn't put anything round the halls of residence to be fair, in their apparent attempt to disenfranchise a quarter of their electorate by not engaging with them).  Yes, let's have such a debate. It is all too rare in this country to be able to have a reasoned debate about drugs policy. And stunts like this leaflet prove why.

Dan thinks my position is significantly different from that of my party. It is not. The party concluded that the current system of criminal enforcement was often if not always ineffectual and counter productive, failing to minimize harm and continuing to put users and others into the realms of the brutal organized crime networks supplying these substances. The main difference really between my position and the party position is the action I would take to remedy that - legalize, regulate and tax - whereas the party still feels that legalizing would not be an option even if it wanted to promote that as policy because of international obligations. As their leaflet nearly managed to get right, whilst not strictly legalizing, policy is that people whose only crime is possession of small amounts of any drugs for personal use will not be impriisoned, usually leading them to further addiction and contact with drugs.  Honest reporting of my opinion would of course also have said that I believe legalize, regulate and tax is the way to stop drugs getting into the hands of children, for example, which was obviously not even explained to former councillor Standingford when asking for her opinion who went off on one about protecting and educating children about drugs.

No, let's face it, I have a moral right in law to object to my work (this blog) being chopped up into sentences and rearranged out of context to create a derivative work whose sole intention, the evidence suggests, was to bring into question my character or reputation. I will argue that doing so (creating a derivative work against copyright rules) amounts to making a false statement of fact about an opponent (the same cannot be said of claiming, correctly, that Andrew Smith is "supporting post offices" in Labour leaflets, but voting for their closures in Hansard, or indeed in Dan's case that a vote for the Labour Party is support for the party that has recently taken us into several illegal wars). I say again, it is this sort of stunt that puts people off indulging in meaningful progressive debate about what is a significant issue in our world, even if not one that I have any power to do anything about whether elected to the city council or not.

I say supporters of prohibition are accessories to the gangland and drug related deaths that happen at home and abroad as a result of the criminal underworld in which the drugs trade operates with justification. Such moral turpitude on the part of those that would shirk that debate or use the difference of opinion for a little electoral gain is shameful, frankly. It's uncomfortable I'm sure, but call a spade a spade - Labour traded those deaths, past and future, for a few extra votes.

Hat tip to a wonderful post from South Africa about Britain's surveillance culture in which Chris Rodrigues reminds us that it was Nicolae Ceausescu who often pushed the surveillance state in totalitarian Romania with the now much overused saying that "if you've got nothing to hide you've got nothing to worry about".

We hear it all the time in Britain whenever someone starts complaining about the "surveillance state", as if just not being a criminal makes it okay to have your movements tracked, your DNA held on file or your telephone tapped. And yet again, in the wake of the two high profile convictions last week of Steve Wright and Mark Dixie, people have been calling for a full national DNA database.

Whilst it's not a terribly palatable subject, one wonders just how many DNA samples one might collect from a prostitute. Their work gets pretty intimate. One of these two fiends was on the existing database yet that doesn't seem to have been enough for the police - they want us all on the database, so they can trawl through every little sample they find at a crime scene, presumably using more computer power than Los Alamos to match up then round up casual crime scene visitors who will have nothing to do with the crime yet inevitably some will end up having to explain their innocent presence there.

No, it's time to call a halt to this expansion of the creepy, big brother state. My DNA is part of me. I may unwittingly leave bits of it lying around all over the place but to take some off me for cataloguing and storage is it seems to me a breach of habeas corpus. You're asking to hold a little bit of me in perpetuity, like a miniature electronic tag so you can reel me in whenever my DNA appears anywhere near a crime.

The fact is that Steve Wright and Mark Dixie were caught and were convicted. The existence or not of their DNA on a super-duper database doesn't seem to have prevented justice being done eventually. Good old police work was what did for them. That's where it should stop.

Or am I seeing things? There's this eerie silence going on about Blair's latest set of travails.

The Tories gave us Hamilton and a few quid to ask questions. But super duper new Labour trumps that nobly with huge official bungs to get a place permanently able to ask any question you like from the red benches of their Lordships' house.

The party that set up the new laws on donations and party finances has a treasurer and chair who have never heard of millions of pounds worth of loans made to the party.

The government can only get its bills through with the support of the opposition.

A series of ministerial scandals, sexual, financial, manegerial and a long term murmuring about donors and deals such as Ecclestone and Hinduja.

The biggest jump in unemployment for thirteen years.

And all on the day they go back into the lead in the polls over Cameron's Tories on the day before his hundredth as leader.

Maybe, just maybe, Tony Blair is divine, the missing corner that will make the Trinity a complete and perfect square.

Spotted an interesting piece on BBC News tonight about Liverpool:

All very interesting. In 1793 there were some banking collapses in London and an important bank in Liverpool went bust as a consequence. There was literally not enough cash about to oil the wheels, or perhaps rather fill the sails, of the burgeoning trade of the city. The council went to ask for a loan from the Bank of England but it was refused. So it took more radical action. They petitioned for a local Act of Parliament "...to enable thee Common Council of the Town of Liverpool in the Coutnty of Lancaster on behalf of and on account of the Corporation of the said Town to issue negotiable notes for a limited time and to a limited amount."

For two years the city issued its own currency on the creditworthiness of the city and its citizens and traders, until the financial storms rocking the global trade of which Liverpool was emerging as the centre calmed down.