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Land value increases are product of society

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letters

Colin James is right to point out (aj 2.4.98) the significance of increased land values obtained by planning permissions. Under the present system these are pocketed by the developer and, as was graphically illustrated by Marco Goldschmied in his talk at the riba, this can amount to windfalls running to several hundred per cent.

The fact is that this increase in pure land values is created not by any developer, but by society as a whole, which requires land on which to live and work. As communities grow and develop, so does their demand for land, and with this comes an increase in land prices commensurate with their productive value.

The justness of a system which, in simple terms, hands over to a private person what is the product of a community is obviously questionable. The alternative is to return that product to the community through a tax on land values - in effect by levying rates on the values of sites assessed at their bare land values at the time.

It has been said that this system could replace entirely all other forms of taxation (although its introduction would need to follow a process of gradual transition), and would be far simpler to administer. In time the freedom from the current system of taxation, which adds to the costs of work and production to one which does not, would have a significant beneficial effect on the economic health of society.

It would be useful if the professional bodies involved in development were to take a good look at this system. It could lead to a much more just, stable and creative society in which everyone benefits.

JOHN WOODWARD

Lincoln

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