From:
Gabrielle Gurley, October 31, 2016
In 2013, the American Society of Civil Engineers’ quadrennial “Report Card for America’s Infrastructure” showed that the United States needed to invest $3.6 trillion by 2020, in 16 sectors, to raise the country’s overall score above a D+. It is doubtful that the next report card, due out in early 2017, will show substantial gains.
Selections from:
Trump’s infrastructure plan: Will it ever break ground?
by Patrick Sisson May 12, 2017
One of President Trump’s common refrains on the campaign trail was that he would help rebuild the country’s crumbling infrastructure, leaning on his extensive experience in real estate and development to shepherd forth a plan to cut red tape, move projects forward, and put this country to work.
There has been movement over the last few days, with reports saying that the Trump team has solicited bids for potential infrastructure investments from across the country and looks toward releasing a plan in the fall that would steer $200 billion of public money to infrastructure investment [mainly in the form of tax breaks for private corporations that would build and own public infrastructure].
Henry Petroski, a Duke professor and infrastructure expert, says that [Trump’s plan for] spending on roads and construction is…still taking shape, but based on previous reports and statements from administration officials, it would include a combination of government investment, new funding mechanisms to encourage private investment, and regulatory reform to help accelerate approvals and construction timelines.
Others have a more pessimistic view of pushing for more private investment in infrastructure. According to urbanist and journalist Yonah Freemark, the push for privatization in infrastructure investment is consistent with Trump’s rhetoric. “One thing we know is that there’s no way private-sector entities would be involved with an infrastructure project unless it involves user fees or ways to make revenue,” he says. “That changes the decision-making process. It’s the perspective of a profit-making private company, not the public sector.”
Selections from:
Message from the President – Lincoln Institute for Land Policy
Values and the Value of Land
April 2017
Appears in Land Lines, April 2017
Because the supply of land is fixed, demand determines its price. As such, landowners enjoy monopoly power and garner the full amount of price increases generated by higher demand. And over time, demand for land tends to increase. Because landowners do nothing to “earn” the windfalls of price appreciation, many economists and philosophers have considered them ill-gotten gains. This is best expressed by John Stuart Mill in Principles of Political Economy (1848):
Landlords… grow richer, as it were in their sleep, without working, risking, or economizing. What claim have they, on the general principle of social justice, to this accession of riches? In what would they have been wronged if society had, from the beginning, reserved the right of taxing the spontaneous increase of rent?
This normative view is also fundamental to arguments put forth by Henry George in his most famous work, Progress and Poverty (1879). He proposed taxing away this unearned land value to support the functions of government and to eradicate the poverty that accompanied the unparalleled opulence produced by the Industrial Revolution.
Land value capture is based on the notion that the public is entitled to all, or a portion of, land value increases that result from public investment in land improvements or public actions that increase land value. If a municipality pays for roads, sewers, or public transportation that increase the value of proximate land, the municipality is entitled to recoup some, or all, of this increased value from landowners or developers. Similarly, if a city rezones a neighborhood to permit more dense development, the city is entitled to a share of the resulting land value increase. This recompense is predicated on a basic principle: those responsible for creating value should reap some, if not all, of the benefits.
Those adhering to a narrow view of private property rights might argue that all land value belongs to the owner, regardless of its provenance. According to this view, any attempt by the government to claim even a portion of land value increases would constitute a “taking,” which violates constitutional protections of private property. In the end, such principle-based debates are weighed and settled in the courts.
In Latin America, the courts have defended the sale of development rights against claims of property rights abridgement and illegal “takings” by the state. Since they were something that landowners did not possess, they could not be taken from them. Similarly, inclusionary zoning and other forms of value capture have survived constitutional challenges in other countries and U.S. states. Today, some form of land value capture is practiced almost everywhere.
In the coming two to three decades, the world will confront the tremendous challenge of accommodating the billions of new residents expected to migrate to cities around the globe. This will require significant investments in new infrastructure—for transit systems, water and septic services, and housing. At the same time, the world will need to address its penchant for deferring costly maintenance of existing critical infrastructure. All in, this will require an annual global investment of $5 to 6 trillion (USD). Without magical new sources of revenue to cover these outlays, many cities and countries are casting around for ideas, and many are finding the answer in land value capture. In nascent formal efforts to compare expenditures on basic infrastructure and land value increases in Latin America, we’ve seen total land value increases exceeding infrastructure investments by a factor of six. In other words, capturing around 16 percent of land value increases in these cases would repay the full infrastructure investment.
At the Lincoln Institute, we are comfortable with the principle that those who create value deserve at least a share of that value. Studying and spreading the use of tools that capture publicly created land value for public purposes brings us back to our roots.
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Privatizing public infrastructure for profit and spending $1billion of public funds for tax breaks, or capturing private land value increases that ensue from public actions to help pay for infrastructure… Which is the better deal for U.S. taxpayers?
