Land Value Scale

The range of land values in this country is much wider than most of us realize. In fact, the values of houses and apartments vary considerably less than the value of the sites they sit on.

A few years ago, a friend reported that agricultural land in his part of Vermont was selling for $2,500 per acre. That was interesting: land in the least-dense part of a town less than an hour from midtown Manhattan, in a one-acre zone, was selling for $250,000 per acre, or 100 times the value of Vermont agricultural land. That was a rather amazing difference.

But it pales in comparison to the difference between the value of that one-hour-out acre and value of an acre in midtown Manhattan: toward the end of the 90s, a one-acre site with some obsolete buildings sold for $250,000,000. The buyer immediately tore down the buildings, at some cost, to get a vacant lot on which to build.

That urban acre, then, was valued at 1000 times the one-hour-out lot! Which means that it is worth 100,000 times the Vermont agricultural land!

Does the current owner of the land make it valuable? Did the previous owner of that acre cause it to be worth $250,000,000 (plus the cost of razing and removing the obsolete building that had occupied the site)?

About 70% of us are homeowners. But the land on which our owned homes are located is not America's most valuable land. If we call Vermont agricultural land a 1 on the 1-to-100,000 scale, and one-hour-out 100 on that scale, and midtown Manhattan 100,000, most of us live in the 1 to 30 range.

Many of the 30% of us who are renters live on land in that 100 to 100,000 range -- and pay high rents for the privilege. The question, of course, is who is entitled to keep that rent. Tradition says that whoever has title to the land gets to keep it; Georgists argue that the land portion of that rent belongs to all of us, and is the rightful basis for our common spending.

The Manhattan or other landholder doesn't make his land valuable. It is valuable because of New York's airports and commuter trains and buses and subways and ferries and highways. It is valuable because its neighbors provide services to people who would come to New York: Broadway shows, and tourist attractions and corporate headquarters and the apparel district and hotels and restaurants, and all the other services and goods that a healthy and active marketplace provides.

Who is entitled to that benefit? The current holder of the land? That's been our tradition, but is it just? Is it logical? Does it produce shared prosperity, or just some rich absentee landlords (corporate and individual)?

What will urban land be worth a decade from now? A generation from now? Will your grandchildren be able to afford a home? Will most of their income go to the landlord or the mortgage lender? If you think not, what do you see causing a change?

This website shares the key to understanding the dynamics, and to remedying the problem and creating justice and prosperity for all.