b'MUDD 25 - Urban Intensity l Urban Design - Sydneylimit to development is just as much a permissionBy the mid-twentieth-century, he was arguably the to develop. The mosaic of property rights cannot bemost famous American economic writer and his book understood as a jumble of independent private rights:probably had a larger world-wide circulation than any it is an integrated ensemble of rights that are sociallyother work on economics ever written (Soule 1955, created and publicly defined. p.81). And as an aside, if you have ever played Monopoly you were playing a game designed in 1903 by Elizabeth How well are those rights defined? They are oftenMagie to teach the advantages of a single tax on land. defined badlyas blanket rules regardless of locationalIn its commercialised form, it still demonstrates exactly differences, as vague and even unintelligible rules, asthe issue that George addressed: how the control of rules requiring interpretation by unreliable politicians or(untaxed) urban land tends towards a monopoly of unskilled officialsbut it is true that any rules are a lotwealth (the winner) and impoverishment of the rest (the better than none, since they establish the rules of thelosers).game and reduce the risks to the point where investment is feasible.In Australia, Henry Georges radical ideas led to state and local property taxes being raised on the unimproved Wise words were written on this subject 100 years ago.value of land rather than the market value of the land, British economist Edwin Cannan (1861-1935), in his worka crucial distinction and one that is central to current on Wealth, addressed the issue of competing interests ofdebates in Australia about replacing transaction taxes the kind that arise in the close confines of the city, wherewith increased land taxes. Similar reasoning might apply the positive and negative impacts on neighbours canto taxes on capital gains: for urban property, it is mainly be random and unreasonable. In his matter-of-fact way,the increase in the unimproved land value that is being Cannan described the problem as it might apply to urbantaxed. 2 development. If urban land is not taxed at all, the value of the The state resolves the difficulties not alwaysproductivity gains and investments of the entire society precisely in the best conceivable manner, butaccrues to private land. Those private land parcels in a rough and ready 1 fashion which is vastlymonopolise the locational value at that placeand the better than leaving them alone (Cannan 1914,locational value is the entirety of the value of urban land. p.85). Alternatively, if urban property is taxed on the market valuethe value of the land together with all buildings, The state intervenes by necessity, and these daysplant and structuresthere is a penalty on investment invests significant public revenue, and often losesand a disincentive to use the land productively. The substantial political capital, in creating an orderlyfairest and most efficient way to tax urban land is to market for urban development. Thevery fact thattax the value of the vacant (unimproved) land, so that development rights must be defined gives policy makersa proportion of the unearned increment is returned to an opportunity to shape the property market in thethe public which created it. If the full annual value of the direction of better social, economic and environmental outcomes. In the MUDD program, this is what is meant by urban design as public policy (Barnett 1974).Governments continue to pretend that most of the city is privateThe political economist and writer Henry George (1839 1897) had great insight into the economics of urban land, and how urban property rights affect prosperity and equality. His most famous work, Progress and Poverty, was highly influential in the decades either side of 1900 (George,1879). In essence, he observed that economic progress of the nineteenth-century American kind ledEverybody works but the vacant lot directly to greater impoverishment. Source: New York Public Library86P3-20200301-SYDNEY STUDIO.indd 51 2020/3/5 21:53:26'