b'vacant land is taxed, as George advocated, land willunambiguous interest of the state to use scarce not be left idle or underused, but will go to those whoresources to build a lighthouse where shipwrecks can use it most productively, and land hoarding andoccurred. Once built, it was free to use by everyone. Of speculation will end.course, all shipping in the area could be charged port While many agree that much good would result fromfees to pay for lighthouses (and it was in the interests such a tax, no-one has worked out how to transitionof ship owners to pay for lighthouses) but there was from urban land as an accelerator of private wealth andno mechanism or intention to charge passing ships inequality to urban land as a public good (see below).that also benefited from the lighthouse (it was non-excludable). Once built, the use of the lighthouse by Despite the impracticality of Georges policy of raisingone ship in no way reduced access to the light by all or most public revenue by taxing, in full, the annualanother ship. It was just there, and it could not be used (rental) value of urban land, his insight was profound.up (it was non-rivalrous).Urban land parcels owned (or controlled) by private (or quasi-private) entities are the sites where mostNational statistics are another example: when they are investment, innovation and risk-taking occurswherefreely available, the intensive use of expenditure and productivity and therefore overall wealth increases.demographic data by retailers and land developers The buildings, structures and plant on the land aredoes not rival others use of the data. Free, open-legitimately regarded as private, but the wealth thatsource software would be a contemporary example.often continues to accrue in the form of increases in the unimproved land value is only marginally due to theWhen we think of private urban land, there are many owner/investor/developer: overwhelmingly, it reflectsmeanings and layers. On the one hand it is the opposite public and private investments in the city as a whole.of a public good: access can be excluded and charged Property taxes, especially in Australia where the principalfor; the use by one will immediately limit or exclude the private residence is exempt, do little to recover thisuse by anotherits as if nothing had changed since shared wealth. the days of Henry George and Elizabeth Magie. The value of your landthe unimproved value as aYet conditions have changed fundamentally in the past vacant site, not including the value of any buildingscentury, in laws, concepts and norms. Urban land is and other structuresis an urban value, the sum of allintensively regulated, and taxed in ways that fall far the positive and negative influences on the site fromshort of the Georgist agenda but which nevertheless surrounding development, near and far, as they apply tochange the game. It now makes sense to say that, the defined development potential of the site. When yourat a metropolitan scale, the development potential of client or employer buys an urban site, the price of theurban land is a public good. A century after Cannan, land is not something intrinsic to the site. The price is theit is still rough and ready, and somewhat wild west, market or investment value of the regulations definingbut the developers private site is seen by politicians, the purpose of the land, and the overall impact of all theregulators, partners, financiers, advisers, adjacent other investments around the site if it is used for thislandowners and residentsand hopefully by designers purpose.as an instance within a mosaic defined by the site rules and the district values.In sum, the value of urban land is created by the public. In this sense, at least, urban land is a public good. If the source of land value were more widely understood, and if it were explicitly taken into account Private urban land as a public good by governments, our cities, our infrastructure and individual projects would become more efficient, The term public good can be used in a relaxed waymore innovative, more equitableand less driven by like public interest, or it can be technically precise, asrent-seeking and speculation involving exponential debated by economists. If you are involved in urbanincreases in the unimproved value of urban land. development, acquiring an understanding of the termResidential prices in Sydney are becoming increasingly public good is valuable. Here is the standard definition:unaffordable not because of the cost of constructing a a public good is both non-excludable and non-rivalrous.dwelling, but because of the publicly-created, privately-A traditional example was a lighthouse. It was in theheld value of the underlying land.87P3-20200301-SYDNEY STUDIO.indd 52 2020/3/5 21:53:40'