Price of land in NY/NJ area

A new report from the New York Federal Reserve Bank looks at land price patterns around their metropolis (specifically, New York City less Richmond, plus ten New Jersey counties). Like Barker’s work noted here last year, they used sales of vacant land to indicate the value of land in general. But while Barker’s purpose was to estimate total land value and land rent, the New Yorkers’ objective is to see how land prices relate to parcel location and other characteristics, and describe trends over the 1999-2006 period.

Defining the center of New York as the Empire State Building, of course they found that the distance thereto is inversely proportional to land value. They observed a very sharp increase in average prices, from $46.65 in 1999 to $366.08 in 2006, with the increase especially pronounced in land intended for residential use.   Of course this rate of increase cannot be sustained, as a subsequent analysis might document.

The paper notes that even vacant land may be “improved,” for instance by having been graded and having utilities.  Improved lots of course are more valuable than otherwise identical lots.  So do Georgists want to tax the improved value or the “raw” value?   I think it was William Vickerey who pointed that this really isn’t a big problem. Either could be used as a base, as long as assessment practice is consistent.

Thanks to Richard Biddle and CityEconomist

GAO on Funding Infrastructure

No great surprises in the new Gov’t Accountability Office report on: PHYSICAL INFRASTRUCTURE  Challenges and Investment Options for the Nation’s Infrastructure.  (Summary, full report).  Roads, bridges, dams, railroads, airports etc are decaying and not keeping up with “demand,” and existing funding methods are proving inadequate.   Is there a cheaper way to meet the needs? The report does not say.  Is it worth spending what it costs to update the facilities? Not discussed. And perhaps most importantly, is there a way that the owners of land benefiting from infrastructure improvements could be made to pay for them?  Well, one sentence recognizes some approximation of the possibility:

A variety of taxes have been and could be used to fund the nation’s infrastructure, including excise, sales, property, and income taxes. (p. 15)

That’s all.

Cab medallion prices continue to rise

Fifteen months ago, I noted that Chicago taxi medallions were selling for about $77,000.  Now, per the May ‘08 issue of Chicago Dispatcher,  the median price increased in April (based on data thru April 22) to $125,000.  That’s a 62% increase in 14 months– with no increase in fares (altho a gas surcharge which was allowed subsequently doubtless was anticipated).

Of course the medallion owners, as such, contribute nothing to the provision of transportation, but they do impose a cost on passengers and/or drivers.  Limiting the number of cabs doesn’t increase the earnings of drivers.

Why would sugar-exporter Fiji import sugar?

Because the European Union has agreed to buy 229,000 tonnes of Fiji-grown sugar, at prices above the world market.  That might leave Fiji without enough sugar for domestic consumption, so they’re importing 45,000 tonnes from India. I bet those Indian producers would like that premium price.  (Unfortunately, the article in source fijilive.com doesn’t specify exactly what the prices are.

News search engines; transit and traffic too

Last night I decided to avoid Red Line delays by taking route 147 north instead.  Everything was pretty fine until we approached Loyola.  All traffic was diverted in both directions.  Cars were going west (to where?).  Buses were just sitting there.  Although there seems to be plenty of room to u-turn and reroute to Clark Street, apparently cta wasn’t able to do this. Or maybe Clark was too congested.

I got off the stopped bus, walked up to the blockage, the entire street was closed off with yellow tape, tho sidewalks were open.  No indication of what happened, so I went upstairs to the red line (which was performing its own delays, but restored service after a few minutes).  So why was the street blocked?

This afternoon I used news.google and news.yahoo to answer that question.  Searching for “sheridan” and “loyola”, google was unable to come up with anything relevant, while yahoo linked to four articles (well, actually four copies of two articles) which explained that pedestrian had been killed crossing the street.   (Even googling for the name of the victim yielded nothing.) Which doesn’t explain why buses could not have been allowed thru while the investigation was conducted.

Update on Consumer Taxes

The Civic Federation has updated their compilation of Chicago consumer taxes, noted last year.  This includes the additional 1/4% RTA sales tax effective April 1, but not the Cook County sales tax increase going into effect later.

Racism and land value taxation

Prosper Australia exec Gavin Putland has written an insightful analysis (“Still on the Mountaintop”) of how a policy of taxing productive activity almost guarantees, under American conditions, that blacks will suffer economic discrimination and be overrepresented among the poor and unemployed.   The link is thru NAIRU, which requires a substantial level of unemployment in order to prevent ruinous inflation.

“full employment” means enough unemployment to cause enough wage restraint to give stable inflation. So we’re living in a system of enforced failure. A percentage of people have to be unemployed, and therefore, at the boundaries of unemployment, another percentage of people have to be underemployed or intermittently employed or precariously employed. In other words, the economy is being run in such a way that a certain percentage of people have to be losers.

He explains what seem logical reasons why Africian Americans, rather than other minorities or the entire labour force, bear this burden.  The solution is to tax “land-like assets”  instead of “house-like assets” and the work that goes to produce them, resulting in increased employment opportunities with less inflation, among other benefits.  The piece includes detailed explanation of why even landowners will be better off under this reform.

Even experienced Georgists will benefit from reading Putland’s accessible explanation.

Unruly Americans

Just finished Woody Holton’s Unruly Americans and the Origin of the Constitution.  He’s not the first to point out that the Constitution was established largely to protect the interests of creditors, especially those holding government bonds used to fund the American Rebellion.  Bond speculators benefited, as did all creditors, with the states prohibited from issuing paper money, and a federal court system established. Holton gives relatively little attention to land issues, tho he notes that under the Confederation the cost of using the military to secure western land exceeded the revenue from land sales.

The Constitution provided for significant federal military, which not only protected settlers (and their landlords) from Indians but also could aid in putting down slave rebellions.  Holton notes that, by making debts more enforceable, the Constitution also made credit more available to Americans.  He doesn’t seem to doubt that more debt would be a good thing.  He also seems to think that tariffs were an appropriate source for federal revenue, tho acknowledging that excise taxes, such as on whiskey, could lead to difficulties.  He approvingly notes that higher tariffs allowed the easing of taxes on land.

Henry George, of course, opposed tariffs as a hindrance to trade, and thought government at all levels would best be funded by a tax on the value of land and other natural resources.  And George suggested that a government which does not assist in collection of private debts might discourage excessive lending.

Despite his apparent failure to appreciate such economic fundamentals, Holton’s book is well worth the read for a description of the conditions and methods which brought about the original U S Constitution.  (There is a little discussion of the Bill of Rights, which Holton sees as having been promised as one of the compromises necessary to get an elite-favoring constitution ratified, and even less of the subsequent amendments.)

“No country in the world affords such a field for speculations both in paper and land” as the United States, Noah Webster declared in 1791.  One of the most successful of the speculators was Abigail Adams.   [-- page 267]

Bus Rapid Transit and Land Values

Network effects seem to be the main impact of bus rapid transit on land values, at least according to a Lincoln-supported study of Bogota, Colombia.  The analysis suggests that an extension of BRT service in 2003 may have had little impact on land prices in the area of the extension, but greatly increased land costs in an area which was already served by BRT previously.   The explanation could be a network effect– as the area served by BRT expands, the value of access to the system also expands.  A 15%- 20% increase in “property” value was found.   Obviously if one were looking only at land value, the percentage would be higher. Also, the data source was asking prices rather than actual transactions.

The study is described here (free registration required, or use bugmenot) , and a more detailed working paper is here (ditto).  The basic finding is that, yes, you can expect to fund transit from a land value tax, and it can be appropriate to use systemwide funding sources to pay for extensions.

I would have said that there is no “bus rapid transit” service in Chicago, but I can’t refute the wikipedia claim that the McCormick Place Busway is BRT.  For regular transit passengers here, however, there are no bus routes which are isolated for any distance from automobiles and other traffic.

At least they spelled the name right

I’ve gotten reports from a couple of HGS friends about Jonah Goldberg’s Liberal Fascism, which mentions Henry George a couple of times, not in a favorable light. I rarely find it worthwhile to read Goldberg’s columns in the Tribune, so I would hardly waste time reading his book, but I have been lent a copy of it and found two references to Henry George in the index.

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