Confiscate farmland and big gardens of houses to build housing?

Patslatt1

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The Irish Independent March 7article "Inside the coalition talks bunker" discusses politicians' advocacy of confiscation of land as a solution to housing crisis as advocated in the 1973 Kenny report beloved by socialists. This report suggested compulsory purchases at a premium of 25% above agricultural land values.
That 25% would amount to confiscation where the land values are often a big multiple of the latter near urban areas. Already there is a confiscatory tax on vacant sites that ignores the difficulties of financing, labour shortages and the lack of profitable development opportunities in many areas.
The argument for the 25% is that the development land value is an undeserved windfall gain to speculators and landowners stemming from population growth and public and private infrastructure investment. But windfall gains (and losses) occur everywhere in the economy without government confiscations.
To keep development land prices low, the government should simply invest heavily in housing infrastructure for water, sewage, roads and electric power instead of meddling in the land market.
It is usually ignored by leftists that land banks play an important economic role in the building industry. By carefully accumulating land over time for big projects, they prevent holdouts on the last few pieces of land needed to complete a development land jigsaw from charging extortionate prices. Their deep pockets enable this accumulation and provide a source of building land to small and mid size builders that can't afford to accumulate land.
The result of the tax on vacant sites will be to squeeze an affordable supply of land from land banks.
If the Kenny proposal is implemented for compulsory purchases,an affordable land supply would be available but there would be consequences. First, there would be risks of corruption given that enormous wealth is involved in urban lands. In the Spanish Costas where compulsory purchases occur, developers and local government politicians corruptly seized very valuable urban lands on the pretext of social needs. A number of them were convicted and impriisoned.
Second,the compulsory purchase of small farms would be extremely unfair. Say a 60 acre farm is worth €500,000 euro for its land at agricultural prices.A compulsory purchase at a 25% premium of €125,000 wouldn't necessarily compensate the farmer for the losses on farm buildings and equipment, let alone the market value in development. Farmers would resent that their typical small farms were confiscated while urban houses with big lawns worth a lot more than farms would be exempted by civil servants and politicians involved in the legislation. There would be massive farmer protests preventing compulsory purchases at the 25%.
Third,an important principle of property ownership would be violated. If the end justifies the means, all sorts of social causes could be used as an excuse to confiscate property. If the old age pension can't be financed decades hence, why not compulsorily confiscate a portion of the gold plated public sector pensions? Where do violations of property rights stop? Given that constitutional property rights are the foundation of a market economy, the Kenny report proposal should be seen as a long term threat to the economy.
 


Watcher2

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Yes, because we have never seen corruption involving developments in Ireland before. :rolleyes:
 

Patslatt1

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Yes, because we have never seen corruption involving developments in Ireland before. :rolleyes:
The scale of opportunities for corruption would increase enormously going by corrupt compulsory purchases in the Spanish Costas
 

Orbit v2

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The previous 80% windfall tax (or was it 90%?) was a form of voluntary confiscation founded on a completely bogus premise. So, unsurprisingly, nobody actually signed up for it.

Dermot Desmond (of all people) has an article in today's IT calling for its return. I think he's going a bit gaga in his old age. While there is plenty of rezoned land at present, this wouldn't affect the ability to crank up housing construction in the short term, but it would eventually starve the supply of new land.

Not surprising that FF made noises before the election about reducing CGT on land sales, which would have a beneficial effect.
 

wombat

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There is no shortage of land in the Dublin area, rezoning and a proper windfall profit tax is what is needed + corporation housing estates.
 

Dearghoul

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People are important, don't get me wrong. Dublin people in particular. Indeed they're more particular than anyone else anywhere in Europe, ( where building up is the norm) ,who require a little garden and a shed, as their depredations spread out across the near counties and we're left with a particularly dismal social park and green arena.

You could spread this thing from coast to coast if you wanted to.

Some enlightened planning in the UK came up with the 'Green belt area', now under threat from our Tory friends, but it was a place to breathe.
 

Rigel Kent

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Much easier to use voluntary cpo " we buy any houses "schemes to free up inner city derelict sites and rebuild up the towns and cities the problem these days is that the planners will not let towers be built around the luas stops and railway stations.
 

rainmaker

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The Irish Independent March 7article "Inside the coalition talks bunker" discusses politicians' advocacy of confiscation of land as a solution to housing crisis as advocated in the 1973 Kenny report beloved by socialists. This report suggested compulsory purchases at a premium of 25% above agricultural land values.
That 25% would amount to confiscation where the land values are often a big multiple of the latter near urban areas. Already there is a confiscatory tax on vacant sites that ignores the difficulties of financing, labour shortages and the lack of profitable development opportunities in many areas.
The argument for the 25% is that the development land value is an undeserved windfall gain to speculators and landowners stemming from population growth and public and private infrastructure investment. But windfall gains (and losses) occur everywhere in the economy without government confiscations.
To keep development land prices low, the government should simply invest heavily in housing infrastructure for water, sewage, roads and electric power instead of meddling in the land market.
It is usually ignored by leftists that land banks play an important economic role in the building industry. By carefully accumulating land over time for big projects, they prevent holdouts on the last few pieces of land needed to complete a development land jigsaw from charging extortionate prices. Their deep pockets enable this accumulation and provide a source of building land to small and mid size builders that can't afford to accumulate land.
The result of the tax on vacant sites will be to squeeze an affordable supply of land from land banks.
If the Kenny proposal is implemented for compulsory purchases,an affordable land supply would be available but there would be consequences. First, there would be risks of corruption given that enormous wealth is involved in urban lands. In the Spanish Costas where compulsory purchases occur, developers and local government politicians corruptly seized very valuable urban lands on the pretext of social needs. A number of them were convicted and impriisoned.
Second,the compulsory purchase of small farms would be extremely unfair. Say a 60 acre farm is worth €500,000 euro for its land at agricultural prices.A compulsory purchase at a 25% premium of €125,000 wouldn't necessarily compensate the farmer for the losses on farm buildings and equipment, let alone the market value in development. Farmers would resent that their typical small farms were confiscated while urban houses with big lawns worth a lot more than farms would be exempted by civil servants and politicians involved in the legislation. There would be massive farmer protests preventing compulsory purchases at the 25%.
Third,an important principle of property ownership would be violated. If the end justifies the means, all sorts of social causes could be used as an excuse to confiscate property. If the old age pension can't be financed decades hence, why not compulsorily confiscate a portion of the gold plated public sector pensions? Where do violations of property rights stop? Given that constitutional property rights are the foundation of a market economy, the Kenny report proposal should be seen as a long term threat to the economy.
I suppose it would at least give Ireland a unique USP - being western Europes Zimbabwe will certainly bring you to the attention of all that potential FDI out there.
 

Patslatt1

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A high windfall profits tax would.deter sales. Landowners would have an incentive to develop theit own land instead of selling even if they had little ability for that.
Lots of green belts protect boring UK landscapes and force youth into a lifetime of debt for home ownership.
 

Ardillaun

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I don’t know what the exact solution is but the problem has been festering for decades in plain sight and the two main parties have been disgracefully negligent about it. Dublin is a small city in a sparsely populated country. As Colm McCarthy asks on a regular basis in the Sindo, what about the prairies right on its doorstep? One way or another, they should have been developed for housing years ago. Likewise, David McWilliams has been banging on and on about people like him who are making a mint simply because they own a house, and others who are doing even better by hoarding land. Meanwhile, the next generation of productive young people can’t afford to live in Dublin and, inconveniently for some, they are still voters. FFG was warned repeatedly that a day of reckoning was coming. It pains me to see SF do so well in the recent election but my friends in FG have brought this on themselves.
 
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Clipper

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Sure, let's confiscate land from successful people and build houses for knackers to live in their gardens. What could go wrong? Oh, let's run out intellectuals too.

Successful? Farmers are, after Banks and certain MNC's, the largest welfare recipients in the state.
 

Lumpy Talbot

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No
If we wait a while there'll be plenty of light industrial and office space with attendant parking lots coming on the market in a great tide in a few years. There may be a lot more brownfield sites available than is currently envisaged.

The only reason offices exist in suburbs now is because people are used to going to them for work. There is no technological reason for offices to exist now. We are just used to them.
 

Patslatt1

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Successful? Farmers are, after Banks and certain MNC's, the largest welfare recipients in the state.
Without EU subsidies, in the highly cyclical farming commodities the small farmer would disappear. In the USA, factory farms are taking over large numbers of cow herds from small and mid size farms which are disappearing.
 

Patslatt1

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If we wait a while there'll be plenty of light industrial and office space with attendant parking lots coming on the market in a great tide in a few years. There may be a lot more brownfield sites available than is currently envisaged.

The only reason offices exist in suburbs now is because people are used to going to them for work. There is no technological reason for offices to exist now. We are just used to them.
The coronavirus could accelerate the trend of working from home.
 

Patslatt1

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I don’t know what the exact solution is but the problem has been festering for decades in plain sight and the two main parties have been disgracefully negligent about it. Dublin is a small city in a sparsely populated country. As Colm McCarthy asks on a regular basis in the Sindo, what about the prairies right on its doorstep? One way or another, they should have been developed for housing years ago. Likewise, David McWilliams has been banging on and on about people like him who are making a mint simply because they own a house, and others who are doing even better by hoarding land. Meanwhile, the next generation of productive young people can’t afford to live in Dublin and, inconveniently for some, they are still voters. FFG was warned repeatedly that a day of reckoning was coming. It pains me to see SF do so well in the recent election but my friends in FG have brought this on themselves.
FG could have won a majority or close to it under Kenney had they stimulated housing which has a powerful ripple effect on the domestic economy. Instead, FG chose to pander to NIMBYS and manipulate house prices upwards to help the banks' mortgage loans.
 

wombat

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wombat

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FG could have won a majority or close to it under Kenney had they stimulated housing which has a powerful ripple effect on the domestic economy. Instead, FG chose to pander to NIMBYS and manipulate house prices upwards to help the banks' mortgage loans.
We had a housing surplus in 2011, the biggest whinge was about negative equity.
 

Clipper

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We had a housing surplus in 2011, the biggest whinge was about negative equity.
Jesus, the housing market collapsed. Negative equity and a sudden brickwall placed in front of access to credit killed it stone dead. There was no housing surplus.
 


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