Christchurch CBD rebuild will allow private property owners to gain from public spending

Never has it been clearer for everyone to see, bold and plain, in central Christchurch that land is given its value by the activities of the community, not by those who own a site. And those who get the right to occupy the best land should compensate the public for this special privilege. That means they should pay regularly. Not just at the time of buying, but all the time.

The newly revealed central city plan is indeed bold and brave, and it is great to see that there is hope after those earthquakes. But hope should not include hope of private land “owners” to gain private profit from their land. Land should be part of the commons, and as such the public, through either the council or the government has the right to charge the occupiers of that land for the privilege. This charge is either called a land rental or a land tax. I prefer the former because it gives us the idea of renting it from the public commons.

Let’s see. In the new CBD plan for Christchurch they have a green belt. Nice. And those who are lucky enough to occupy the residential land surrounding the ‘green frame’ will have lovely views and a recreational area right on their doorstep. Location, location, location, as they say in real estate. It would be ideal land for renting from the public, but a good price should be paid.

Those who own land not needed for public purposes or who buy land right near the shopping precinct will of course have the special advantage of being able to walk out to do their shopping.  Those in the distant suburbs of course have to drive or catch a bus and so they should pay a lower rental on their land.

Land is also given value by nature. Hagley Park and the Avon River both give value to land. We will also have the sporting facilities, a covered stadium, a library, a convention centre, and public transport. All of these community created facilities give value to land. And the commercial hub operated by business people also gives value to land.

Here is what the Earthquake Recovery Minister Gerry Brownlee said this morning on radio: “Most of the land in the affected area has very low value and it won’t have any value until there is a plan to put things back into that part of Christchurch that creates that value. “So it’s a bit of ‘chicken and egg situation’”.

Yes, Gerry it has low value now when there isn’t much happening. But when there is a dense and vibrant core, smaller than the previous CBD so more precious and highly sought after, it will end up having huge value. Even the existence of the plan has put up its value.

So who is going to make all the profit from all this? The Government and Christchurch City Council who put billions into the rebuild and into the stormwater and sewage and community facilities? Not on you nelly. No it is the private “investors” who have the money and the property knowledge to “invest” in inner city land. It is inner city land which in fact is the most valuable in a country. Land is the top class of assets in any country and after that comes buildings.

We await with interest to find out what prices the 840 landowners will get for their inner city land required for public purposes. No doubt the Council, will like Auckland, charge them much the same for the privilege of occupying their land as it does to those in the outer suburbs. The philosophy of ‘user pays’ seems to prevail these days and we are all taken in by the argument that anyone who has sewage and water and stormwater should all pay the same. What incredible nonsense that philosophy is. It reduces the council to a service provider and completely ignores the value of location that a property has.

If the Council isn’t going to charge a proper land rental then the government must do it.