Land Value Tax and gentrification

Submitted by Matthew on 11 November, 2015 - 11:11 Author: John Cunningham

I agree with the main points made by all contributors in the discussion on gentrification (Solidarity 378, 379, 381, and 382). I particularly endorse the condemnation of the vandalism inflicted on the “Cereal Killer” cafe.

The futility and stupidity of this “action” by a bunch of apolitical louts masquerading as anarchists reminded me of the equally futile and pointless spate of cottage-burning by a small group of Welsh nationalists calling themselves the “Sons of Glyndwr” back in the 80s. Their targets were second homes bought by English people. This campaign of arson, which went on for a few years, achieved precisely nothing and eventually petered out.

None of the contributors have mentioned the possibility that a Land Value Tax may help to curb the worst excesses of gentrification, particularly the displacement of long-established residents. A Land Value Tax (LVT) is a tax on the rental value of the undeveloped land, ignoring any buildings, amenities etc. actually on the land. It is not a property tax, nor a wealth tax. LVT would encourage landowners to use their land in some way. It would be a strong disincentive to “hoard” or “sit” on land. In other words, it would deter land speculation. Brownfield site development would be boosted, while the increased home-building that would ensue would help keep rents down as more homes would be available both for established residents and new comers. A certain percentage of the income from LVT could also be ploughed back into the community and used to bolster or subsidise services important for established residents, e.g. public laundries, local bus services, community centres, pubs, corner shops. Because land prices are inextricably linked to property prices, a LVT would restrain property prices, benefitting everyone. LVT is not a panacea, but it would go some way to alleviating some of the worst aspects of gentrification. However, I don’t think gentrification can be stopped. There is something inevitable about the process and not all of it is undesirable (as previous contributors have pointed out). There is much more to be said about LVT. There are strong arguments for and against. It would a good debate to have aired in the pages of Solidarity.

My second point relates specifically to Bruce Robinson’s call for the nationalisation of land (Solidarity 381). I think this would be a retrograde step (even if it were achievable). Land nationalisation would be such an immense step because land touches on every aspect of our lives. Advocates of land nationalisation would need to explain how they are going to administer, control and plan for such diverse and demanding (and potentially conflicting) areas of social and economic practice as farming policy (which would include your attitude and policies towards the National Farmers Union), the Common Agricultural Policy, land tax, land inheritance, the National Parks, green belt policy ecological issues, planning permits, rural transport and amenities etc. etc. This is simply too much. There is a great danger that nationalisation would create a lumbering bureaucratic giant which would be of little use to anyone. Better to opt for local/regional-based solutions such as giving more powers to local councils, local co-ops, an alliance of small farmers, community groups in urban and rural areas, etc.

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