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The Scam That Is Urban "Land Use" Planning

February 7, 2018 in Economics

By Lee Friday

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By: Lee Friday

For many years, property owners with vacant buildings in London, Ontario have applied for a 30 percent rebate on their property taxes. However, City Council decided to cut the rebate in half for 2018, then eliminate it entirely at year’s end. Additionally, despite insufficient parking in downtown London, Council is seriously considering a reduction in the number of parking lot permits.

Ending the rebate and reducing the number of parking lots will stimulate development, according to the politicians. Unfortunately, these actions may produce the opposite result.

Regarding the tax rebate, the London Free Press (LFP) quotes Councillor Stephen Turner:

The policy benefits land speculators, those who buy land to sit on it, and hurts development . . . We want to offer incentives to develop, not disincentives . . . If someone has been holding on to a vacant building since 1998, they are clearly speculators. That decreases development potential . . .

Similarly, Councillor Tanya Park was quoted by the LFP:

Any owner with vacant lots downtown are not doing themselves or the city any service. The earning potential is huge . . . It behooves one to get them (developed). . .

The Scourge of Speculators?

Politicians constantly vilify “speculators.” We are all speculators! Each of us makes decisions on a regular basis, the outcomes of which are often unknown to us until some future time. This means we are speculating. My wife and I decide to dine at a restaurant that is new to us. We may love it. We may be disappointed. We are speculating.

When entrepreneurs initiate new projects, they do not know if they will be successful. There are many unknown factors awaiting them, not the least of which is the fickle, discriminating consumer. Entrepreneurs are speculating, and most new businesses fail within five years.

Our standard of living i.e. the goods and services we enjoy in modern society, are an outcome of successful entrepreneurial efforts. Thus, speculators should be praised, not condemned. As Ludwig von Mises wrote in Human Action:

. . . dealing with the uncertain conditions of the unknown future – that is, speculation – is inherent in every action, and . . . profit and loss are necessary features of acting which cannot be conjured away by any wishful thinking.

Developers Want Profits — But Also Must Avoid Losses

Councillor Turner says long-term owners of vacant land and buildings are “decreasing development potential”, and …read more

Source: MISES INSTITUTE

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