Land as a Real Estate Asset
Why we have urban sprawl and what can be done about it.
Landowners, farmers and ranchers in particular, do not do a decent job of managing their lands as a real estate asset. If they did, urban sprawl would not be an issue. Landowners need to recognize the value of their property is largely external. "Location, location, location" means just that... a property's value is mostly determined by what surrounds it.
To realize the full potential of their property, economically and environmentally, property owners have to work with their neighbors. Parcel and political lines rarely recognize economic and ecological realities. Property owners are forced into Hardin's Tragedy of the Commons because they have no control over other's land use decisions. As properties are planned, conserved, and developed, each individuals' decisions spill over into the next property affecting its potential and its value. For example, a conservation easement on one parcel may cause another to be developed as it is now next to protected open space. On the other hand, a new subdivision may ruin a young farmer's plans for expansion. The risks, traffic, and escalating taxes being too much to overcome.
All this can be avoided through better planning. Actually, better planning isn't the problem. Implementation is. We all use the best techniques available, we all want to do the right thing, but when it comes down to it, individuals will always act in their own self-interest, versus the good of society. We can't fault individuals for that, we simply need to change the rules of the game so we can all benefit from their choices.
The main change necessary is land securitization. If property owners pooled their land resources under a corporate umbrella in return for pro rata equity shares in the business that managed conservation and development regionally, they could control the supply of land in to markets, improve conservation sustainability, and better manage the process of how raw land parcels convert into urbanized areas.
This is called landpooling. Property owners set a vision and create a business to implement their plans. Conservation and development can occur where it is most appropriate, and regardless where each happens. If property owners want or need instant liquidity it is available without unplanned development further fragmenting the landscape. If they wish their heirs to gain from their foresight, they simply pass on shares of stock or membership units in the landpool business.
This blog will discuss this and other ideas I have. I hope you find them of interest and I hope you participate in these discussions. I am open to honest, critical insights and comments. I truly hope to advance the thinking of planners, developers, conservationists, and landowners through these discussions.
Thanks for reading... David
Landowners, farmers and ranchers in particular, do not do a decent job of managing their lands as a real estate asset. If they did, urban sprawl would not be an issue. Landowners need to recognize the value of their property is largely external. "Location, location, location" means just that... a property's value is mostly determined by what surrounds it.
To realize the full potential of their property, economically and environmentally, property owners have to work with their neighbors. Parcel and political lines rarely recognize economic and ecological realities. Property owners are forced into Hardin's Tragedy of the Commons because they have no control over other's land use decisions. As properties are planned, conserved, and developed, each individuals' decisions spill over into the next property affecting its potential and its value. For example, a conservation easement on one parcel may cause another to be developed as it is now next to protected open space. On the other hand, a new subdivision may ruin a young farmer's plans for expansion. The risks, traffic, and escalating taxes being too much to overcome.
All this can be avoided through better planning. Actually, better planning isn't the problem. Implementation is. We all use the best techniques available, we all want to do the right thing, but when it comes down to it, individuals will always act in their own self-interest, versus the good of society. We can't fault individuals for that, we simply need to change the rules of the game so we can all benefit from their choices.
The main change necessary is land securitization. If property owners pooled their land resources under a corporate umbrella in return for pro rata equity shares in the business that managed conservation and development regionally, they could control the supply of land in to markets, improve conservation sustainability, and better manage the process of how raw land parcels convert into urbanized areas.
This is called landpooling. Property owners set a vision and create a business to implement their plans. Conservation and development can occur where it is most appropriate, and regardless where each happens. If property owners want or need instant liquidity it is available without unplanned development further fragmenting the landscape. If they wish their heirs to gain from their foresight, they simply pass on shares of stock or membership units in the landpool business.
This blog will discuss this and other ideas I have. I hope you find them of interest and I hope you participate in these discussions. I am open to honest, critical insights and comments. I truly hope to advance the thinking of planners, developers, conservationists, and landowners through these discussions.
Thanks for reading... David
posted by David Renkert at 9:39 PM
1 Comments:
Thank you for your work addressing these issues, and for your informative postings! Especially for those of us unfamiliar with the dysfunctional nature of how our land is developed. I think that the more people become aware of the prevalent systems these days, the more support you will (inevitably) garner for your landpooling projects. Thanks for spreading the word to the community and helping effect change.
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