A secret map of Melbourne’s transport plans for the next 30 years was published in The Age yesterday. Doubts were raised about its authenticity (weakly, unconvincingly) by the Victorian government.
Average householders may shrug, but this is a treasure map for property pirates speculators.
“Here be Gold, mateys! Arrgh!”
Knowing when and where new links are planned is a gift to landowners who can lay themselves down in the path of progress.
Let me outline two strategies regularly employed to capitalize on knowledge like this.
Speculators can buy land next to proposed roads. Once the road is announced, areas by freeway exits are suddenly attractive to home buyers and broad acres can be subdivided and sold off as house blocks. Developers complain loud and long about infrastructure levies, but these costs are a fraction of the riches available to this time-honored wealth building technique.
Melbourne’s secret map shows the proposed urban growth boundary with new residential areas helpful colored in pink, in case speculators are a little slow on the uptake.
A quicker road to riches is to buy directly in the path of the new freeway – which cannot go through until the government owns all the land it needs. By refusing to sell and hanging on until the bitter end, determined landowners can get a payout of up to three time market prices – prices already inflated by the imminent road construction.
Neither plan is for the faint-hearted or impatient. Equally, neither plan requires the landowner to do much, just sit and wait for the suburbs to grow out to them.
Is buying farmland and holding it for many years for a certain capital gain a good use for limited capital? Does this investment strategy create jobs? Does this add to the economy? To the common good?
It does none of these things. Further, the gains can be taken when it suits the owner – taxed at a discounted rate.
My blood boils when I see wealth handed to land owners who do no more than exploit the monopoly character of land.
A Golden Age beckons to any country willing to stare down landowners. Their investments do no work. They take no risks. They demand a free ride. They insist we defer to their wishes and opinions. Meanwhile the majority of humanity sweats for ever dollar they make.
The passionate commitment of Prosper Australia to the greater use of Land Tax and the reduction of other behaviour-distorting taxes is plain and clear. We welcome the awakening of others to exactly this direction.