Freehold? or Leasehold?

Rolland O'Regan

[Originally published as the Preface to a book by Frank Brennan, Canberra in Crisis. Reprinted from The Rating Bulletin, issued by the New Zealand Unimproved Value Rating Assocation, June 1971]


There is an enormous social crisis centred on the modern city. World population is expanding rapidly and nearly all the millions added each year to the total must live in urban areas. There is a crisis in housing and public transport. There is air pollution, noise, ugliness and squalor. Slums spread faster than urban renewal can eliminate them. Desperate efforts at rehousing produce concentrations of high-rise hives, where sub-human living is inevitable.

The situation is aggravated by three dangerous delusions. The first is that the developer, whose prime motive is profit and not the good of city or citizen, has any but a subsidiary part to play in the building of a city. This delusion has frustrated or destroyed many splendid and imaginative efforts at revitalising American cities.

The second harmful delusion is that houses, buildings and other improvements are proper subjects for local taxation. Australia and to a lesser extent New Zealand, have demonstrated to the world the very great advantages cities enjoy when local taxes are concentrated on land values and improvements are tax exempt.

In the United States of America where local taxes are so heavy - they support police and education as well as the usual municipal services -- taxation on improvements, in effect, subsidises slums and penalises development so as to be a major obstacle to urban growth and renewal.

The third and strongest delusion of all which perpetuates the urban problem is that any great modern city can be built and its development controlled for the public good without the land of the city being publicly owned. A dynamic city must respond to changing needs, to new transport patterns, to population growth and obsolescence. It cannot do this under a freehold system because it is caught in the strait jacket of land costs. It must pay to even breathe, let alone move! This freehold delusion dies hard but dying it is. Nowhere have greater efforts been made to meet the urban challenge of our times than in England. There the thirty New Towns - providing for a million inhabitants - have been made possible only by the public acquisition of the land and the establishment of a leasehold system of land tenure,