Land Value Capture in Practice: Ethiopia's Urban Land Lease System

Posted by surprisetalk 2 days ago

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Comment by dzonga 1 day ago

over the long run land-leases have proven effective e.g with Shenzhen.

the people that need the land - lease it first - develop it. if you don't develop it - you don't realize any gain from it. thereby removing speculation.

Comment by londons_explore 23 hours ago

I don't think you can look at any lease system and claim success until leases have expired and been reissued many times and the system achieved steady state.

That isn't the case in Shenzhen.

Comment by aeternum 6 hours ago

Long-term leases seems very similar to ownership, ultimately equivalent. Like what is the difference really between a 70 year lease with automatic renewal vs. owning the land?

There is still speculation with these long-term leases, and the article even mentions that the leases themselves became marketable assets, very similar to a land deed.

Comment by jongjong 1 day ago

The idea of investing my hard earned money to build on land I don't own sounds incredibly foolish. You're completely at the mercy of the counter-party. You don't own it, they own you!

Comment by tancop 21 hours ago

It's a fixed long term lease from the state that often comes with a right to renew, not rent you pay to a landlord every month. They can't just decide to take it back and kick you out (unless the government is corrupt, but then it doesn't matter if you fully own it because they will do it anyway).

Comment by motionlessveloc 1 day ago

Eminent domain exists all over the world, you can be kicked off your land even if you own it if the Vogons in government decide they need it for the hyperspace bypass.

Comment by idiotsecant 17 hours ago

Yes unlike in systems where you buy your land and are completely at the mercy of the government not to seize it for eminent domain or taxes or...

Long term government land leases are a good thing. The only thing that they inhibit is dynastic wealth which seems like a bonus to me!

Comment by motionlessveloc 1 day ago

Glad to see the article mentions Singapore, which is perhaps a more realistic comparison point to most modern cities than Ethiopia, which is a bit of sui generis mix of desperate poverty, decades of top-down Marxist planning, and an economy that's somehow still sputtering along (at least in Addis) despite all this and several raging civil wars.

https://progressandpoverty.substack.com/p/singapore-economic...

Comment by asanineassasin 19 hours ago

Christian working morals

Comment by fellowniusmonk 1 day ago

This is incredibly interesting and I wish someone made an index of all of these approaches and their nuance.

The tension of the two ideas, 1. that a babbling brook in a field that has been there for a million years and the patent absurdity of saying someone can own it. 2. that a person needs a place to call their own.

This objective fact and the following emotional motivation are under explored in the empirical space, and I really think we should make better strides in trying to measure these things.

Comment by ndoddhdudhhd 1 day ago

Isn’t that completely normal in most of Asia?

Comment by larsiusprime 1 day ago

Varies highly from country to country. Also as the article itself points out where it offers critiques of the Ethiopian system, the details matter a lot.

Comment by intrasight 1 day ago

Only "urban" land? Who owns the rest? Can no new urban land be created? Or does the government take it by eminent domain?

Comment by motionlessveloc 1 day ago

Ethiopia is at least notionally a Marxist state without private property, so land is held by "the people", meaning the state.

Comment by aaron695 1 day ago

[dead]

Comment by jongjong 1 day ago

This article is clearly about Geoism; its traditional interpretation. In its essence, Geoism should be about rents, not about land specifically. Of course they couldn't have known about tech platform monopolies back then, but they are very much about rent extraction and a far greater concern than land is nowadays. I feel like such articles are a distraction and would lead to even bigger problems. Essentially prepping to dispossess middle class land owners who are the last bastion of decentralization.

It's absurd in this day and age to be discussing land rent-seeking when the cause of most of our modern problems is platform rent-seeking. Frustrating how people twist everything good into something bad; of course there was no talk of Geoism when land rents were the main problem and main mechanism of rent extraction; only now that elites have found a different way to extract rents, now it's OK to discuss the (now) lesser evil of land rent-seeking and distract away from the new variant of the problem.

Comment by mlinksva 1 day ago

You're dramatically underestimating land rent, probably well over $10t/year, total land value over $200t.

Comment by grafmax 15 hours ago

Real estate is 13.7% GDP, finance and insurance 8.7%, healthcare 7.5%, info/tech 5.7%, utilities and mining 3% - rentier capitalism is roughly 40% of the US economy.

George held land value as the only worthwhile rentierism to tax. The problem is bigger than just land value or platforms.

There is a reason billionaires astroturf [1] support for these half-measures. The "moats" they own (the monopolies and oliogopolies) are where they derive their wealth. tax

[1] https://coefficientgiving.org/research/announcing-our-new-12...

Comment by sagarm 5 hours ago

Are you trying to argue that finance, insurance, healthcare, tech, utilities, and mining don't produce anything? That's a pretty out there opinion.

Georgism calls out land because the supply is essentially fixed, so there's no economic cost to taxing it. In addition the value of it collectively created.

Every industry you named above absolutely responds to price signals.

Comment by jongjong 1 day ago

Maybe, but at least they're not depleting my access to opportunities like platform rents do! In the old days, I could still find opportunities in my social circles to earn money to cover the rents because they still had money.

Platform rents are worse because they extract wealth by centralizing awareness, centralizing opportunities and literally shrinking the pie whilst concentrating wealth for those in the middle. They prevent me from finding opportunities which would allow me to pay the rents which they extract from me and my social circle! My social circle has no money so I can't rely on them! Only way to make money is a bs bureaucratic job working for a monopolist.

It's worse, satanically worse! Mark my words, with the current approach we will be forced to go either UBI route or start charging people proportionally to their incomes using universal digital ID to check. And the 'AI taking jobs' narrative is already in place to provide a phony justification!

Opportunities are depleted systematically from the periphery. "I make my own luck" is bullshit when when the entire system is working 24/7 to ensure you don't get any! The average elite ignores more life-changing opportunities in their inbox, every minute, than I'm exposed to in a lifetime!

Literally, elite rent-seekers took all the money and now there is no more to take! The system is now trying to saddle people will useless debts! Getting them to spend it all on their useless junk (pointless gender studies university degrees, ads for their marketing/lead acquisition startups, fake magic internet money, junk bought on credit cards...)! And then forcing them into bankruptcy for a few years, move onto someone else, then when that first person's bankruptcy period is over, repeat!!! They do the same thing with shell companies; saddle them with debt, funnel the money to the beneficiary company, let the shell default on its debt, then repeat. This is the backbone of the modern economy. It's utterly insane! The system is completely broken!

Comment by mlinksva 15 hours ago

Yes they (land rents) deplete access to opportunities (don't know about _your_ situation in particular) -- the "housing theory of everything" is one articulation -- far greater than platform rents (which I'm also not a fan of; look at my comment history and you'll occasionally see me calling for ad taxes). Even platform (or more broadly tech) rents are often taken by landowners, who are not as subject to competition.

Comment by Frieren 1 day ago

When a country main form of getting rich is thru rent (land, platforms, or any other). That country becomes economically sick. The middle ages were dominated by land Lords. War to increase land ownership, no social mobility, and economic stagnation were the norm.

Platform rents are really bad. And for land rents, it would make more sense to be a public good that finances the government that privately owned and creating a owner class that gets all the profits from society production.

> Literally, elite rent-seekers took all the money and now there is no more to take!

There is more money to take, that is why they push for conservative governments that reduce taxes for the rich and eliminate laws that protect the working-class.

Creating new things should be incentivized over platforms that take a cut on the work of others.

Comment by jongjong 1 day ago

This is true but I don't see that alternative approaches prevent an owner class from developing. It just creates a different kind of owner; a more politically-oriented one, with an incentive to manipulate the political system to their benefit to increase their stake in it. People then strive to become stakeholders of the state itself. I don't think that's a better form of ownership.

I'd rather capitalists be distracted pursuing land ownership rather than pursuing ownership over the machinery of ultimate power and control.

If you remove tangible forms of ownership, people will try to claim ownership over intangible things instead, like state power.

Comment by viklove 1 day ago

People are really going to dislike what you're saying

Comment by preisschild 21 hours ago

Its Georgism, after Henry George

Comment by panick21_ 15 hours ago

Georgist from the beginning did care about other form of rents, like resources.

Land rent-seeking is still incredibly important. Saying all modern problems are from platforms is silly considering that most people spend far more of their budget on their living situation, compared to paying money to apple or google.

And its much easier to switch from apple to google or other platforms.

> of course there was no talk of Geoism when land rents were the main problem

There was the whole time. Who are you talking about?

Who made discussing georgism illigal?

> lesser evil of land rent-seeking

Its crazy to suggests its a lesser evil.