COMMUNAL CITIES OF TO-MORROW: Part 1 LAND

Communal Cities of To-morrow 

Part 1: Land

By Noha Nasser 

 
A green community square vision by WATG London

2025: Musings of a Post-Corona Urbanist

2025 Scenario:

During the 2020 lockdown, the UK government stepped in to protect jobs and businesses by paying out billions of pounds to cover people’s basic living expenses. The economy as we knew it crashed beyond repair. Entire sectors disappeared and with them millions of jobs. Post-Corona, a new government stepped in to re-build a new economy geared towards wellbeing, equality and technological advancement. All debt was forgiven, including mortgages. The UK’s land was turned into ‘The Commons’; land owned by the people as part of a growing wave of countries worldwide committed to putting an end to world poverty and sharing the planet’s wealth amongst all its inhabitants. Poverty was relieved through funds to cover our basic needs and a Universal Income raised by a form of rent on The Commons, called the ‘land value tax ‘. Work has dramatically reduced as new emerging sectors are now automated. Non-work time means more time at home and in the neighbourhood, reducing our carbon emissions. Lockdown cast a shadow on the state of housing design, with unprecedented numbers of people suffering mental health illnesses because of cramped spaces and lack of open space. With the new land system, and the desperate need for homes made for people to thrive, a new wave of co-operatives and mutual aid organisations flourished. The Neighbourhood emerges as a crucible of a happy and healthy community. This blog is divided into two parts; Part 1 sets the context for land reform; and Part 2 imagines how housing and the neighbourhood improve within this new context.

PART 1 - Land:

In his seminal work Garden Cities of To-morrow (1902), the British urban planner Ebenezer Howard envisioned a city in which the benefits of town and countryside would merge with the best of both worlds, visualised in his ‘Three magnets diagram’; town, country and town-country. Urban qualities of opportunity, high wages, and amusement would be tempered with the countryside’s beauty, fresh air and low rents. His vision balanced between individual and community needs.

For the past few decades, since the rise of advanced capitalism, the individual’s needs, and particularly the top 1%, have been at the expense of community needs. What if in a post-Corona world we could redress this balance? What if we put community and communal needs above the individual? What would this city look like?

One fundamental cog in the wheel of advanced capitalism is land. The inflation of land value is the inflation of house values. Land inflation is governed by a number of factors that lead to land speculation (i.e. buying land on the basis of its potential selling price rather than its actual value).

(i) Land banking by landowners creates artificial scarcity. When there is less land and high demand for land to build housing, the value of land goes up. 

(ii) Where there is cheap land, such as publicly-owned inner-city social housing estates, land with government subsidies, or in the green belt, then by virtue of ‘planning’ buildings or constructing buildings on that land, its value increases significantly with the uplift in value of these improvements to the land. 

(iii) The value of land goes up if the location of the land becomes beneficial, for example many inner-city areas that were once working class have become trendy middle-class areas in close proximity to city-centre service-sector jobs, making the land more valuable. 

(iv) A change in land use to a use with higher return, for example the change of use of warehouses into trendy apartments makes that land value higher because the yield is higher from residential development. 

(v) Improvements to the quality of buildings raises land value either through refurbishment, sub-division into more units, or demolition, for example from social to luxury housing.

With the pandemic,  housing vulnerability has emerged as a major source of grief; incomes eradicated, or reduced by employment uncertainty, is leading to defaults on mortgages and rentals with risk of losing a roof above our heads. During the lockdown, estimates of half a million of the most vulnerable households face homelessness because of defaults on their rent. Two million people signed on for Universal Credit, a quarter of the UK’s employed workforce registered for the government’s job retention scheme, and one million under 25s face unemployment. Six million jobs may be taken out of the UK economy. The visibility of homelessness has become acute for those who couldn’t self-isolate, with cities such as London renting out hotel rooms to support the homeless during lockdown. Affordability of rent and house values had already been at crisis point pre-Corona.

Exacerbated by high land values, access to affordable housing still remains out of reach of the many. Just like Howard in the early twentieth century sought to address the slums of the Victorian city by influencing enlightened self-interest philanthropists to build models villages like the Cadbury Brothers in Bournville, Titus Salt in Saltaire, and Joseph Rowntree in New Earswick, the twenty-first century seeks to address housing inequality.

Under advanced capitalism the process of inflating land value has become aggressive. In a persistent buying up of cheaper and publicly-subsidised land, developers have taken land out of circulation destined for more affordable and social housing. Even with planning obligations to build more affordable homes, developers have consistently found loopholes under the guise of ‘unviable development’ – a consequence of high land values! The key to socially reforming housing inequality lies in the socialising of land, so that those who wish to use land must pay a rental fee, in the same way that we pay rent to live in apartments we do not own.

Enter Henry George, the American political economist, and author of the prolific book Progress and Poverty (1879).

George’s theory tackles land inflation affected by land speculation head on. He has bold concepts I attempt to understand:

(i)             How does George’s high land value tax (LVT) stop developers from land banking?

(ii)            How does NOT taxing construction incentivise building?

(iii)          How do the two points above lower house prices?

The first key premise George sets out is defining land as a common wealth to be shared by the many, not the few.

This is an ancient idea. A historic glance at the First Nations’ attitude towards the land they inhabited, they considered themselves as stewards. Their connection is one of reverence, not greed nor extraction. They have free access to the use of the land, but they do not own it. They could live on it, farm it, sell things on it, manufacture things on it, extract things from it etc. but it is ultimately a shared resource in which every person has an equal right to. George claims that as no man made the land, so no man can claim a right of ownership in the land. Taking that as a basic – and ancient - principle for a way to relate to land, then the idea of land shared by all citizens of the UK – or even extending further to a global concept of a shared planet – would create The Commons – land and resources belonging to every person. The implication is that any income generated from The Commons would be shared by all, alleviating poverty to many who have no access to land ownership.

Building on the idea of The Commons (Wealth), George’s second key premise goes further to re-define ‘ownership of land’ as meaning entitlement to the ‘use’ of the land, and how those who use it should pay rent – or what he calls – a Land Value Tax (LVT) for its use.

Therefore, that which a developer cannot use, they must pay for or ‘sell’ to someone else. Developers would have ownership rights over what they produce, build, improve and exchange on the land, but not the land itself. The ‘use’ of the land is what would have economic value. As George states, the land value would be taxed, therefore any sale of ownership would in effect be selling the tax liability, not the ownership. George states: ‘In truth the right to the use of land is not a joint or common right, but an equal right; the joint or common right is to rent, in the economic sense of the term. Therefore, it is not necessary for the state to take the land, it is only necessary for it to take rent. This taking by the commonalty of what is common right, would of itself secure equality in what is of equal right – for since the holding of land could be profitable only to the user, there would be no inducement for anyone to hold land that he would inadequately use, and monopolization being ended no one who wanted to use land would have any difficulty finding it.’ Part III, Ch XI

In this scenario, developers wanting to use the land to build on, would pay an annual LVT to The Commons. According to George, LVT is the only tax to be paid. Developers will not be taxed on the buildings they erect, therefore, they will mainly profit from selling the leasehold or collecting rent from their buildings. The leasehold and rent price of these properties will be significantly lower, as the price of the land will not be included in the property price, as the land already belongs to The Commons.

How does George’s theory impact my vision for Communal Cities in a 2025 post-Corona world?

The Commons – a new concept for land

Building on the ideas in my first blog ‘The Death and Life of the Great English High Street’ (see reference below), online migration of our everyday life will lead to large areas of our cities lying vacant and in need of repurposing from offices, universities, large supermarkets, schools, and even large retailers. All this land will be placed in The Commons along with all existing public land, and a good proportion converted into much needed affordable housing. The land value tax will apply to existing land owners who are buying or selling their land, ensuring land speculation does not continue to happen.

Universal Income – reducing inequality

The land value tax on use of the land will raise sufficient funds for The Commons. According to George, all other taxes will be replaced by this single tax including taxes on personal income, sales, business profits, inheritance, buildings and any improvements to land. The revenues from the rent (or LVT) would fund basic government welfare programmes such as healthcare, education, infrastructure and social housing. Any surplus would be returned to citizens as a direct cash payment, or universal income, a de facto guaranteed national – or even global – income, similar to the Alaska Permanent Fund. Oil was discovered in Alaska and the State taxed the land for its natural resources, cash dividends were then distributed to the State residents. In a globalised move to adopt this new economy, the shared wealth of the planet’s land and resources will be shared amongst human beings, narrowing the margins of inequality and eradicating poverty.

Truly Affordable Homes

All house building will only take into account the price of building and not the value of the land as well. This will significantly bring the house prices down. Developers will make their profits on selling the ‘use of the buildings’, either through leasehold or rental.

Communal Housing Models

With land taken out of the development equation, a sharp increase in more communal forms of development will arise. Co-operatives and co-housing will become very popular where a group of residents become part of an association of members of a legal entity which is the co-op itself. The legal entity can apply for financing to build the properties on The Commons. The members pay a below-market rent, which goes towards upkeep, and properties are managed by members on an unpaid basis. Members of the housing co-ops will not own equity in their homes; the properties will be owned by the legal entity that is the co-operative itself, rather than individual members. The co-operative is leasing the land from The Commons and pays ground rent. Although co-ops offer secure housing to their members for as long as they choose to live there, when members leave, the property reverts to the co-operative, which will then allocate the property to someone on its waiting list. This model of housing offers access to affordable rent while making benefit of the land available as a shared common wealth for the community’s welfare.

In closing, both Henry George and Ebenezer Howard had clear strategies on reforming land in such a way that would eradicate speculation. Howard, inspired by Henry George, sought to create a Garden City Company that would manage the allocated land and share its resources with its tenants or leaseholders. However, garden cities fell victim to their own success as they became brands of high urban quality, impacting rising land value and use value because they remained unique and exceptional in comparison to other cities across the country. In order for this vision to succeed, it would have to be the norm, not the exception.

George’s ideas are compelling in more ways than one for the Communal Cities of To-Morrow:

·       The concept of land belonging to The Commons will eliminate speculation, thus reducing house prices, and will use land value tax to achieve this.

·       The single tax model has the potential to eliminate poverty and inequality by raising the revenue from the shared land’s resources amongst inhabitants of a place, country and the world.

·       With more land available as The Commons, there is greater scope for communal forms of housing to thrive.

As George eloquently said: 

‘We have made, and are still making, enormous advances on material lines. It is necessary that we commensurately advance on moral lines. Civilisation, as it progresses, requires a higher conscience, a keener sense of justice, a warmer brotherhood, a wider, loftier, truer public spirit.’ Ch XXI

This blog was inspired by the following references:

WATG London is fully credited for the image at the top of this article: ‘A green community square vision’.

I would like to deeply thank Gareth Whelan for his inspiring explanation of his interpretation of Henry George’s ideas which has been central to the writing of this blog. You can learn more about Gareth’s ideas at www.locationeconomics.net

My first blog was on ‘The Death and Life of the Great English High Street’ about the repurposing of a great deal of the town and city centre uses, and how a new vision for existing in a post-Corona city can bring people together in creative ways: https://connectingthroughcorona.blogspot.com/2020/05/the-death-and-life-of-great-english.html

Henry George’s Seminal work on ‘Progress and Poverty’ (1879) can be found here: http://www.henrygeorge.org/pdfs/PandP_Drake.pdf

Another reading of Henry George’s ideas can be found in a book by Gavin Kerr ‘The property-owning Democracy: Freedom and Capitalism in the Twentieth First Century’ (2017), Routledge.

Ebenezer Howard wrote his important book on Garden Cities of To-Morrow in 1902 which paved the way for new model of urban planning that was adopted across the country by philanthropists seeking to build high standard housing for the workers in their factories. Howard’s ideas for the garden city are criticised for spawning suburbia. More information here:  http://urbanplanning.library.cornell.edu/DOCS/howard.htm

The book by Rutger Bregman 'Utopia for Realists and how we can get there' is an inspiring read particularly with the ideas of working less and having a universal income.

During the pandemic, the UK government’s job protection scheme was put in place. This article argues that this scheme has not protected the most vulnerable who are low-paid precarious workers. The authors put forward the idea of a Minimum Income Guarantee.  https://www.opendemocracy.net/en/oureconomy/why-we-need-income-guarantee-all/

In this article Universal Basic Income is challenged and a new model of Universal Basic services is introduced based on the provision of basic services protecting individuals’ basic needs such as health, education and housing, transport and food. https://neweconomics.org/2018/02/better-fairer-ways-spreading-prosperity-ubi

The Co-operative model is introduced in this article not only in housing but also in business based on sharing risk, power and reward. https://neweconomics.org/2018/07/co-operatives-unleased

The concept of the Community Land Trust is a smaller scale version of the  idea of The Commons as discussed in this blog where land is taken out of speculation and leased long term for the benefit of community. https://centerforneweconomics.org/apply/community-land-trust-program/

 
  

This is movement to claim back the land of the UK to become the sovereign ownership of the people of the UK. https://britonia.land/

This article estimates the impact of job losses as a result of lockdown and in which sectors, namely hospitality and education. https://www.theguardian.com/world/2020/apr/19/nearly-seven-million-jobs-at-risk-if-lockdown-lasts-for-months


There is growing interest in the idea of giving every member of society a basic income, and Alaska has been doing something like that for almost 40 years.

https://www.bbc.co.uk/programmes/m000gl9m

This article in Inside Housing shows that the worst affected housing areas during Corona pandemic are those who cannot afford good quality homes, live in overcrowded properties and are mostly from ethnic minorities. https://www.insidehousing.co.uk/insight/insight/the-housing-pandemic-four-graphs-showing-the-link-between-covid-19-deaths-and-the-housing-crisis-66562

An article reporting on the charity Shelter and their predication of a ‘tsunami of evictions’ as lockdown eases and employment rates dramatically increase. https://www.independent.co.uk/news/uk/home-news/coronavirus-uk-private-renters-evictions-lockdown-shelter-housing-allowance-a9503151.html

This article draws attention to the importance of debt relief during the pandemic otherwise many households risk destitution: https://www.theguardian.com/commentisfree/2020/mar/18/debt-relief-coronavirus-crash

This article shows that those at the impact of job losses are those considered the most vulnerable in society. An estimated half a million could be homeless after the pandemic lockdown ceases. https://www.politicshome.com/news/article/half-a-million-households-face-homelessness-if-housing-crisis-not-prioritised-councils-warn

This article showcases the problems of the current housing crisis and paves the road for a post-pandemic correction. https://theconversation.com/coronavirus-has-shone-a-light-on-uks-housing-crisis-heres-how-it-can-be-fixed-133387

An interesting article on the impact of Covid-19 on homelessness and private renters. The solutions suggested includes emphasis on space standards and the need for a range of spaces in the home: https://www.smf.co.uk/commentary_podcasts/homes-health-and-covid-19-how-poor-housing-adds-to-the-hardship-of-the-coronavirus-crisis/

Ubuntu Contributionism is a movement planning for a new social structure that would liberate humanity from the tyranny of money and work, and increase our abundance and productivity. They key to unlocking this new social structure is called One Small Town: https://www.ubuntucontributionism.org/one-small-town

This article examines the way the state and society will handle the economic impact of Covid-19 in directing resources questioning global supply chains, wages and productivity. The author explores four possible scenarios; state capitalism; barbarism; state socialism; and mutual aid. I am particularly inspired by the latter two where the concept of Universal Basic Services provided by the State leads to greater equality and less precarious work, or community-led mobilisation.  https://theconversation-com.cdn.ampproject.org/c/s/theconversation.com/amp/what-will-the-world-be-like-after-coronavirus-four-possible-futures-134085

This article highlights how working a reduced working week has many benefits, in particular it reduces air pollution and our carbon footprint; while at the same time the increase in non-work time supports our wellbeing; mental and physical health: https://autonomy.work/portfolio/the-shorter-working-week-a-report-from-autonomy-in-collaboration-with-members-of-the-4-day-week-campaign/

This article highlights that the pandemic has forced the economy into hibernation and the role of the state to undertake radical measures to safeguard the security of households and businesses through grants, debt amnesty, food security, and payment of utilities:  https://tribunemag.co.uk/2020/03/the-anti-wartime-economy

This report predicts four futures for work in which technology and a more co-operative and empathetic scenario would mean greater self-sufficiency and accountability: https://www.thersa.org/discover/publications-and-articles/reports/the-four-futures-of-work-coping-with-uncertainty-in-an-age-of-radical-technologies

The New Economics Foundation is a UK Think Tank lobbying and campaigning for greater equality and wealth distribution. One of their primary thrusts is in developing a co-operative model in businesses in which employees are shareholders of the company’s equity: https://neweconomics.org/2018/07/co-operatives-unleased

In this blog, the New Economics Foundation argues for the importance of debt forgiveness in order to allow businesses to continue trading. https://neweconomics.org/2020/04/a-debt-holiday-could-make-all-the-difference-for-small-business

Bournville is a factory in a garden suburb, developed by the Cadbury brothers, industrial philanthropists acting in enlightened self-interest. They adopted the principles of the Garden City set forth by Ebenezer Howard which brought the countryside and town together to improve the health and well-being of workers and society addressing the 19^th Century Victorian slums. https://www.cadbury.co.uk/about-bournville

Biography

Noha is an architect/urban designer, academic and social entrepreneur with a passion for connecting people across different cultures through the design of cities and international travel. She runs two social enterprises; MELA and Life in a Travel Bag. She has published a book called ‘Bridging Cultures: a guide to social innovation in the cosmopolitan city’ (2015) and edited/authored two books; ‘Connections: 12 approaches to relationship-based placemaking’ (2017) and ‘Human Crossings: 9 Stories about refugees’ (2019) – her first foray into creative writing. You can email Noha on nassernoha@hotmail.com.

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