You apologised for the length of the post as I must for the length of response.
I have always enjoyed your musings and keen financial insight but have never enjoyed a piece so much as that today regarding LVT. Without wanting to be in the least way disparaging, what a hoot, hopefully born of a metropolitan upbringing given your references to the Crown (Government), Grosvenor etc.
In light of your clear understanding of economics, you must be aware of the distinction between value and utility. Therein lies the biggest problem in the LVT (or Water Location Value Tax) hypothesis. In terms of utility, I would suggest that much of the land owned by the government may well have a negative value. Having had some experience in both the provision of housing land and agriculture, I can confidently say the land owned by both central and local governments is a significant impediment to economic growth and to have even the most fleeting thought of LVT being a tax raising exercise in relation to the largest landowners is disingenuous. Turkeys and Christmas springs to mind.
A solution that suggests a local authority and the land registry parcelling up pieces of land/foreshore or anything is my worst nightmare. These people are “civil servants” although I question both civil and servant; both seems remarkably absent with regard to civil being polite or obliging and servants of whom? They lead politicians by the nose. Their ability to realise/conceive a possible land value?? They have no commercial experience whatsoever.
There is no doubt central London does command huge land values but in terms of utility, those of us outwith the square mile doubt if the algorithms they run could not be as equally well run from Hull; they seem to work in Edinburgh.
And does agricultural land have more utility/value than the boy scribblers in Canary Wharf. Considering the current increases in food prices, social stability (let them eat cake?) it certainly does raise a question?
Having some experience of the planning system, the Water Location Value Tax, is, I’m afraid, dead in the water (no pun intended). Water front properties command a high premium , even in the upper reaches of the Thames, and are owned by well educated, high value individuals who have the means to resist the likes of you or I bunking up in front of their bifold patio/orangery doors where they could once have enjoyed mallard ducks sticking their backsides up in the air whilst feeding. It would be nimby writ large with lots of cash to prove it wasn’t. (Interesting fact: planning law does not enshrine a right to a (landscape) view.)
The second, and sadly more prosaic issue in that otherwise idyll you propose, is how to provide safe and sanitary water (and waste water), gas (bad) and electricity to these floating and affordable floating paradises?
Planning laws are most certainly a problem, and have become even more expensive with the inclusion of “consultation” (a complete myth, if a planning department wants housing, any consultation can be dismissed for any number of legal/policy reasons). The cost is a significant barrier to entry leaving the field wide open to the major developers. I spent quite a lot of money (I didn’t have) to achieve a planning consent for 600 houses in 2006 – 2012; it only recently sold with a vastly reduced number of houses because there wasn’t electricity, water or waste water infrastructure, but the planners thought it a whizzo idea.
The concept of building houses cheaply is without doubt uppermost in all developers mind, if they could , they would, but you forget things called building regulations, EPCs, entrained carbon and the carbon emissions of each dwelling.
The green/political agenda is also key to any proposed solution to the housing/affordability/availability issue. Gas still is the most readily available and economic form of heating; this has been banned by the Scottish Government in 2025. The alternative? Yet to be supplied; Boris’ (noisy) heat pumps but with no grid to supply the 3x times electricity necessary. The above mentioned site now requires an £8m electricity grid reinforcement.
I’m fed up with this rant as, no doubt, you are. Head and brick wall.
Again, my apologies, but after a long time of trying to innovate, on a number of practical levels, the sheer weight of bureaucracy is inclined to grind you down.
Is the River Thames unusual in offering so much potential living space in a city? Other cities with rivers or canals which come to mind, e.g. Reading, have corralled their waterways to fit between modern design and what slim stretches remain already have narrowboats dotted, one deep, along their banks.
Does the leasee’s construction have to be floating? I assume so, but it’s worth making it clear. I’m thinking of the stilt houses seen in Asia which sit above the tide’s reach.
If the construction sits in the water then I’d assume heating is a problem, even with lots of insulation. The winter narrowboats I see have little wood-stove chimneys chucking out PM 2.5 and other lovelies just below the head height of the towpath walker. Increasing their number might draw a much-needed new Clean Air Act closer.
The Dutch are famed for their waterways. Given their smoking ways, have they dreamt up high-density housing on the water?
The great unwashed understood Brexit to be about sovereignty: the ability to boot out those who are making a mess of controlling the Civil Service blob. I’d have thought they could grasp the preeminent stealth-tax of their lives, inflation, and how it, through the Cantillon Effect, favours the asset holders and those that can borrow. Just as a start-up up-start party moved the Overton window and put pressure on mainstream politics to give ground on Brexit, could a Farage, Tice, or Fox explain the wtf1971 Austrian approach so the have-nots put voting-booth pressure for a sounder money, or just start to self-sovereign?
Those, like me, unfamiliar with 'Schumacherian, “small is beautiful”', may find this Wikipedia page on E. F. Schumacher's 'Small Is Beautiful: A Study of Economics As If People Mattered' of interest. Cheers, Ralph. https://en.wikipedia.org/wiki/Small_Is_Beautiful
I personally found this article really interesting as I think tax is broken, and money is broken. Sorry to make this a fiat currency comment, but for many years (more years than I care to mention) I have felt that a currency based on energy makes sense. A volt, and a calorie are a universal amount, the things we make require volts, the things we eat are a store of calories...large things like cars and houses require large amounts of energy and would therefore 'cost' more, and foods with high calorie counts would 'cost' more. Surely energy is the most universal currency because no matter where you are on the planet a volt is a volt, and a calorie is a calorie. Conversion rate of 3.8 kilocalories to the Electronvolt. I think we may have solved Tax, and Fiat currencies all in one Sunday.
Thanks for another great piece to get us all thinking and remembering. Hazlitt and Hayek could be added with Freidman for good reference. 2 great sayings come to mind straight away, The borrower is slave to the lender and, Inflation is ALWAYS caused by an increase in the supply of 'money'. IMHO what you are seeing in the UK as well as the rest of the world is the increase in the supply of the reserve currency of the world. America's worst and greatest export is the inflation. We export little worthless pieces of paper with pictures of dead presidents on them. America's Federal Reserve is neither Federal or reserve but is merely a privately owned, for profit, central bank. In the beginning the inflation was harder to be seen with the gold standard still in effect. War is one of the most profitable businesses. By financing both sides the world became deeply in debt after the 2 world wars. After 1971 when all pretense of value was removed from the reserve currency it grew like the cancer it is. By following the money the increase in world prices can be seen. Lending to developing countries puts them in bondage and less able to grow.
Sofa and Ralph made great comments. Surely the answer must lie somewhere.
Hi Dominic, I've just read Peter Thiel's 2009 ‘The Education of a Libertarian’, https://www.cato-unbound.org/2009/04/13/peter-thiel/education-libertarian/, where he mentions seasteading and it reminded me of this. Perhaps riversteading is a term to use? Google knows of it, there's even a sub-Reddit so I bunged up a link to this post: https://www.reddit.com/r/Riversteading/comments/vbz4ff/tax_water_not_work_living_on_the_river_thames_and/ Cheers, Ralph.
My dear Dominic,
You apologised for the length of the post as I must for the length of response.
I have always enjoyed your musings and keen financial insight but have never enjoyed a piece so much as that today regarding LVT. Without wanting to be in the least way disparaging, what a hoot, hopefully born of a metropolitan upbringing given your references to the Crown (Government), Grosvenor etc.
In light of your clear understanding of economics, you must be aware of the distinction between value and utility. Therein lies the biggest problem in the LVT (or Water Location Value Tax) hypothesis. In terms of utility, I would suggest that much of the land owned by the government may well have a negative value. Having had some experience in both the provision of housing land and agriculture, I can confidently say the land owned by both central and local governments is a significant impediment to economic growth and to have even the most fleeting thought of LVT being a tax raising exercise in relation to the largest landowners is disingenuous. Turkeys and Christmas springs to mind.
A solution that suggests a local authority and the land registry parcelling up pieces of land/foreshore or anything is my worst nightmare. These people are “civil servants” although I question both civil and servant; both seems remarkably absent with regard to civil being polite or obliging and servants of whom? They lead politicians by the nose. Their ability to realise/conceive a possible land value?? They have no commercial experience whatsoever.
There is no doubt central London does command huge land values but in terms of utility, those of us outwith the square mile doubt if the algorithms they run could not be as equally well run from Hull; they seem to work in Edinburgh.
And does agricultural land have more utility/value than the boy scribblers in Canary Wharf. Considering the current increases in food prices, social stability (let them eat cake?) it certainly does raise a question?
Having some experience of the planning system, the Water Location Value Tax, is, I’m afraid, dead in the water (no pun intended). Water front properties command a high premium , even in the upper reaches of the Thames, and are owned by well educated, high value individuals who have the means to resist the likes of you or I bunking up in front of their bifold patio/orangery doors where they could once have enjoyed mallard ducks sticking their backsides up in the air whilst feeding. It would be nimby writ large with lots of cash to prove it wasn’t. (Interesting fact: planning law does not enshrine a right to a (landscape) view.)
The second, and sadly more prosaic issue in that otherwise idyll you propose, is how to provide safe and sanitary water (and waste water), gas (bad) and electricity to these floating and affordable floating paradises?
Planning laws are most certainly a problem, and have become even more expensive with the inclusion of “consultation” (a complete myth, if a planning department wants housing, any consultation can be dismissed for any number of legal/policy reasons). The cost is a significant barrier to entry leaving the field wide open to the major developers. I spent quite a lot of money (I didn’t have) to achieve a planning consent for 600 houses in 2006 – 2012; it only recently sold with a vastly reduced number of houses because there wasn’t electricity, water or waste water infrastructure, but the planners thought it a whizzo idea.
The concept of building houses cheaply is without doubt uppermost in all developers mind, if they could , they would, but you forget things called building regulations, EPCs, entrained carbon and the carbon emissions of each dwelling.
The green/political agenda is also key to any proposed solution to the housing/affordability/availability issue. Gas still is the most readily available and economic form of heating; this has been banned by the Scottish Government in 2025. The alternative? Yet to be supplied; Boris’ (noisy) heat pumps but with no grid to supply the 3x times electricity necessary. The above mentioned site now requires an £8m electricity grid reinforcement.
I’m fed up with this rant as, no doubt, you are. Head and brick wall.
Again, my apologies, but after a long time of trying to innovate, on a number of practical levels, the sheer weight of bureaucracy is inclined to grind you down.
Enjoy you week and keep the good stuff coming
Colin
Hi Dominic,
My first thoughts, being a layman…
Is the River Thames unusual in offering so much potential living space in a city? Other cities with rivers or canals which come to mind, e.g. Reading, have corralled their waterways to fit between modern design and what slim stretches remain already have narrowboats dotted, one deep, along their banks.
Does the leasee’s construction have to be floating? I assume so, but it’s worth making it clear. I’m thinking of the stilt houses seen in Asia which sit above the tide’s reach.
If the construction sits in the water then I’d assume heating is a problem, even with lots of insulation. The winter narrowboats I see have little wood-stove chimneys chucking out PM 2.5 and other lovelies just below the head height of the towpath walker. Increasing their number might draw a much-needed new Clean Air Act closer.
The Dutch are famed for their waterways. Given their smoking ways, have they dreamt up high-density housing on the water?
The great unwashed understood Brexit to be about sovereignty: the ability to boot out those who are making a mess of controlling the Civil Service blob. I’d have thought they could grasp the preeminent stealth-tax of their lives, inflation, and how it, through the Cantillon Effect, favours the asset holders and those that can borrow. Just as a start-up up-start party moved the Overton window and put pressure on mainstream politics to give ground on Brexit, could a Farage, Tice, or Fox explain the wtf1971 Austrian approach so the have-nots put voting-booth pressure for a sounder money, or just start to self-sovereign?
Cheers, Ralph.
Those, like me, unfamiliar with 'Schumacherian, “small is beautiful”', may find this Wikipedia page on E. F. Schumacher's 'Small Is Beautiful: A Study of Economics As If People Mattered' of interest. Cheers, Ralph. https://en.wikipedia.org/wiki/Small_Is_Beautiful
I personally found this article really interesting as I think tax is broken, and money is broken. Sorry to make this a fiat currency comment, but for many years (more years than I care to mention) I have felt that a currency based on energy makes sense. A volt, and a calorie are a universal amount, the things we make require volts, the things we eat are a store of calories...large things like cars and houses require large amounts of energy and would therefore 'cost' more, and foods with high calorie counts would 'cost' more. Surely energy is the most universal currency because no matter where you are on the planet a volt is a volt, and a calorie is a calorie. Conversion rate of 3.8 kilocalories to the Electronvolt. I think we may have solved Tax, and Fiat currencies all in one Sunday.
Hi Dominic,
Thanks for another great piece to get us all thinking and remembering. Hazlitt and Hayek could be added with Freidman for good reference. 2 great sayings come to mind straight away, The borrower is slave to the lender and, Inflation is ALWAYS caused by an increase in the supply of 'money'. IMHO what you are seeing in the UK as well as the rest of the world is the increase in the supply of the reserve currency of the world. America's worst and greatest export is the inflation. We export little worthless pieces of paper with pictures of dead presidents on them. America's Federal Reserve is neither Federal or reserve but is merely a privately owned, for profit, central bank. In the beginning the inflation was harder to be seen with the gold standard still in effect. War is one of the most profitable businesses. By financing both sides the world became deeply in debt after the 2 world wars. After 1971 when all pretense of value was removed from the reserve currency it grew like the cancer it is. By following the money the increase in world prices can be seen. Lending to developing countries puts them in bondage and less able to grow.
Sofa and Ralph made great comments. Surely the answer must lie somewhere.
Cheers,