Land Ownership Makes No Sense

“There’s no such thing as a good landlord” is a rallying cry of angry renters. In the future, it might be conventional morality that it’s simply wrong to own land.

In our times, owning land seems as natural as owning cars or houses. And this makes sense: The general presumption is that you can privately own anything, with rare exceptions for items such as dangerous weapons or archaeological artifacts. The idea of controlling territory, specifically, has a long tenure. Animals, warlords, and governments all do it, and the modern conception of “fee simple”—that is, unrestricted, perpetual, and private—land ownership has existed in English common law since the 13th century.

Yet by 1797, US founding father Thomas Paine was arguing that “the earth, in its natural uncultivated state” would always be “the common property of the human race," and so landowners owed non-landowners compensation “for the loss of his or her natural inheritance.” 

A century later, economist Henry George saw that poverty was rising despite increasing wealth and blamed this on our system of owning land. He proposed that land should be taxed at up to 100 percent of its “unimproved” value—we’ll get to that in a moment—allowing other forms of taxes (certainly including property taxes, but also potentially income taxes) to be reduced or abolished. George became a sensation. His book Progress and Poverty sold 2 million copies, and he got 31 percent of the vote in the 1886 New York mayoral race (finishing second, narrowly ahead of a 31-year-old Teddy Roosevelt).

George was a reformer, not a radical. Abolishing land ownership doesn’t require either communism on one end or hunter-gathering on the other. That’s because land can be separated from the things we do on top of it, whether that’s growing crops or building tower blocks. Colloquially, the term “landowner” often combines actual land-owning with several additional functions: putting up buildings, providing maintenance, and creating flexibility to live somewhere short-term. These additional services are valuable, but they’re an ever smaller share of the cost of housing. In New York City, 46 percent of a typical home’s value is just the cost of the land it’s built on. In San Francisco its 52 percent; in Los Angeles, 61 percent. 

The key Georgist insight is that you can tax the “unimproved” value of land separately from everything else. Right now, if you improve some land (e.g., by building a house on it), you’ll pay extra taxes because of the increased value of your property. Under Georgism, you would pay the same tax for your home as for an equivalent vacant lot in the same location, because both your building and the vacant lot use the same amount of finite land.

Today, Georgism as a political movement has stagnated like a vacant lot. But one day, we believe, people will see Georgist taxation as not only economically efficient but morally righteous. 

The right to live is generally considered the first of the natural rights. But living requires physical space—a volume of at least several dozen liters for your body to occupy. It’s pointless to declare that someone has a right to something if they can’t acquire its basic prerequisites. For example, as a society we think everyone has a right to a fair trial; since you can’t meaningfully have a fair trial without a lawyer, if someone can’t afford a lawyer, we provide one.  Similarly, on planet Earth at least, occupying space necessarily implies occupying land. Upper-floor apartments or underground bunkers still need the rights to the land below or above them. Thus, the right to life is actually derivative of the more primal right to physical space—and the right to space is derivative of the right to land.