Land Use and Society in America
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by Deke Keasbey


Introduction

Land tenure A historical overview

Land in America

Considerations in growth management

Demand for living space

Life cycles in residential communities

Urban land

Santa Monica A case study in growth and rent control

In conclusion

For further reading

 

 

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Land Use and Society in America
by Deke Keasbey, Commercial Real Estate Specialist, Tierra Properties

This study received its inspiration from my 17 years of experience as a broker specializing in commercial real estate. For some time I have been interested in looking into issues of land use and society, in addition to the business aspects of real estate with which I have more experience. The outcome is this survey, a rather eclectic selection that touches on highlights in land use issues. I have placed strong emphasis on land use in contemporary urban America, in particular southern California, where I live and practice real estate.

Introduction

How significant is land in American society? "Investment Vision" (September, 1990) reports there is $20 trillion invested in real estate, as compared to $3.6 trillion in shares of all publicly traded companies. Down through history, as social organization grew from tribal groups to nations, land has been highly valued, as can be seen by the number of wars waged to obtain or defend it.

Private ownership of land does not exist in indigenous groups that live by hunting, fishing, or herding. Before white settlement in America, each Indian tribe occupied and controlled its territory, which was its land. The whole tribe owned the land and each tribesman had equal access to it and equal rights to use it. In early Europe, simple agricultural peoples living in village communities received individual allotments of land for cultivation. In Latin America and the Middle East, the concentration of landholding in the hands of a small elite has frequently led to political and social unrest. In modern times, Western countries regard widely distributed private ownership of land as socially and economically advantageous.

In Western civilizations, private ownership of property is necessarily supported by related rights to preclude others from enjoyment. Benefits and protections are assured to owners by custom and law. The ownership and disposition of land is a major component of most wealth and at the basis of social structure. Ownership rights to property have been institutionalized and controlled through law to protect society. As Western market economies developed, middle-class people were able to replace the landed aristocracy by taking advantage of their economic freedom to acquire land and business ownership.

"Industrialism has put its formidable drive into private property, enhancing the man of property's social power while diminishing his social responsibility," noted historian Arnold Toynbee. He argues that as the state controls property and industries, for example, through taxation and regulation, it curbs excessive power over other people's lives. This process has the incidental social advantage of transforming the state into an agency for social welfare.

There are special characteristics of land and its uses, which, according to historian D.W. Harvey, have far-reaching effects on Western society:

  • Unlike other commodities, land and its improvements cannot be moved around at will. Their location is fixed and this gives monopoly privileges to the person who controls the use of that location;
  • Land and its improvements are things that all individuals need. Some of these are indispensable, and this places strong constraints on consumer choice;
  • Land and improvements change hands relatively infrequently;
  • Land is permanent and the life expectancy of improvements is usually considerable. Accordingly, land and improvements with the rights attached provide an opportunity to store wealth. Most land has a current and future use value, and a current and future exchange value;
  • While exchange occurs at a certain point in time, uses often stretch over a considerable period of time. Rights of use over a relatively long period are purchased at one point in time for large outlays of capital. As a result, financial institutions, including lenders, play a crucial role in the land and property market.
  • Land and improvements have many different uses that may be suitable to the user, and these various uses constitute use value.

Use value reflects in the marketplace as rent. Rent fulfills a function of allocation, serving to sort land uses into locations by way of competitive bidding.


. . . next section: Land tenure - A historical overview

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