Markets in Urban Lands

0:00Well, the paper title is Markets in Umbar lands and the target is answer three questions. What is the best use for Umbar lands? What factor prevent us from achieve this? What are the right policies to accomplish this goal? This is the three main questions. I begin this presentation with a quote of Jorge Luis Borges, one of the best writers of all times. The quote is, I believe in individual, I don't believe in the state. Yo creo en el individuo, des creo del estado. Ok, this is the paper structure. The first topic is a presentation about the reasons for the deterioration in the Latin America downtown cities.

0:48This is a big problem now. Now, the second topic is one explication signs the Austrian perspective for the subject of the urban land. For that proposal, I'm going to use three of the giants of the school, Rothbard, Mises and Hayek. Finally, I'm going to try to construct an urban land market structure and present some conclusions. This is an example of the working of the market for urban land. Some research on the subject suggest that the massive migration from the countryside to the cities is the main cause of the problem of the downtown.

1:37The countryside-to-city migration don't answer the question. Also, the arrival of new population may cause some trauma of a result of its rapid development. This factor alone don't explain the change in the spatial configuration in Latin American cities, near the deterioration of this emblematic space. Migration to the city is a natural phenomenon in the development of the capitalings, And this should not be reason for the deterioration equality of life of the urban dollars. Newcomers seem to make a living in the blood market, occupying the central area because the existence of the diversity of consumers. The result was, downtown areas were converted in a blood market heathens, this is really.

2:29In response, many Latin American government cities have taken action to recover this area. But, also, these policies may be well-intentioned, the results are a disaster. The state intervention comes in two ways. The first way is a high spending on UNBAR infrastructure, and the second way is the tagging of the rule of government land use. These policies are based on the mistake assumption that only via government intervention through large investment infrastructure and strict regulation on land use, it will be possible to guide the market toward a more efficient land distribution.

3:19The investment in physical infrastructure is a distortion to the prime system. On the other hand, tagging of the rule of government land emphasized in the prohibition of using historical residence for business proposal. In other words, the property is now less likely with assets, and therefore its market value decreases. This is the two mechanisms, and the two mechanisms break the spontaneous order. This is a quote of Hayek, the spontaneous order of the city that is to the, the spontaneous order of the society is to the spontaneous order of the city. Additionally, the situation is worsened if one takes in account the discretionary action of the government, its power to frequently The Shinder Rule for the Land Use Ask Mechanism to Enfold His Recovery Plan We go now to the second part of the paper. The Urban Land Market Sides the Austrian Perspective The revision of the three authors that I say. The third author is Rothbard.

4:37For the Rothbard revision I begin with a question. Is the land a different good? This is an important question. We can start as the debate between Henry George and Murray Rothbard. The Georgians proposed the single-tal program. The single-tal program begins with the assumption that the land isn't a product of human action, Being a good that isn't created by the man, property couldn't belong to an individual, The Georgians say that it is possible to separate the land gross value from the mass improvement.

5:51Thus only the government should own and control the land. They propose a tax equal to 100% of the revenue produced by the land. This is the Georgian proposal. But, contradicting the single-task premise, Murray Rothbard understood that one of the single-task key assumptions was that the land's possessor doesn't contribute to the economy's profit. This is the point of Rothbard. Land city owner manages unlimited goods. Therefore, his function is to designate to the grounds to alternatives more profitable, and it means a big contribution to the society.

6:37With the pressing until now, we could conclude that the ground equals that all goods will have an economic interest. The land is limited. For that reason, they have an economic problem because there are scarcity. The next is, well, the private property is necessary,

7:11but other way of intermination is the task. We could think that the single-tar proposal is radical, and that is very difficult, that one day it will be a reality. Nevertheless, many economies, especially these inclinate to the state intervention, believe can be salvaged from the Georgian idea. That this fiscal policy could elaborate, it could help to a more efficient land use. This idea is less extreme and basically evolves to a differential land tax, logical inferior to the 100% of the O.R.N. If the task must have one impact in the agent's decision, they admit that the price system should be disturbed.

8:01Ludwig von Mises clearly warned that without price information, the agent can't make the right decision. Due to the information that they have isn't the correct. I want to read one quote of Mises. The ultimate source of the determination of the price is the value-usement of the consumers. Human Action, individual transmits information via prices, so when the mechanism has been damaged it infers the economy's nerf system. The last author is Hayek. Well, until this point, we have shown that neither the tax and the confiscation is good for the urban land structure.

8:58Now, we're going to present one last argument for the state intervention that is the regulation. Nevertheless, one mainstream economist could write that even if he agrees with what was previously said, the city needs any type of ordering, it is impossible to leave all to the market. The argument is that there are superior social profits which is provided by one specific land distribution. It is sure that one residential zone will be incovenient with the installation of one This concept is closely related with that Hayek denominated the society spontaneous order, what can be interpreted as the city spontaneous order.

9:58The city would order them spontaneously, and they used that they are compatible with in The Planned Authority, in order to be able to make his job, must be empowered, because otherwise it could enforce citizens to follow his plan. That is a private property confiscation. Because private property violation would be justified by social profile for a profit to all society. Nevertheless, sub-profit musing considered for all society because it doesn't reflect all society, but the particular planning authority view is only the view of the authority planning, not all society. The planning authority not only must have great powers to carry his The rule of law, the concept of the Hayek.

11:19Finally, I present a market structure, given the other topic. Ok, this market is integrated initially by the owner, the urbanizing entrepreneur and the consumer. The entrepreneur is ever looking the possibilities to the best land use, and he tries to develop the construction project with society at present most. The question that holds the mind in the entrepreneur of this individual are, what is the project that generates the highest rent, what is the market awarding, and what is the right time to begin the project?

12:04Up to here, the structure is very easy. Never the less, it has not only become more complex, but more disturbed when the state appears. The state's intermination can increase or decrease the lot's value, depending on the urban land distribution share. This reality is more visible with investment, but occurs with regulation too. If the government gives to one property a land use that produces a higher rent than the previous, immediately the lot price rises. In the same way, if the planning authority limits the use of a land to a less rentable than the one of the market would grant to it, the lot price falls.

12:49The government creates rents that aren't products of the human action, it raises the price of the land and falls the price of the land, depending on the case. In the same way, the other state interventions, the urban land regulation, generate the same expectation. Therefore, the agent would be motivated to influence the state decision in a way that they more will benefit. And finally, this situation. When the state takes part, the agent's decision changes immediately, and his target is not only given the best-used land, but he tries to capture the rent given to the state too.

13:38Therefore, the spatial configuration will be different to the efficient. This is the conclusion, the political implication I resume in two, helping to define the property rights that can be helped in the case of the downtown in Latin America and allowing the Market 12, and finally, Uniform Transhancement Tool, for not disturb the price system. Thank you for your attention.