Perth Amboy evening news., 1919-08-13
LOW PRICES Of land
ANN HIGH PRICES Of BUILDING
MATERIAL EXPLAINED BY EXPERl
Land Values Are Created By
Footsteps Of the Passerby'
LOCATION PLAYS A BIG PART
Value of Land Must Decrease
to average Increased Cost
of Building
By Edward p. e. Troy
fCompiier OF the Public Owncrsihp
Handbook

By Edward p. E. Troy
Compiler of the PUBIC o"np
Handbook
WHY is the market value OF lano
naturally falling to half what II was
during dull times, while at the same
time industry generally is hummlng;
wages of labor are steadily rising ana
returns on capital are at a high water
mark?
! ponder whether or not he owns land
or expects to acquire any. Especially
should it interest legislators and tax
boards.
A good many lan spectators are
getting rid of city lots at unhearo OF
prices. They know that material n
labor must come out of land values,
the only thing that is left. They are
selling out as fast as they can before
bottom prices are reached.
1t has become an axiom that land
values are, created by the footsteps OF
the passerby." Many companies op-
| Grating chains of stores will decide on
a location for a new building only after
taking an accurate count of the aver
age number of persons daily passing
that spot.
The income on improved city lots can
be pretty accurately gagged in adj
vance, being based on the site, the
population and enterprise of the com
munity. -
Heretofore land, without n effort
of capital or labor being applied to it,
has absorbed into its value half the
| earning power of its location. Thls is
called the ~'unearned Increment Ii
the cost of a building exceeds what
may remain of this earning power, the
will be adequate.
When the cost of building increases.
the value of the and must be lowered
to strike this average.
This may be like a kindergarten re-
cital to a good many land owners n
builders but indications today are that
thousands of folk, confronted with
housing and building problems. are not
taking these facts into sufficient con-
sideration.
Heretofore land has been most ex-
acting in its toll from both capital and
labor. But the tables are turning.
Prices of land have fallen with a big
thud, while the rewards of enterprise
have begun to be fairly remnnerative.
Unfortunately many uniformed
Legislators have adopted or are about
to adopt tax avs tending to hamper
industry n designed to initiate land
values.
Too often an e~nterprising manufac-
turer, erecting a plant in the commun-
ity of his choice. awakens to find that
the tax laws have put such a heavy
fine upon his industry-his buildings,
machinery and goods-that profits
vanish.
Examination of the assessment roll
would show that his investment of, say
81. 900, 900, equals the value of about
10, 900 lots in the neighborhood. His
locating there. having doubled the as
sessment roll, reduces the taxes paid
by the and speculator to half the for
mer figure. The location of the fac
tory and the employment of many
hands, at the same time increases the
value of the speculator's land. Thus
the enterprising manufacturer is pun
ished for his industry by higher taxes,
while the land Spectator reaps a rich
reward because OF the manufacturer's
industry.
The manufacturer ~endeavors to pass
this tax burden on to his employees, but
labor has found the high price OF land
a burden that reduces the value of its
wage. Strikes and lock-outs result.
The manufacturer also tries to pass a
part of his tax burden on to the con-
sumner of his goods; but a competitor
VINO uses cheaper land, and has a lower
tax fine. can undersel him. Thus hesis-
ground out of existence between the
high land values his enterprise creates
and the taxes imposed on his factory,
} formerly paid by the land Spectator.
In the present acute need of increas-
ed revenue by the government, taxes
upon all enterprises and licenses and
charges of every kind destructive of
industry are being suggested. If these
burdens are passed on to the ultimate
consumer. the present wage of labor
Will prove a mockery and disturbances
be brought about in every community.
As land value is the product of the
enterprise of the capital and labor of
; a community. it should justly bear this
{ burden.
Tax boards should increase the as
sessed value of land so as to keep the
taxes at h existing rates, making no
Increased assessment upon household
ers or business enterprises. The in
crease thus will fall upon unimproved
land, which n be passed on but
! stays put b is a singular advantage
: of a land tax. and is the reason why
: 1T always reduces the market price of
, land. Land values being thus low
cred, win encourage industry and
make home owning and building more
.eaSv