Upon this point, Mr. Mathews of Birmingham said: - "It has been stated that landlords intentionally withhold their land from the market when it is ripe for building. This may sometimes be done in a locality which is rapidly rising in value, with the object of securing a higher ultimate ground rent, and in this case it is probably for the ultimate benefit of the public, for the higher the ground rent the greater will be the value of the buildings erected, and, therefore, the greater will be the rateable value and the rate thereon. Speaking generally, however, the tendency is in the opposite direction. Landowners are only too anxious to increase their income by the creation of ground rents, and sometimes compete with one another with that object. Thus land is often put upon the market before it is really ripe for building. A building or buildings may be then erected not generally suited to the situation, and the value of the remaining land thereby depreciated."......."I am inclined to think that that is worse for the landlord and worse for the public; but still there is a tendency of the landlords to rush their land rather than to keep it back. That is my experience."
Vol. IV. of Min. of Ev.,
App. No. V., par. 7.
Vol. IV. of Min. of Ev.,
App. No. IV., par. 18.
Mathews, Vol. IV. of Min. of Ev., App. No. VI., pars. iii., xvi. 22,040-2, 22,102-5.
F. W. Hunt, 22,556-8.
Also Mr. Sabin says: - "The difficulty of recent years, as regards London, has been, not to bring such land into the market, but to keep it out. The most unfortunate results have sometimes followed the presumption that mere vacant space get-at-able in some fashion could be treated as building land ripe for development. It is to this forcing of the market that may be attributed the production of such shoddy ground rents as I have referred to. A speculative land-jobber, a penniless builder, with a timber merchant and brickmaker ready to give credit until houses are sold, can create some sort of building estate anywhere near a town. Such properties might have been seen in the districts I have named, and, no doubt, elsewhere. A new neighbourhood may, of course, be opened up, but a reasonable demand and a reasonable supply must go together. If land in the centre of overcrowded districts could be increased, rents would, no doubt, decrease, but land on the outskirts is usually opened up for building as soon as the demand arises from persons able and willing to live on such outskirts. That more rooms are wanted, the present condition of London affords melancholy evidence, but the taxation of vacant land would not remedy the evil. I cannot see any reason for such a tax, that could not be equally urged in favour of fining every owner who did not cover his land with Queen Anne's Mansions, or build a seven-storied tenement dwelling where he has built two-storied houses. Near London it must not be overlooked that areas that will become building land are frequently let for football, cricket, tennis, and other purposes, and are, I apprehend, rated accordingly. Such user is to the advantage of the public, and often leads to a demand for their perpetual dedication to the purpose."
Again Sir A. De Bock Porter said: "The taxation of vacant land would hardly tend to the abin, Vol. IV.of Min.of Ev., App. 2, No. III., par. 18.
Advantage of the Taxing Authority. It would have the effect of forcing it into use, perhaps, but not to the best advantage. By waiting, the owner presumably obtains the best possible price, if put to the best possible use, and the Taxing Authority gets its share of the increased annual value. Where building land is forced into the market before it is fully ripe, it is found most prejudicial to the permanent interests of the landowner, and of the neighbourhood in which it is situate.
"An attempt was made some 40 years ago to force into the market some building land on the fringe of London in the neighbourhood of Willesden. An attempt was made to build there, and one or two lessees took land and failed. The fact of its being forced into the market beforehand really has prejudiced it for some 20 years; it was 20 years before the property really came into general demand for building purposes. The fact of a portion of it having been forced into the market and built upon, really prejudiced the area for a considerable distance in its immediate neighbourhood.
"You may be quite sure that the Ecclesiastical Commissioners never retain land which they think can be used to the best possible advantage, and the Local Authority participates with the Commissioners when it is so appropriated. If you force land into the market and take a smaller sum, the Local Authority gets a smaller share for the currency of the lease that may be created; whereas, if you wait and bring it into use when the best possible value may be got out of it, you give the best possible contribution to the Taxing Authority. The interests are identical."
Sir A. De Bock Porter further expressed the opinion that the building of the smaller properties yields the largest result to the landowner, and that it is to his interest to put small houses upon property.
The main objections to rating building land were thus summed up by Mr. Sargant: "(1.) Such rating would not have the effect of increasing the supply of well built houses; nor, if it had, would this be an admissible motive for imposing.
De Bock Porter, 22,827, 22,846, 22,855, and Vol. IV. of Min. of Ev., App. No. IX., par. 15.
"(2.) Vacant building land is not in fact benefited by the expenditure of the rates. "(3.) There would be the greatest difficulties in defining what is vacant building land. "(4.) To rate vacant building land on its capital value would be contrary to the principles of taxation accepted in this country. It is better to leave owners to develop it, and turn it into income-producing property, and then rate that property." Dealing with the two last points, Mr. Harper admits as regards No. 3 "it is, no doubt, difficult to distinguish exactly between land which is actually ripe for building, and land which is only ripening." Such a distinction, he says, can only be fairly made by an expert, "but no expert engaged in the preparation of a valuation list would be likely to include as building land any site as to which reasonable doubt existed."