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  1. Nov 2021
    1. Land rezoning and infrastructure decisions, such as rezoning from industrial or farmland to residential land, or building a new transport hub, generate windfall gains to private owners. While some of this is captured in the form of development contributions, the private value capture is much greater than what it contributes back to public coffers.Rezoning of land and infrastructure investment decisions undertaken by government create enormous amounts of private value:Throughout Australia, when land is rezoned from industrial to high-rise residential, a charge is levied to help fund the required infrastructure. A well-situated industrial site in Sydney’s inner west was bought for $8.5 million, rezoned high density residential, then sold again for $48.5 million. The 470% windfall was the result of a government decision: rezoning.

      Rezoning is a key leakage of value from the commons to the private sector. This needs to be addressed in creative ways so that the commons can flourish. Rezoning can be viewed as a form of predatory capitalism, a form of theft from the commons by the private sector. Land owners who reap the benefits don't even think they are committing this theft because it is such normative behavior!