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Do landowners own the air space above their properties?<\/p>\n
\u201cIn the 1920s, property lawyers were puzzling over the aeronauts because air travel was just invented,\u201d said Cameron Murray, an Australian economist visiting the University of British Columbia later this month. \u201cIf you fly over someone\u2019s house, are you trespassing?\u201d<\/p>\n
The Latin expression Cuius est solum, eius est usque ad coelum et ad inferos<\/em> \u2014 \u201cFor whoever owns the soil, it is theirs up to heaven and down to hell\u201d \u2014 might be popular but is misleading, he says.<\/p>\n The vertical limits of property rights depend on how they are zoned. Anything higher than that is public air space.<\/p>\n Cities looking to grow will upzone land \u2014 that is, rezone for greater density \u2014 so that more people can live and work in the taller buildings that are erected.<\/p>\n However, this means that the city, a public body, is transferring public air space into the hands of private landowners. So what are they doing to make sure that the public is being compensated?<\/p>\n This is the problem explored in a paper by Murray and McMaster University research fellow and Canadian political scientist Josh Gordon, published in the journal Housing Policy Debate last year and titled \u201cLand as Airspace: How Rezoning Privatizes Public Space (and Why Governments Should Not Give It Away for Free)<\/a>.\u201d<\/p>\n \u201cUpzoning simply makes the inequality inherent in property ownership worse,\u201d said Murray. \u201cYou\u2019re adding rights to property owners and giving nothing to non-owners.\u201d<\/p>\n Questions about zoning are timely in British Columbia because the provincial government unveiled reforms last fall that will permit the densification of all single-family properties up to four units. The province will be announcing a few more new zoning tools in the coming months. With these pushes for more housing, municipalities are hurriedly reviewing what this means for their current community plans.<\/p>\n Murray recently visited Vancouver during these changes as part of a series of events<\/a> this spring on housing and local democracy hosted by the University of British Columbia\u2019s School of Architecture and Landscape Architecture<\/a>.<\/p>\n As urban regions like Vancouver densify, the paper that Murray co-authored contains solutions from jurisdictions around the world that have implemented mechanisms to capture the lift in land values created by upzoning.<\/p>\n \u201cA lot of places don\u2019t give air space,\u201d he said. \u201cThey sell it.\u201d<\/p>\n Here are three solutions from Murray and Gordon\u2019s paper for making upzoning more equitable.<\/p>\n A \u2018betterment tax\u2019<\/strong><\/p>\n Property owners benefit from upzoning which causes their land to go up in value. Because they had nothing to do with that boost, some jurisdictions have a \u201cbetterment tax\u201d in place to capture some of the lift created by a public decision around land use.<\/p>\n A betterment tax means that property owners can\u2019t just go ahead and start building after their land is upzoned. Instead, they must buy the right to do so.<\/p>\n In the Australian Capital Territory, there is a betterment tax called a \u201cleave variation charge.\u201d<\/p>\n For example<\/a>, a property with a low-rise building has been upzoned for the possibility of erecting a tower; if the owner of the low-rise wanted to tear it down and build a tower, they would have to pay the government a tax to access that higher-density zoning.<\/p>\n The tax is calculated like this: the value of the land under the previous zoning (in the above case, the low-rise) is subtracted from the value of the land under the new zoning (in the above case, for a tower). The government generally collects 75 percent of that difference in value created by the upzoning.<\/p>\n While the tax is a way for the government to help the public recoup the profits created through growth, it can face opposition from landowners, say Murray and Gordon.<\/p>\n Auctioning air space rights<\/strong><\/p>\n Murray and Gordon give the example of S\u00e3o Paulo, Brazil, which sells air space rights in urban areas that the city wants to see redeveloped.<\/p>\n These rights are sold in an auction<\/a>, and a percentage of the profits goes back to the city to pay for the infrastructure required to support the future density.<\/p>\n The uniqueness of an auction means that the private parties bidding for these rights are the ones who decide what they are worth. This saves governments the hassle of determining what would be a fair percentage to charge landowners for the land lift created through upzoning.<\/p>\n Upzoning for public players<\/strong><\/p>\n By upzoning properties owned by public agencies, the benefits can be used for the sake of the public.<\/p>\n In Singapore, the state\u2019s Housing and Development Board will buy and upzone land for public housing.<\/p>\n In the Netherlands, municipalities purchase rural land, develop it, upzone it and sell it to the private market.<\/p>\n In Hong Kong, the MTR transit operator benefits from upzoning by developing and managing its properties, allowing it to provide housing and reinvest profits back into public transportation.<\/p>\n Zoned out?<\/strong><\/p>\n In 2032, the Summer Olympics will be coming to Brisbane, Australia, where Murray lives.<\/p>\n \u201c[The government] has acquired<\/a> seven hectares of riverfront land for an Olympic venue in 10 years\u2019 time,\u201d said Murray. \u201cAll of a sudden, there\u2019s money, there\u2019s land, there\u2019s plenty of space to do whatever you want. But when it\u2019s community housing, parks, and facilities? It\u2019s like, \u2018Sorry guys.\u2019\u201d<\/p>\n Why are some governments so averse to taking a more active role when it comes to housing and upzoning?<\/p>\n \u201cI think we\u2019re used to it because there are political and economic incentives over the long term that seep into politics,\u201d he said. \u201cPeople don\u2019t want cheap houses. Councillors don\u2019t want cheap houses. Investors, landlords, property owners, provincial state governments, they don\u2019t want cheap houses. The average politician in Australia has 2.5 houses<\/a> worth a million dollars each.\u201d<\/p>\n A favourite quote of Murray\u2019s comes from Charles Darwin\u2019s visit to Sydney in 1836.<\/p>\n \u201cThe number of large houses just finished & others building is truly surprising: & with this, everyone complains of the high rents & difficulty in procuring a house,\u201d wrote the famous biologist in his diary.<\/p>\n \u201cIt\u2019s the first thing he writes before he knows anything about the animals,\u201d said Murray. \u201cThe free market makes housing cheap? I\u2019m not so sure that is the answer.\u201d<\/p>\n …<\/p>\n Christopher Cheung is a reporter at The Tyee<\/a>, where this story originally appeared.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"