Comment 39057

By Undustrial (registered) - website | Posted March 23, 2010 at 17:40:26

The thing with land is that doing nothing with it can still generate massive amounts of money. If history shows one thing, it's that land virtually always goes up in value, for whomever is able to hold onto the title. As all the trouble in Caledonia shows, sometimes shady land speculation can take generations, or centuries to come to fruition (becoming suburban sprawl).

The earth may be vast, but inner city real estate is not. Those with the clout to buy up buildings and leave them to rot can afford to wait it out. It helps drive up commercial and residential rents (as more people are forced to compete for fewer space), but lower property values. If the building burns down, it's a multi-million dollar windfall, and the owner gets to keep the land, free of any heritage concerns or demolition costs. And it creates an atmosphere of terror in those neighbourhoods driving away most families with the means to escape into the suburbs, consequently removing most of the area's political clout, too.

All a few landowners need do is manage a number of neighbourhoods and engineer a cycle of "decay" (slums, abandoned buildings, etc) and "revitalization" (flagship commercial projects and condos). Those who understand the game can purchase properties at the cost of a small house (like many of the buildings on James North a few years ago) then sell them for many times that amount. This system can function knowingly (since most of these developers do in fact associate), or simply because people at a number of unconnected institutions are good at watching trends. Either way, the system becomes more and more efficient and profitable with each cycle (as profits allow landholdings to increase).

This type of thing is going on in every city across North America right now, from Harlem to the Lower East Side of Vancouver. And the effect on the affordable housing situation is equally disastrous.

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