A Natural Source of Local Revenue1
| DOI | http://doi.org/10.1002/j.1099-162X.1960.tb00169.x |
| Author | B. W. Brookes |
| Published date | 01 April 1960 |
| Date | 01 April 1960 |
A Natural
Source
of
Local
Revenue!
by
B.
W.
BROOKES
WHEN
Lord
Rank
closed the doors of his Beckenham
'Odeon'
at least five local
shopkeepers felt the draught.
And
at
the Valuation Panel in
March
1958 all
five .were granted reductions in their rating assessments.
The
panel decided
(reported the Advertiser)
that
"the
closing of the cinema
had
had
adetrimental
effect on trading."
As readers of this
Journal
will know British rates are levied on the composite
annual
value of
land
and
buildings. Now obviously the closing of the
Odeon
did
not
affect
the
value of the bricks
and
mortar
of which these fiveshops were
constructed.
(It
would cost no less -
and
no more - to build a shop alongside
a
dormant
Odeon
than
alongside an active one.) So Lord Rank's action must
have
had
its deadening effect,
not
on the value
of
the shops' premises,
but
on
the value of the land they stood on - their sites.
This illustrates how the value of one owner's plot
ofland,
even with abuilding
on it, is affected by the activities of another. Often, ofcourse, as with the opening
of a new cinema the effect is beneficial.
In
fact almost
any
development, public
or private, will either raise or lower surrounding site values. Every time a bus
company extends its route; every time a derelict space is filled in with an
attractive shop front; every time the local authority provides a new road,
street lighting or a public library, the value of neighbouring land is sensibly
affected.
In
short, while the value of a building is
due
to the efforts of the
owner, its 'position value' - the value of the site underneath
it
-is
due
to
environmental factors.
This phenomenon has
made
development by the local authority into a
double-edged weapon.
For
as it builds its roads
and
provides amenities it finds
the cost of acquiring land for further development increasing, piling up before
it like snow from its own snow-plough. As Winston Churchill
put
it:
"The
municipality, wishing for broader streets, better houses, more healthy, decent,
scientifically-planned towns, is
made
to
pay
in exact proportion, or to a very
great
extent in proportion, as it has exerted itselfin the
past
to make improve-
ments.
The
more it has improved the town the more it has increased the land
value,
and
the
more it will have to
pay
for
any
land
it
may
wish to acquire."
Moreover,
ifsuch
land
had
been held idle it would
under
our
present system,
have
paid
no rates.
In
the process
that
gave the land its value its owner, as the
owner, would have played no
part.
Irrespective
of
its market value the land
might for years have remained untouched
and
untaxed -ripening
under
the
sun-ray
treatment
of community expenditure.
For
this reason, more
than
any other, the thoughts of local authorities have
turned
to the site value rating system. Between 1936
and
1946, well over a
hundred
authorities passed resolutions in its favour.
For
under
this system all
land,
urban
or rural, occupied or vacant, contributes to the local revenue in
proportion to its value. Moreover, so
that
no citizen shall be penalised for his
own enterprise
and
initiative all buildings
and
other
man-made
improvements
are
completely relieved from local taxation.
1Published
with
acknowledgement to the Federation of Residents' Associations in the
County
of
Kent.
III
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