Upzoning privatises public space and governments should not give it away for free
As a non-economist I had to read it a few times to get the gist of what you were saying and I think the introduction of "air rights" muddies up what most people understand to be a "betterment tax". But that is just my opinion.
I will make a few other points.
When I worked for a LG who had a few Priority Development Areas within its boundaries it always struck me how neatly these PDA aligned to property ownership of what you coyly described as "connected" landowners, even if this did result in very odd shaped PDA boundaries.
But again, as a humble town planner I still don't know what is the ACCOUNTING benefit of having all these significant land parcels that obviously have some increased property valuation, but are left idle for 10 - 15 years before being fully developed. It boost their asset bottom line which in turns makes the company look very prosperous, but without actually being forced to do anything to realise this potential value. MAYBE something could be done around the ACCOUNTING rules to force this land to housing much quicker (e.g. only a small proportion of land that an be realistically developed in 3-5 years can be placed on the books at the inflated potential value and the rest remains on their books at the unimproved land value based on the existing zoning and not the potential zoning).
I have no disagreement with your central thesis that some financial (taxation) penalty could / should be applied to land that has been up-zoned, but not developed over some time. But putting on my planning hat, we regularly up-zoned land with the full knowledge that it won't be developed in the immediate short term (e.g. apartment building around nominated major centres), but will slowly and hopefully developed over the longer time. I gather you are just taking a small part of the profit away for this time lag, but I can't see it forcing this future supply coming to market any faster.
I have often toyed with the idea that we planners upzone TOO much land to allow for freedom of market choices. Again I have no problems with having choices around the city, but as a Council we should have a series of rolling plans that say - this area will be up-zoned for the next 3 - 5 years and after that, what hasn't been been developed reverts back to the original zoning (including all DA that have been approved, but not yet commenced in this time) and we move onto the next nominated area. Your proposal could fit into this model nicely, by adding a extra layer of financial incentive. These nominated areas will be mostly based on those areas that are the cheapest for Council to develop / redevelop in terms of infrastructure spend.
Interesting article but - the Green Belt is around Toronto, not Ontario. Would be like saying the Green Belt around Victoria when you mean Melbourne.
Seems to me that the imperative is to get live-able homes built at the lowest possible unit cost. Once built and occupied the value manifests. That is the time to start taxing via rates, income tax and capital gain. At the outset, if you want the backlog cleared go lightly on any form of taxation. You might even consider the provision of government land at a peppercorn rental for a period of time. The states do this for most forms of industrial development, why not do it for housing? You might consider public acquisition and aggregation of titles so that a decent parcel of land can be put together and have the option of re-forming the road and infrastructure network and enabling homeowners to access to work and shopping facilities within the development so as to make it more live-able. Give existing landowners the opportunity to participate as shareholders in the development. They may be rehoused in the process. Meantime, make available a 'courtesy house', just as you would a courtesy car when your car is being serviced.
All forms of zoning and town planning activities involve upfront cost, delay, and 50 shades of aggravation. There is the interest on the outlay on the land and the interest on the outlay for the build plus the costs attached to the provision of facilities like green space, communal gardening, parking, roadways, playgrounds.
Finally, why not keep the parcel of land so acquired under a single title so that the next round of development is easier. Don't create separate titles for each dwelling but build in incentives for people to look after their houses and be rewarded by having a share in the value that may accrue as the population grows.
Look at it from the point of view that the disincentives to development are currently too great.
Secondly, look at it from the point of view that unless you have a decent parcel of land to develop to create a walkable neighborhood, and reasons to walk to local destinations to work, school, shopping, services and recreation that will relieve you of the burden of vehicular travel to the greatest possible extent, you are not creating a live-able neighborhood, more than likely you will be creating a slum.
Finally, why not have the title to the property revert to the crown in forty years, at an agreed value, capital plus interest, so that the place can be renewed. Nothing is forever.