Spencer Heath Archive

Item 2039

1940

Printed pamphlet, one of a triplet of pamphlets on real estate that Heath carried with him, often stapled together. The first was titled, Private Property in Land Explained: Some new Light on the Social Order and Its Mode of Operation (Item 2250). The second and third were both titled, Real Estate — How to Raise and Re­store its Income and Value, but differently subtitled, the first being this one, subtitled, Questions for the Consideration of Land Owners, and the second, The Administration of Property as Community Services (Item ­­­2032). All were revised and used in Citadel, Market and Altar (Items 2225-2236).  

 

 

 

 

REAL ESTATE

How to Raise and Restore

Its Income and Value

 

 

Questions for the Consideration of Land Owners

                                      

       

 

 

 

 

 

 

 

 

 

SPENCER HEATH

     Roadsend Gardens, Elkridge, Maryland

  and

  420 West 116th Street, New York City

Kings Crown Hotel

 

Copyright 1940, by Spencer Heath

 

 

QUESTIONS

FOR THE CONSIDERATION OF

LAND-OWNERS

Being the Proprietary Officers by and through whom

Society Exercises Sovereignty Over its Territory

and Justly Distributes its Public Values.

 

1. Dependence of Value upon Income

 

Does not the value of your lands, like the value of any other investment, depend finally upon the income that they return to you?

Is not their present actual value the capitalized net rent that they yield, and is not their prospective or speculative value merely the capitaliza­tion of prospective rent or prospective increase in the rent yield?

Is not all your capital enhancement due, finally, to the enhancement of rent and to the prospects for its enhancement?

Is not the value of occupied land made up of the actual rent capitalized, plus or minus the prospective increase or the prospective shrinkage in the actual income from rent?

And is not the value of all unoccupied or non-income-bearing lands merely a speculative value — the capitalization of the prospects for future rent being received?

2.  Public Services in Excess of Public Disservices Necessary to Land Value. Effective Demand Also no Less Necessary.

    Are not the public services of government in­dispensable to the existence of all civilized values and, therefore, does not your land have a value only so long as government, on the whole, does less harm to your territory and its inhabitants than it does good, and thus makes ground value and ground rent possible?

    Is not your net ground rent (the basis of present land value) merely the market expression of the difference between what government creates and what government destroys, — between what it gives to and what it takes from the inhabitants of your territory?

    Is not net ground rent the measure of what is left to you and your tenants (the rent to you and its market equivalent to them) between the right hand of public service and the left hand of prop­erty seizure by taxation, with its consequent public distress and despair?

    When rising taxation and governmental restric­tions make business and production unprofitable, does not this destroy the demand for your sites and locations?

    If the demand for your property is being de­stroyed, what does it avail that it be rich in natural resources or advantages or that it be well supplied with public improvements and governmental services, — even though it be located in the midst of population?

3.   Public Business now Poorly Organized — Destroying Values Instead of Creating them.

    Is not government the only business in the world that is conducted exclusively by persons on wages or salaries and carried on without any proprietary supervision?

    Do you, as the community proprietors who merchandise the public services to your custo­mers (tenants or purchasers), take any willing or active part in either the administering or the financing of them?

    Are not the public servants (servants of your territory) in need of proprietors to supervise and finance them and sell their services to the public, — just as much as the employees in private businesses are?

    Is not your proper interest as the landlords of your communities to finance and administer the services you sell to your tenants, the same as it is for the landlords of a hotel to do so?

   If the owners who collect in rents the value of all the general services performed, either in a community or in a hotel, fail to administer the properties and supervise the services, and permit the servants to seize the property, regulate the affairs and prostrate the business of the occupants, will not the one as surely as the other go bank­rupt and eventually lose all income?

4.   Land Value a Service Value — Rent the Auto­matic Recompense to Land Owners for Services.

   Do you think your tenants pay rent merely for earth or space, or do they pay you for the net balance between the advantages enjoyed and the disadvantages that must be suffered by those who occupy that space?

   Is not your net ground rent really the income from the public business remaining to you after all labor and material and public debt costs have been deducted in advance by taxation?

   Do you not suffer in your own rents and values from the taxation and restrictions on your ten­ants — restrictions that smother their business and hinder them from producing the wealth where­with to pay rent — even more than you suffer from the taxes that fall directly on your values and incomes after you receive them — and prevent you from keeping very much out of the little rents that your tenants can pay?

5.   Income to Land Owners (Rent) Arises from the Administration of Public Capital and Sale of its Services.

    Since your final net income is really what the public business earns for you as the public pro­prietors, after all its costs — both necessary and unnecessary, proper and improper — have been deducted by taxation, then is not your income really and precisely what the public capital yields to you above the cost of public labor and public debt?

    When each of you became, as land owners, the public proprietors did you not, in effect, make in­vestment in the public capital with a view to the net income then yielded or then expected to be yielded by it?

6.   Land Owners the Equity Owners of the Public Capital and Income — The Real Owners.

    Is it not the order of nature and of society that land owners, as the public proprietors, must re­ceive collectively in ground rent whatever net income is yielded by the public capital?[1]

    Does not this fact constitute you the beneficial owners and therefore, in a business sense, the real owners of that public capital?

      Is it not highly advantageous to all parties that the real owners of the capital engaged in any service or enterprise should direct and administer that enterprise?

    And does this not apply to you, as the public proprietors of the public capital that is engaged in the public enterprises, as much as it applies to the private owners of the private capital engaged in private enterprise?

7.  Obligations of Land Owners to

    Themselves and to Their Communities.

    If you were the proprietors of a hotel instead of a community, you would know that you owned the capital invested in that hotel and that your income was the earnings of that capital, after deducting all costs.

    Would you permit the servants in that hotel to destroy your income by the seizing of property, controlling and destroying their business and vio­lating the liberties of the occupants of your hotel?

    Would it not be your very first and obvious duty to yourselves and to your tenants not to sanction these abuses but, rather, to protect them against such fatal exploitation?

   Is it not now your corresponding obligation to yourselves and to your tenants to stand between them and further seizures of their property and destruction of their business by taxation, in order to revive demand and thus restore the values of your holdings by making saleable the public ad­vantages that your locations afford?

8.  General Tax Relief a Public Service

    and Advantage to Tenants.

    Does not taxation now stifle business, inhibit its expansion and thus maintain both unemployment and under-production?

    Is not much of this taxation wholly unnecessary to essential governmental services and is it not expended often for purposes injurious to your present and prospective tenants and purchasers,— prejudicial to their public welfare?

    Would not the removal or reduction of such un­necessary taxes be a positive boon, a public benefit, service and advantage, to every business that occupies or uses land and pays rent to obtain and enjoy public advantages?

    Would not your tenants be benefited first, by the direct amount of their exemption from taxa­tion; second, by relief from the indirect dis­couragement of enterprise and curtailment of pro­duction caused by the imposition of unnecessary taxation, and third, by their relief from those regulative, restrictive and destructive activities on the part of government that give excuse for need­less taxation and which unnecessary taxation is imposed to support?

9. Tax Reduction the Key to Restoring

  and Raising Land Values.

   Do you think that with all the foregoing benefits and advantages to the conduct of their business and their production of wealth your tenants would not bid eagerly against each other for sites and public services until the amount of new rent created would far exceed in amount all of the taxation abolished?

   Would not the entire amount of new rent so created be your proper recompense and profit for your services to your tenants in lifting such burdens from them and safeguarding their prosperity?

   Would not your unburdening of industry and wealth production from restrictions and penaliza­tions return to you, by way of recompense, a voluntary income from rents far greater than the amount of all enforced taxation and all present rents combined?

    Would not this result, eventually, in all public values coming to you as rents and all public costs flowing through your hands, making you the paymasters and thus establishing you as the natural supervisors of the community servants, the proper administrators of the community capi­tal, and the honorable distributors and merchan­disers of its services to the public throughout your communities?

10. Public or Community Service —Administration of Community Capital—The Only Business

Proper to Land Owners.

    As owners, administrators and supervisors of the public capital and labor, would not every act and policy of good administration be rewarded and recompensed to you in superior rents for your locations, while any lapses from good administra­tion would be penalized by diminishing your returns?

    Would not such conduct of your business re­deem your now precarious fortunes and at the same time put the providing of public services upon a value-received basis instead of a privilege basis and redeem government from its present practices of force and indirection in obtaining its revenues and from the restrictive policies that impair all revenues and values and so thrust idleness upon land, capital and men?

    If you organize yourselves as the proprietary interest in your communities and knowingly you enter actively upon your ownership of the public capital—if thus organized as the proprietors of the public community business you safeguard your patrons, purchasers and tenants against govern­mental violence and expropriation and undertake responsible and efficient administration of the services that you sell to them— will not the greatest and best business in an increasingly prosperous land then be yours and yield you incalculably high net profits, honors and returns?

-o-

Note: — The foregoing, “Questions for the Con­sideration of Land Owners,” is an introduction and condensed outline of the writer’s more ex­tended discussion of the same general theme, namely, “Real Estate — How to Raise and Re­store its Income and Value,” under the sub-title, “The Administration of Property as Community Services.”