Land value and Inflation: why finding infinity within what’s finite is the only option!
The entire teleological fulcrum on which the concept of land and its ownership is based derives from the logic that man, as a rational being, has certain inalienable rights, including the right to possess a piece of space for himself. In this context, space can be understood as a construct largely defined by the notion of land.
The famous 17th-century political philosopher John Locke provided a more substantive understanding of this through his theory of land acquisition, which was originally documented in his landmark work, Two Treatises of Government. His theory is based on the axiom that before the creation or operation of laws, all land was unowned. A person could assert ownership based on the twin precepts of:
⦁ Acquisition via exploration
⦁ Acquisition by purchasing.
Unfortunately, Locke’s theory was defined within the confines of what could be called a classicalist worldview of nature, which gave the quality of infinitivity to land, something that goes completely against the natural schema of things.
This, therefore, results in a situation of perpetual inflation with an ongoing mismatch between demand and supply. Applying this to the current situation in India, it is easy to see why land prices have experienced such an aggressive increase. Growing macroeconomic pushes in terms of growth have widened the already bulging demand pie in terms of demography, while sustained momentum in infrastructure development has exponentially increased the pressure on urban land holding capacity, with corresponding expansion in tendencies related to urban sprawl and suburbanization, not ameliorating it in any way.
The truth is very simple: as the aspirational profile of the broader market changes, concentric movements will be seen towards areas that are seen as becoming more ‘affluent’ or ‘well-connected’. No amount of augmentation in transit infrastructure would change that.
Thus, when one considers the price situation in tier 1 metropolitan areas such as Bombay, Delhi-NCR, Bengaluru, or Hyderabad, the post-pandemic reset to hikes of 20 to 200% seems understandable. This surge is even more pronounced in areas near major infrastructure projects such as motorways, metro corridors, rapid transit corridors, airports, dedicated industrial zones, smart cities, and so on.
As a result, most people will continue to be denied the right to own land or a home. This is despite policymakers’ strong push for affordable home ownership. This is simply because economic forces can only be manipulated so far without a corresponding shift in mindset or understanding.
To address this, therefore, one needs to break away from the archaic interpretation of land and living space and recalibrate it in a way where an effect of infinity could be introduced within the broader connotations of finiteness that currently characterise its value and movement as a commodity.
This has been done for quite some time. The concept of vertical growth in terms of living space inspired the first skyscraper movement at the turn of the twentieth century. Material science, design, architecture, and engineering advancements enabled this, with people now living and working above the clouds.
And not just vertical growth; I am talking here about organically growing communities, which could exist on land, water, or even the skies. Such a philosophy of urban living challenges the existing hub-and-spoke practices of horizontally expansive cities. Take, for example, the LINE project being built by Saudi Arabia. As the name itself suggests, this project calls for building a smart city enclosed in between two mirrored buildings, each acting like a wall with a height of around 500 metres, or 1600 feet. The city will be developed in the space in between and is designed to house around 9 million residents. It will be carbon-neutral, emission-free, and car-free, with intelligent mobility solutions being deployed throughout, and it will be super-dense, thereby directly challenging the concept of sprawl.
Saudi Arabia is also envisioning building a city on a yacht. They have christened it Pangeos, a turtle-shaped mega yacht featuring a wide range of amenities such as rooftop gardens, malls, international helicopter pads, resorts, and many other constructions.
This and more such concepts, including vertically growing cities that are fully self-sufficient in every aspect from energy to food, are being experimented upon, and India should take some inspiration from that. The aggressive growth of skyscrapers in areas like Mumbai and the increasing embrace of modularization as a key construction paradigm by government endeavours like the Pradhan Mantri Awas Yojana are encouraging signs towards that.
Another critical aspect that can be considered, especially for coastal cities, is sustainable land reclamation that doesn’t harm the overall marine ecosystem. Japan has been able to successfully achieve that through many landmark projects scattered across its main urban conurbations of Tokyo and Osaka. UAE has also developed rather spectacular projects based on coastal land reclamation, like Palm Jumeriah. The basic principles and methodology of some of these projects can be embraced by India to unlock more land and alleviate the problem of housing shortages in coastal megapolises like Mumbai.
Some immediate measures and practises that can be implemented include the rationalisation of building codes, the re-interpretation of urban plans to create smart and sustainable living spaces with built-in mobility, and the embrace of concepts such as shared living with a complete shift away from traditional notions of homeownership. Of course, this should be accompanied by an overarching development vision in which value creation centres are decentralised and distributed, resulting in migratory pressure relief for tier 1 cities.
However, in the medium to long term, the only feasible solution is a complete re-interpretation of land as a concept and item; to put it another way, anywhere on which humans can successfully exist can be considered as land, a much broader and potentially infinite construct that, if embraced, would solve the current inflation-ridden imbalance.
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