Review of Broken City: Land Speculation, Inequality and Urban Crisis by Patrick M. Condon (UBC Press, 2024)
What happens when urban land costs escalate so rapidly that the majority of the next generation is shut out from home ownership and affordable rents? And what can we do about these rapidly escalating urban land prices?
These are two key questions that Patrick Condon explores in his influential book, Broken City.
Building on the work of Thomas Picketty (Capital in the 21st Century) and his 200 year longitudinal study of wealth accumulation and growing inequality, Condon turns his attention to the past 40 years and one particular area of inequality – the cost of urban land.
In Vancouver for example, where Condon lives and teaches, land prices – adjusted for inflation – rose by 500 percent between 2006 and 2022, while building costs rose much more modestly, at about 30 percent.
He cites similar trends for many major urban centres across the Western world (and to some extent in nearly all growing cities in North America, Canada, the UK, New Zealand and Australia – the countries in his study).
Control ‘Land Rents’
So what can we do about skyrocketing urban land prices? One of the typical responses that governments make is to attempt to increase housing supply.
Condon demonstrates that in a global market this strategy has little impact on reducing housing prices, particularly if it is not paired with other zoning and rent control policies. Indeed, when housing supply increases without any of these adjoining policies, nearly all the increased value of the land – what economists refer to as ‘Land Rent’ – goes to the owner, not into the hands of the public or the wage earner or even the developer.
This is the reality driving increasing inequality in our world between home / land owners and mere wage earners. Through extensive research and case studies, Condon demonstrates that if Land Rents are left unchecked, Western cities are headed for economic polarization on a scale we have not seen before.
Written shortly after the Covid pandemic, he also shows how the pandemic negatively impacted those in rental housing much more significantly than homeowners, given that rental housing is often more crowded and sub-standard. His point is that this rapidly increasing polarization between the housing haves and have-nots is, therefore, not only an inequality issue, but is also a health crisis.
Repeatedly in Broken City, Condon stresses that we must find a way to tax or curb rising Land Rents if we are going to begin to decrease the economic gap between home/landowners and wage earners. (In support of this goal, Condon turns to once influential economist Henry George).
Vienna’s example
The keys to achieving this goal, for Condon, are particular zoning practices and housing policies. To point out possibilities, Condon turns our attention to the city of Vienna.
While Condon sights a number of housing policies that countries and cities have implemented over the last century that have been ineffective in reducing housing prices, Vienna made some astute moves. After World War II, Vienna introduced strict rent controls. Since these rent controls disincentivized private development from creating new rental housing, the government began buying up significant tracts of urban land as prices drooped.
They then went about building social housing on this land that was operated by co-ops or social housing organizations. Since over 30 percent of Vienna’s population lives in affordable, subsidized housing, they are a large enough voting block that can strongly influences future government policy to uphold this form of housing.
This story of Vienna’s housing policies also illustrates that people don’t need to own their own home to feel secure in their rental housing.
Policy proposals
In the final chapter of the book, Condon reiterates the need to implement zoning practices and housing policies that will decrease the price of urban land and shift gains in value from the owners towards wage earners and the public.
Condon promotes three primary policies:
1. A much more aggressive tax on gains in Land Rent.
2. Zoning and development practices that require developers to build significant amounts of affordable housing for any increases in density.
3. Rent controls that limit owners’ ability to increase monthly rents to tenants.
I highly recommend Condon’s book for understanding our present housing crisis and for finding solutions backed up by clear evidence. One does not need to be an economist to either understand or appreciate his carefully articulated vision of housing justice.
Final thoughts
In response to Condon’s thesis, allow me to offer three final reflections and accompanying questions.
1.In a political context with so much distracting noise, where the commitment to the common good is eroding, voices like Condon’s seem muted. Can society recover his vision for the common good? And how might we compel our fellow citizens to uphold this vision of housing justice and to advocate for zoning practices and housing policies that make housing more affordable?
2. Consider this quote cited by Condon to outline some of the reasons Henry George’s solid arguments for taxing or curbing Land Rent in the early 1900s were ultimately rejected. This was a period of secularization of US colleges. Businessmen were replacing clergymen on boards. The new broom swept out some old problems, no doubt. At the same time, it posed new threats. . . . Clerics, after all, owe some allegiance to Moses, the Prophets and the Gospels, which are suffused with strident demands for social justice. They were displaced by others more exclusively attuned to the Gospel of Wealth. –Gaffney and Harrison, The Corruption of Economics, 50–51). This quote comes as a challenge for the church – and other organizations engaging the public – to rediscover a positive prophetic voice in Metro Vancouver. We need more groups to engage the vacated space between the individual and the state / market.
Tim Dickau
3. While not within Condon’s geographical purview, the growing inequalities he analyzes between landowners and tenants in Western cities has been true for the majority world cities’ occupants for many years – and with a more pronounced gap. Perhaps as more of us in the Western world are pulled into this landless and unaffordable housing plight, it will motivate us to finally act for social justice amidst the failure of the neoliberal capitalist approach to housing. For the sake of the generations to come and in the light of our vocational call by the Divine to justice and mercy, let’s hope this will be true!
Tim Dickau is Director of Citygate Vancouver, which helps churches collaborate with others to address systemic issues like unaffordable housing.
He has posted this comment on this site as a member of The Bell: Diverse Christian Voices in Vancouver. Go here to see earlier comments in the series.