Comment 52471

By A Smith (anonymous) | Posted December 01, 2010 at 17:59:48

adrian >> this claim does not say that property owners sit back and watch the money roll in, it says that they invest

People invest because they think they can earn a positive return, we agree. However, if for every dollar of LRT investment, studies show that there is $10 of new private investment in the area, that implies that the new market demand for properties in the area is even higher than that. Why invest $10 and only get back $9?

If a $1 investment in LRT equals $10+ in new demand for nearby property owners, why are these property owners waiting for the government to build it? It doesn't make sense to not borrow $1 from the bank at 5% interest, build a private LRT and then watch the demand for my property go up by 10X.

If, however, borrowing $1 at 5% interest only increases the value of my property 97 cents, then I will wait for the taxpayers to fund it. I only have to pay my share of the new taxes to fund LRT, $1/500k people, but I stand to gain the lion's share of increase in property values.

Or, even worse, LRT will reduce the value of my property due to less car traffic, less after tax earnings. In this case, any money spent by myself or others on LRT should be avoided in place of tax cuts.

adrian >> the interests of cities as a whole transcend the impact on small geographic regions, or at least ought to.

I agree and if people could keep more of their earnings, they could decide as individuals where their money should be spent, rather than having a few people in government decide for them.

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