Raise the Hammer

canbyte, "You have to get beyond the rhetoric and beyond thinking of the sellers to thinking of the buyers. Why should they raise their offers?"

Because they want to make money. Downtown Hamilton property owners would charge 10X as much as they do today, but there are no buyers. That's why the city should step in and act as buyer of last resort.

By buying up vacant and under utilized properties, the city would increase the demand side of the equation. When you increase demand and you hold supply steady, what happens to prices? They increase.

The city wouldn't even have to buy properties cheap, or use eminent domain, because that would actually work against the goal, which is to increase prices. That would appear to be what Santa Ana did, they wanted land and if they could convince people to sell cheap, they were happy.

Santa Ana also appears to want to control development, not something I am advocating. All I want is to create an environment where developers can build and make a profit. If you can create those conditions, in part by controlling the level of supply, developers will seek us out, not the other way around.

..."Isn't it just derelict owned by city?"

Yes, except if the goal is to increase the demand for land and land prices, the city would be sitting on an asset that would increase over time.

..."Why don't we just pool our resources and buy these places ourselves?"

Because that would not decrease the supply of usable floor space. For example, if you bought the Royal Connaught, your goal would be to make money by renting it out. If the city bought it, it could afford to take it off the market and watch as other properties increased in value. As these assessments went up, so would city tax revenue per property, plus the land that they own would not be paying tax.

The best thing about having the city buy back this undervalued land is that it would bring stability to the market. For example, if the city felt that land prices were rising too fast, they could sell some off and bring prices down. By acting as a counter balance to the market, it would reduce the problems associated when fear and greed take over people's minds. Think of the city acting like a parent, encouraging growth, but also imparting wisdom and discipline when necessary.