190 History of Local Rates
the present system to the new would certainly reduce
the net yield of the property to the owner who does
not sell it, the fact that it would also reduce the capital
value or selling price in just the same proportion,
would make the continued holding of the land exactly
as good an investment as before. If I hold prospective
building land worth at present £1,000, and a change
in methods of rating reduces the value to £800, why
should I sell any more than before? And if I am
frightened into selling by the talk of the promoters of
the scheme, why should the braver person who buys
at £800 proceed immediately to sell at a loss ?
It will perhaps be said in answer to this that the
encouragement to building afforded by the exemption
of buildings from rates will cause a larger demand for
land, so that it will be more profitable to sell for
immediate building than it is now. This means that
the occupiers will be ready to pay the increased rate
on the land and a rent not reduced so much as the
rate is increased; to put it in another way, the
occupier, no longer having to look forward to paying
rates on his building, will be ready to pay more (in
rates plus rent or interest on capital expended in pur-
chase) for land on the outskirts than he is now. But
the argument appears to be unsound. So far from
encouraging building in the outskirts, it appears that
the proposed scheme would provide distinet and
strong encouragement to unwholesome concentration
of buildings in the centre of towns. At present it is
all the same, so far as rates are concerned, to a man
whether he lays out money in buying more ground or
in extra cost of building higher: whether he spends
another thousand pounds in buying extra land on