For more information about how land reform can create meaningful work, restore our ecology, and bring more wealth into our local communities, I invite you to read my book Land: A New Paradigm for a Thriving World.

1. Land exists in limited quantity for each location (one can’t make land), and so supply is fixed.
2. As more people live closer together, demand for a location increases. With supply fixed and demand increasing, prices rise.
3. If people rented land from the City of San Francisco (while owning the buildings), they would have to pay a monthly contribution to the City of San Francisco for the land they used.
4. But because property owners in San Francisco don’t rent land from San Francisco, but instead buy that land from other people and own it outright, they are able to keep these land rents for themselves. When it comes time to sell their properties, they—not San Francisco—keep the gains.
5. As a result, the City is left with a lot less money to pay for infrastructure, public services, and so forth. Meanwhile, the people who can afford to buy end up increasing their wealth, and thus the gap between rich and poor widens.
6. But the City still needs to raise money, so the City raises money for example through fines (such as parking tickets), which penalize those on a low income who need every cent they earn, and property taxes, which make buildings more expensive and discourage affordable housing (however, property taxes also tap into land values, which is a good thing, so property taxes are a mixed bag).
7. If the City of San Francisco were to receive the full rental value of its land and redistributed this wealth to all San Franciscans via a Universal Basic Income, we could stop gentrification in San Francisco. The Universal Basic Income (UBI) would go a long way toward minimizing inequality and relieve a lot of the social tensions that exist in the City.

The Universal Basic Income would raise the quality of living in the city, and would therefore also increase the rental value of land. But because San Francisco would collect these rent increases and then redistribute them back through public works and a UBI, all residents of San Francisco benefit.

Because property owners currently don’t have to pay much money to the City for their ownership of land, they are not encouraged to put it to efficient use. Rather than develop the property and create more valuable housing, for example, (which the property tax discourages), it may make more sense for the property owner to just wait and then cash in later on by reselling the property at a later date. For example, this parking lot uses a lot of space. Not a very efficient use of space—especially given the housing shortage in San Francisco.

For more information about how land reform can create meaningful work, restore our ecology, and bring more wealth into our local communities, I invite you to read my book Land: A New Paradigm for a Thriving World.