Large developers / 'estates'

[Luca]

Much of London is still owned by large landlords (estates) that don't so much sell their property as offer very long leases (99-125 yrs). There was a recent exhibition here about them (see enclosed publication).

http://www.newlondonarchitecture.org...eatEstates.pdf

The basic contention is that, by owning a lot of contiguous property, these large landlords can engage in behavior that maximizes (or seeks to) the appeal of the area as a whole, rather than getting the most for the least out of every single building. I definitely recommend reading the piece before posting comments.

I think Jaws should find this particularly interesting because it is in some ways an approximation of his 'private cities' concept. Lifestyle centers and NU developments could also be considered descendants of this system, in some ways.

I was working on a small essay on how it probably makes sense, in a city, to have a mix of public, large private and small-scale private property...and this comes along. What do you guys think?

[BKM]

Much of London is still owned by large landlords (estates) that don't so much sell their property as offer very long leases (99-125 yrs). There was a recent exhibition here about them (see enclosed publication).

http://www.newlondonarchitecture.org...eatEstates.pdf

The basic contention is that, by owning a lot of contiguous property, these large landlords can engage in behavior that maximizes (or seeks to) the appeal of the area as a whole, rather than getting the most for the least out of every single building. I definitely recommend reading the piece before posting comments.

I think Jaws should find this particularly interesting because it is in some ways an approximation of his 'private cities' concept. Lifestyle centers and NU developments could also be considered descendants of this system, in some ways.

I was working on a small essay on how it probably makes sense, in a city, to have a mix of public, large private and small-scale private property...and this comes along. What do you guys think?

Rather interesting essay, Luca. I want to peruse it in more detail at leisure. I've not participated much in jaws' private cities thread (for a variety of reasons), but not
a bad argument.

My major question would be that is there a different cultural tradition in these fundamentally and histroically "aristocratic" estates and the values underlying their owners (no matter how overlayed with modern Anglo-American corporate philosophy they might be on the surface) than would be the case in an American "build it quick and cheap and now" real estate hucksterism system? Not that there are not indeed great American private developers.

[Luca]

Rather interesting essay, Luca. I want to peruse it in more detail at leisure. I've not participated much in jaws' private cities thread (for a variety of reasons), but not
a bad argument.

My major question would be that is there a different cultural tradition in these fundamentally and histroically "aristocratic" estates and the values underlying their owners (no matter how overlayed with modern Anglo-American corporate philosophy they might be on the surface) than would be the case in an American "build it quick and cheap and now" real estate hucksterism system? Not that there are not indeed great American private developers.

The tradition/aristocratic aspects are indeed difficult to escape. It's evident that some of the motivations (utility function factors for us economists) for the estates are not purely monetary or at the very leat short-term moentary. There is relatively little 'agency misalignment'.

That said, though, I do think some of the positive (and negative) aspects are due to the ownership structure (large, concetrated, private). Incidentally, for tax reasons whilke the estates are very much private enterprises, alienation rights are effectively circumscribed (i.e. there is little icnentive to turn a quick buck).

Look forward to mroe comment sonce you've been able to read it through. I DON'T want to re-open that 'orivate cities' thread as such but i do think that there is some itneresting stuff here.

[Gotta Speakup]

What a great article.

Think of the contrast with some of the big land developments in the US such as the Irvine Ranch. In addition, many US railroads once had large land holdings (though they were often more of a checkerboard pattern)

Between this and the Modernism exhibit at the V&A, there is a lot going on to see out there.

One question: there is a reference in the article of a law that make the estates sell their lands to the leaseholders?

GS

[jaws]

In a way this is essentially the same thing I'm proposing, except under my system the leases are permanent and there is no government interference in the regulations (the really destructive aspect of town planning).

The estates successfully overcome the problem of street design by combining several properties under one ownership, but the reality is that people really want to own their own property, and will pay more for ownership than for a 1000 year lease. That means unless developers can keep running streets for profit there will be not be such estates anywhere else.

[Vlaude]

Definately an interesting idea. Looking at it from a control issue it could be kind of cool. If you own a large chunk of ground and have people willing to buy into a type of development without ownership it would be possible to create and maintain some great places. Not sure that mentality would work as well in the U.S. or more westernized cultures. Though a better chance or working in Europe than most places in the U.S. There are pros and cons to ownership of land in a select few hands.

[jaws]

Though a better chance or working in Europe than most places in the U.S. There are pros and cons to ownership of land in a select few hands.

From a practical point of view in the US as well as most of elsewhere the government controls all the land and its development, therefore it's moot what the pros and cons are. There is only one hand controlling everything.

[Vlaude]

From a practical point of view in the US as well as most of elsewhere the government controls all the land and its development, therefore it's moot what the pros and cons are. There is only one hand controlling everything.

Jaws, I disagree. There are still many places in the U.S. where a private developer could have a lot of control. Many Counties have very few planning and land-use regs outside of a City's jurisdiction. That type of location would allow for the owner to have a lot of control over the land and decisions.

[Luca]

Between this and the Modernism exhibit at the V&A, there is a lot going on to see out there.GS

The 'great esttes' exhibition is now over.

One question: there is a reference in the article of a law that make the estates sell their lands to the leaseholders? GS

A series of leasehold reform acts mandate that the lessor agree to discuss a price for extending leases or even for selling the freehold (this is a bit more complicated if the building is multiple occupancy, but not impossible). The price has to be mutually agreed and there is often recourse to non-binding arbitration. In case of disagreement there is a tribunal. AFAIK, it's not typically the case of the landlord getting screwed, if you want a longer lease or the freehold you DO have to pay up.

I used to own an (extended) 125 YR leasehold on an apartment in a building where the freehold was held by the Cadogan Estate. Personally I found them to be rude, inefficient and very liberal with my money when it came to management fees and cost of maintenance, etc. At one point, in order to raise cash for the major Duke of York Headquarters development, they sold the freehold to a pension fund and in that case the tenants have a statutory pre-emption right which was not exercised (about 25% of the lessees were elderly and did not want to incur the expense).

As has been noted, people want to own their own property entirely and it's not surprise that as London expanded and the middle class became more prosperous/independent property became almost exclusively freehold. I now live in a freehold 'semi'. For better-off people, in-town leaseholds also sued to make more sense because many thought of their country house as their real home and the London house was semi-permanent.

Having said all that, if the law provides protection against poor management (increasingly it does), excessive costs (through an inexpensive tribunal) or unreasonable restrictive covenants, I could see leasehold as a reasonable tenancy approach, for instance through lifetime+ leases.

[mendelman]

From my reading of The Baltimore Rowhouse. Most of Balitmore, MD was developed on a land-lease basis (in order to keep development costs lower), and much of it is still held in this manner. Bascially, what exists in London.

I'm not really sure what this has done in Baltimore and what benefits/negatives it has.