The newt-lover has an idea

Mayor of London Ken Livingstone has a new idea to solve the “affordable housing” problem.  He proposes that the GLC should make available tracts of land which would be held in perpetuity by a “Public Land Trust”.  Houses would be built, and the prices would be based on construction costs excluding land, so the houses would be affordable, and they would stay cheap because the Trust would always own the land.
But there’s a snag.  If the houses get full use of the land (without owning it), then it’s as good as freehold, and prices will revert to market prices.  The free land will only benefit the first buyer, who will make a killing when he sells.  If on the other hand the resale prices are controlled, there will be queues all the way to Marble Arch whenever one of these houses comes up for sale, and we shall be back to the odious spectacle of public officials allocating houses to the deserving poor.  So Ken’s new model collapses, and defaults to the two existing models of (A) free market; and (B) Council Housing.
There is nothing new under the sun.  Least of all the economic naïveté of socialists trying to meddle in markets.

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