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It can happend when towns grow quickly and the city sell the parcels for a significant amount of money. In Denmark parcels are often sold for $50-100.000 in po

It can happend when towns grow quickly and the city sell the parcels for a significant amount of money. In Denmark parcels are often sold for $50-100.000 in popular areas. This gives the town a significant amount of one-shot money. If they use that one-shot money for running expenses rather than investments (in e.g. subways), then the town will go bankrupt when there are no new buyers of parcels. It's somewhat like a ponzi scheme.

throw0101a 6y ago
> If they use that one-shot money for running expenses rather than investments (in e.g. subways), then the town will go bankrupt when there are no new buyers of parcels. This is what happened to Mississauga, Canada (a suburb of Toronto): for the last fifty years builders had to pay developer charges which was used to build the initial infrastructure. However things were constructed in a typical North American, car-centric fashion. Now that most of the available land is covered in large-plot, low-density housing, they kind of realized the money train has reached its destination and they now have to maintain all of this infrastructure. The same mayor (Hazel McCallion) was re-elected over and over for forty years, and so the same kind of thinking was perpetuated over that time period because no fresh thinking was introduced and things basically ran on inertia. She is often labelled the "Queen of Sprawl". * https://www.theglobeandmail.com/news/toronto/how-hazel-mccallion-learned-a-thing-or-two-about-sprawl/article21412631/ https://www.theglobeandmail.com/news/toronto/how-hazel-mccal... * https://archive.is/DpKKp https://archive.is/DpKKp There are of course some plots left, and over the past few years they've been building medium-density townhomes, as well as more and more mid- and high-rise towers. * https://www.insauga.com/is-hazel-mccallion-wrong-on-this-huge-issue-in-mississauga https://www.insauga.com/is-hazel-mccallion-wrong-on-this-hug... * https://torontostoreys.com/issue-of-the-year-mississauga/ https://torontostoreys.com/issue-of-the-year-mississauga/
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legulere 6y ago
I'm from Germany, 50k seems pretty low for a plot of land. You already pay more like 100k already in the countryside. And then the commune doesn't really make a profit (if they didn't own the land beforehand).
- zajio1am 6y ago
  Comparing parcel prices when parcel sizes are not specified seems meaningless to me.
  - bdauvergne 6y ago
    Land is more expensive in Europe, that's a fact; EEA[1] has more than 500 million people for a size half of the USA, and as much relief and less plains: Scandinavia is just a big mountain, the Alps severely limit the possibility of cheap transportation in the middle of it, and UK the main economic powerhouse with Germany and France is an island not even connected to the continent where 50% of everything is around London. Also not enough waterways rely the economic regions apart from around Germany. Yeah subway and infrastructure cost less but everything else is costlier. [1]: https://en.wikipedia.org/wiki/European_Economic_Area https://en.wikipedia.org/wiki/European_Economic_Area
    - inglor_cz 6y ago
      Scandinavia as a whole is not a big mountain. Did you mean Norway? B/C Sweden only has some mountains in the sparsely uninhabited borderlands and Denmark + Finland are basically flat.
    - apexalpha 6y ago
      FWIW the UK is connected via a rail tunnel to France. But most goods are transported via cargo ship and most people via planes, so how much does it really matter? Furthermore, the US might have more land but they also have other challenges that Europe doesn't have, such as huge cities in dessert area, tornadoes, and no internal waterways from east to west (need the panama canal). There's pro's and con's to the land on both sides of the Atlantic. But it seems far from a decisive factor in the wealth of our nations.

throw0101a 6y ago

> If they use that one-shot money for running expenses rather than investments (in e.g. subways), then the town will go bankrupt when there are no new buyers of parcels. This is what happened to Mississauga, Canada (a suburb of Toronto): for the last fifty years builders had to pay developer charges which was used to build the initial infrastructure. However things were constructed in a typical North American, car-centric fashion. Now that most of the available land is covered in large-plot, low-density housing, they kind of realized the money train has reached its destination and they now have to maintain all of this infrastructure. The same mayor (Hazel McCallion) was re-elected over and over for forty years, and so the same kind of thinking was perpetuated over that time period because no fresh thinking was introduced and things basically ran on inertia. She is often labelled the "Queen of Sprawl". * https://www.theglobeandmail.com/news/toronto/how-hazel-mccallion-learned-a-thing-or-two-about-sprawl/article21412631/ https://www.theglobeandmail.com/news/toronto/how-hazel-mccal... * https://archive.is/DpKKp https://archive.is/DpKKp There are of course some plots left, and over the past few years they've been building medium-density townhomes, as well as more and more mid- and high-rise towers. * https://www.insauga.com/is-hazel-mccallion-wrong-on-this-huge-issue-in-mississauga https://www.insauga.com/is-hazel-mccallion-wrong-on-this-hug... * https://torontostoreys.com/issue-of-the-year-mississauga/ https://torontostoreys.com/issue-of-the-year-mississauga/

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legulere 6y ago

I'm from Germany, 50k seems pretty low for a plot of land. You already pay more like 100k already in the countryside. And then the commune doesn't really make a profit (if they didn't own the land beforehand).

zajio1am 6y ago
Comparing parcel prices when parcel sizes are not specified seems meaningless to me.
- bdauvergne 6y ago
  Land is more expensive in Europe, that's a fact; EEA[1] has more than 500 million people for a size half of the USA, and as much relief and less plains: Scandinavia is just a big mountain, the Alps severely limit the possibility of cheap transportation in the middle of it, and UK the main economic powerhouse with Germany and France is an island not even connected to the continent where 50% of everything is around London. Also not enough waterways rely the economic regions apart from around Germany. Yeah subway and infrastructure cost less but everything else is costlier. [1]: https://en.wikipedia.org/wiki/European_Economic_Area https://en.wikipedia.org/wiki/European_Economic_Area
  - inglor_cz 6y ago
    Scandinavia as a whole is not a big mountain. Did you mean Norway? B/C Sweden only has some mountains in the sparsely uninhabited borderlands and Denmark + Finland are basically flat.
  - apexalpha 6y ago
    FWIW the UK is connected via a rail tunnel to France. But most goods are transported via cargo ship and most people via planes, so how much does it really matter? Furthermore, the US might have more land but they also have other challenges that Europe doesn't have, such as huge cities in dessert area, tornadoes, and no internal waterways from east to west (need the panama canal). There's pro's and con's to the land on both sides of the Atlantic. But it seems far from a decisive factor in the wealth of our nations.