Non-compulsory land acquisition, land use regulations and gentrification (original) (raw)

International journal of research in social sciences, 2016

Abstract

The Public Works Act of 1894 enables land to be obtained for public purposes (Wikipedia, the free encyclopedia). Acquisition usually occurs with the landowner'sagreement. If there is no agreement (or the landowner cannot be reached or deceased), the land may be obtained without their agreement (compulsoryland acquisition) (Te Tari Taiwhenua, 2015). Compulsory land acquisition under the Public Work Act is rarely used and can be controversial because it takes away privateproperty rights (Te Tari Taiwahenua, 2005). It is argued that compulsory land acquisition is a legal action which happens with compensation. Compulsory land acquisition is usually considered inefficient and notvery effective because; (1) It is usually profitable for the owners of the high-value properties; (2) there are different basis for determiningcompensation. How the amount of compensation is calculated is also argued and is critical considering the efficiency as well as the fairness of theearning (Ram Singh, 2012). For an eminent domain process to be efficient and fair, information about the costs and benefits should be available. If not, the process will be inefficient. In practice, the price for the compensation consists of the market value of the ownership plus calculating other costs such as displacement costs, disturbance, and sense of attachment. Market value of ownership is usually determined on thebasis of the value of similar land. Although, it is difficult tofind two properties which are exactly the same. Studies show that the actual compensation received by the ownersof the acquired properties is generally different from their market value (Burger and Rohan, 1967), Munch (1976), Bell and Parchomovsky (2007). Ram Singh (2012) writes “when direct and indirect costs and benefits of land transfer are considered together, regulated voluntary transactions are more efficient and faircompared withthe compulsory acquisition under eminent domain”. Recent compulsory land acquisition strategies are based on the compensation infree-market values plus other costs that are compensated. Free-Market systems prefer the non-compulsory methods and without doubt this will continue (Kitay, 1985). This paper presents non-compulsory land acquisition strategies, using land use regulations and their mechanisms.

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