12th June 2003
This is a submission from Feasta, the Foundation for the Economics of Sustainability on the issues of property rights within the Irish constitution.
Change to the Constitution re property rights is not legally necessary for social equity and sustainability. All the powers required reside in the current provisions — if broadly interpreted and fully and fairly utilised. A debate to reinforce important principles and dispel misunderstanding is more necessary that an amendment.
1. Sustainability is an important element of the ‘common good’.
An amendment to the constitution could usefully include the explicit inclusion of aims relating to sustainability i.e. intergenerational equity and the protection of the environment over the long term, the need for which was which was not as apparent to the original draftsmen as it to us today as we reach the limits of global exploitation.
2. Failure of the Old ‘Property Ownership Rights’ model
The ownership rights model of property utterly fails to incorporate an understanding of property rights as inherently limited both by the property rights of others and by public policies designed to ensure that property rights are exercised in a manner compatible with the common good as enunciated in the Constitution. Derived from Roman/Norman concepts, the ownership rights model has a built-in bias towards greater inequality of power relations and concentration of wealth.
3. Usefulness of a Social Relations Model of Property
A better concept of property is that of a set of social relations; – a system composed of entitlements which shape and are shaped by social relationships. Such a concept can better frame distributive issues that should enter our decisions about the initial allocation of property rights, as well as their definition and limitation over time. A number of reasons warrant this new model not least that it accords better with the older Gaelic concept of property in land as inseparable from the people of the land (tuath = tuatha).
4.The intrinsic difference between Natural and Man-made Capital or Property.
The phrase ‘the right to private property’ in the Constitution does not recognise the fundamental differences within classes of property — in particular that between property in natural and man-made capital.
5. A Common Share in Natural Capital arises from Human Consciousness
The provisions relating to ‘private property’ and the ‘common good’ in the constitution is insufficient to describe the complex relations between private rights and community rights in natural property. In particular, the concept of common share arises in all property in natural capital even before the use rights are constrained by the common good.
6. Common Share in Natural Capital arises from Value Added by the Community
The second community claim to an interest in property in natural capital comes from value added by the community at national and local level. Most if not all value in natural property depends on and is derived from community need and investment. This is very clear in the case of land, which is fixed in location and limited in supply. Land in a remote area with no infrastructure and low population is of much lower value than that in a populous area with adjacent infrastructure and convenient services.
7. The community’s Common Share of natural resources should be collected through various Annual Land Value Taxes in the case of land, and appropriate user charges, taxes and royalties in the case of other natural resources.
The fundamental cause of the problems that have prompted this review of the constitution is the failure to recognise the interests of the community sufficiently in property in land and other natural resources. Feasta holds that this common share of natural capital in land should be recognised in an annual rent or tax paid by the landowner to the community as part of a ‘tax shift’ from income taxes.
9. Compulsory Purchase
Compulsory Purchase should be an instrument of last resort to deliver essential infrastructure development or environmental protection for the common good and sustainability. Compulsory purchase is intrinsically difficult to apply consistently and as such is not appropriate as a general instrument to deliver affordable housing or sustainable settlement development. When a justifiable case can be made for CPOs, compensation should be for existing value and use only but should also include a sum in recognition of compulsion.
10. The Zoning of Land
The zoning of land for development is necessary for efficient infrastructure provision and the development of sustainable compact settlements. Zoning, infrastructure provision and planning permission add considerable value to land. This value should be recouped on behalf of the community that created it by an annual site value tax on designation or permission.
11. The Price of Development Land
The price of development land, unacceptably and unsustainably high in the Irish market, is a direct result of the current property system that fails to recognise the fixed nature of land and the common share in the social relations governing property in land. This can be addressed even under the current provisions of the constitution by means of an annual site value tax.
12. The Right to Shelter
The right to a common share of the National natural resources is a fundamental universal right based on the individual existence. It implies a right to shelter irrespective of need which is a stronger and less divisive than a simple ‘right to shelter’ with its concomitant risk of moral hazard and lack of limits. The lack of good affordable housing in sustainable integrated settlements is caused by the nature of the current property ownership system that does not fully recognise common share in natural resources .
13. Infrastructure Development
Infrastructure Development by the local and central government is necessary for well-planed, efficient and sustainable development. That it generally benefits the common good is not sufficient reason to fail to recoup the very significant gains by private landowners as part of common share arising from such community investment.
14. House Prices
House prices and rent levels in the private rented sector are a continuing cause of concern in terms of social and intergenerational inequity. Demand side measures such as a community land tax on all property owners as part of a tax shift from income taxes to dampen price and rent inflation are now inescapable.
15. Access to the Countryside
The controversies around access to the countryside for recreation arise from the fundamental misunderstanding of property rights described earlier. Given the history of the land struggle in Ireland and high subsidisation of farming, the social relations model of property rights suggests that public access rights to uncultivated farmland be recognised in the constitution both through the common share and common good concepts. In addition, a community land tax on farmland would provide an effective framework for sustainable agriculture and rural regeneration.
Note: Feasta is a forum for exchanging ideas. By posting on its site Feasta agrees that the ideas expressed by authors are worthy of consideration. However, there is no one ‘Feasta line’. The views of the article do not necessarily represent the views of all Feasta members.