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Comment by jimnotgym | Hacker News Reader

> Then we tried finding factory space in Colorado. That was much harder than expected and it took a full year.

This is amongst the things stacked against people trying to do business in the UK. I know a distributor that wanted a small warehouse with office space. They had the capital to buy and build. But in the ex- industrial that land of the UK no land could be found, despite the acres of tumble down old factories! There is a government controlled project for anyone wanting to build a huge factory, but nothing smaller.

One of the problems in the UK is land-banking and a tax system that encourages you to invest in land and leave it as wasteground.

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I've experienced the same for office space in two countries. A kindly and clueful real-estate person eventually explained that small deals aren't worthwhile, sorry about that, no insult intended.

We are talking $70-80k a year in rent... But judging by the enormous warehouses down the road, only running a supermarket distribution hub is viable.

They were likely working for proximity to some location, or on price. Large city centers are the only really constrained spaces in the US. Most places have land available that comes with tax benefits for businesses.

In my example it was proximity as in 'same city' and price was not the limiting factor. No-one would sell the land. Of course in the US you have a lot more land to go at!

> UK is land-banking and a tax system that encourages you to invest in land and leave it as wasteground.

How and why does that work?

A good summary: https://www.theguardian.com/cities/2017/jan/31/britain-land-...

The Guardian argues that it's effectively cartelisation of building land by restricting the rate of building. There is a discussion of whether or not planning permission is a limiting factor - I think this is the main reason why you get almost no individual building in the UK, it's a lot of work to get the approvals so it's only worth doing on a big site for lots of houses.

There's no regular tax on unused land, and there is a tax on selling it, so there's a big incentive to just sit on it. I'd much rather see those two positions reversed. Not to mention the whole pseudo-property-tax system for funding local government needs drastic reform.

I wouldn't trust the Guardian alone.

Do you have another source you could share with us?

Which information in the linked article was incorrect?

The ironic thing is that land bankers appear to do a useful service in that context - they go through the approval to 'process' the input land into something more valuable - land that is preapproved to build on. Of course that it is so valuable is in itself symptomatic of a larger dysfunction. In a more functioning system it should give far more modest returns since developers would have an option to do it themselves and cut out the middleman. It suggests that the process should be far more streamlined if possible and more broad in use permission categories when possible.

There are valid discussions to be had and due diligence involved in investigating the fitness of land for given purposes - it is more appropriate to use a heavy metal contaminated site for a garbage dump or factory than farm or residential for instance and industrial processes at risk of explosion shouldn't be kept near residences and schools.

I could see unused land being a tax break having some utility if there is some positive externality to it - especially if left accessible. Say that if you have some woods at the fringe of your property you could get some degree of property tax relief since keeping some wilderness does larger service to the environment. A derlict brownfield site however should have no bonus - it serves society best to get rid of it as soon as practical. This tax-break land could be developed if it is more lucrative to buy it and do so. The two could combine in a form of urban renewal incentives by at least encouraging landowners to clean up after themselves by transforming abandoned buildings to greenfield or parkland for tax purposes.

That is a good summary.

In terms of commercial property, in the UK a landlord will have to pay property rates on an empty factory or office related to a theoretical rental value. If you take a piece of wasteground and build a skyscraper on it you will be liable for the rates on all of the offices you can't rent out. This means developing comes with a risk.

This in my view is a good arguement for Land Value Tax, where you would be paying an amount based on the unimproved value of the land. If you put the land to good use you are not penalised.

A lot of commercial property in my part of the UK is owned by the Regional Development Agency, which are EU funded bodies that help regions attract investment. This would seem to suggest that the commercial realities of owning a warehouse are tough.

Yep people often blame wages as the reason company off shore manufacturing and other jobs. Wage however are only a small factor

Government Bureaucracy and red tape is more often the cause than anything else.

There isn't that much red tape in the UK - it's a myth that there is.

> This is amongst the things stacked against people trying to do business in the UK

And yet the UK is generally thought to be far friendlier to business than say, France or Germany, isn't it? I know that when I set up a business in the UK it took a few days and cost a couple of hundred quid, which compares pretty well to many other countries, as I understand it.

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