I dunno. Sounds like a good idea to me. The government owns all the land and rents out 10 year leases to the highest bidder in the case of contention. Currently all that rent-seeking money goes to private individuals who do diddly-squat for the public good. Should society reward sitting on land rights? No, society should award work.
The government owns all the land and rents out 10 year
leases to the highest bidder in the case of contention.
After 10 years the lease comes up for renewal. Car company A wants to renew the lease for another $x. But car company B wants to fuck with their competitors, so they put in a bid for $3x. They know they won't win so they won't have to pay (car company A don't want to lose their $5x factory so they'll have to outbid) - they just want to raise their competitors' expenses.
That happens a few times and all of a sudden nobody wants to build factories any more.
Then you realise the same thing applies to your asshole neighbour's house...
Land with a house on it is worth more than land without a house on it. Land that's been cleaned up is worth more than land that was contaminated in the past.
If, a few years after you increase the land's value, all that extra value goes to the state, why should anyone increase land's value?
With enough of a time buffer between the auction and the transfer this might solve the problem.
A Dutch auction, as mentioned in another comment, is an interesting modification as well.
http://www.gamasutra.com/blogs/RaminShokrizade/20130405/1899...
"In 1977, Joseph Stiglitz showed that under certain conditions, spending by the government on public goods will increase aggregate land rents by an amount equal to government spending on public goods. This result was dubbed by economists the "Henry George Theorem", as it characterizes a situation where Henry George's 'single tax' on land values, is not only efficient, it is also the only tax necessary to finance public expenditures."