Why is Bond Street so expensive?

At Critical Thinking we're revisiting the issue of land value and how it is created. A London centric online newsletter, londonlovesbussines.com ran a piece announcing that Bond Street is the most expensive street in Europe with annual rents up to £838 per square foot per annum (which equates to $15,138 per square metre). That compares with Bahnhofstrasse in Zurich, the next most expensive street, with annual rents of £599 per square foot.

£838 per square foot a year: Bond Street is the most expensive street in Europe By Shruti Tripathi

The question is: how is value created and to whom does it belong?

The simple answer is that the "price" or rent (not synonymous with value) is determined by supply and demand which is undoubtedly true. Landlords will charge the maximum they can get away with. But what underpins the demand? If one considers the shops on Bond Street, their value is the accumulated spending power of shoppers who like to shop there because of the cachet and perceived status of buying luxury brands in exclusive sales spaces. That demand is created by the tenant shopkeepers who cumulatively make the street a desirable location.

One luxury shop attracts wealthy customers, other luxury brand tenants rent adjacent properties forming a cluster of such shops, thereby attracting yet more expensive retailers, restaurateurs etc. to the street. In addition, the shoppers themselves create value by their presence, particularly in this celebrity conscious age (which begs the question, who creates the value of a celebrity "brand"?). There is also the significant value created communally by the surrounding area and infrastructure, much of which is publicly funded. Consequently, the value of Bond Street is not merely created by demand for the shops themselves but by the cumulative efforts, desires and resources of the community.

The land (like other Commons such as resources, knowledge, the human genome, the radio spectrum, energy) originally belonged to no-one but conquest and subsequent legalisation of the theft of land from the commons means it is now owned by those who played the system, acquiring more and more land and growing ever richer as a consequence.

So to whom does the value of Bond Street belong? The community, represented by landlords, tenants, shoppers, local residents, taxpayers and citizens who contribute to the infrastructure, amenity and culture of London. Sharing the value of land is the only fair and honest means of distribution.

Fred Harrison, who has been researching and promoting the work of Henry George for over 40 years, has put together 10 theses which challenge the fundamental basis of our economic system.

Share the rents by Fred Harrison

"The West shaped a global civilisation whose operating mechanism is a culture of greed. Societies are regulated by a statecraft that is incapable of adopting the policies needed to challenge the existential crises of the 21st century. Financial mechanisms that would enrich people’s lives are politically taboo. Democracy must be reconceived as a therapeutic process, empowering people to escape the trauma inflicted when their ancestors were ruptured from authentic cultures and natural habitats."

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