Abstract

The Housing Problem, Urban Land Rent and Land Speculation. An Outline in the History of Economic Theories

The article deals with the development of the theoretical analysis of the causes of the housing problem in the German literature since the second half of the 19th century. First attempts by Knies, Faucher, Sax and Engel resulted in a comparatively advanced theory of the housing market. After two decades of theoretical stagnation, the analysis was strongly influenced by the land reform movement (George, Adolph Wagner, Eberstadt, P. Voigt) which in turn was based on Adam Smith’s monopoly approach to the rent problem: high rents of urban land are the result of land speculation, which causes high land prices and bad housing. During the first decade of the 20th century, the theoretical background of the land reform movement (especially the speculation theory of the housing problem), was successfully attacked on the basis of Ricardo’s rent theory (A. Voigt, Adolf Weber, Jolles, von Wieser). The housing market approach was resumed, but the first results did hardly exceed those of Knies, Faucher etc. Little theoretical progress has been made since the First World War. Present German discussion on urban economic problems is still based on Smith’s monopoly approach as used by the landreform movement at the turn of the 19th and the 20th century