I’m surprised that private neighbourhoods aren’t more common:
A company buys a large plot of land, and build houses, shopping centres schools etc. they rent out the space to households and businesses. Included in the rental fee is services such as garbage collection, maintenance, etc.
In lieu of a police force they have private security which is empowered to terminate the rental contract for problematic individuals and deny people entry to the neighbourhood.
This should be enormously profitable because the land is worth so much more as a neighbourhood than as a Greenfield.
I also imagine it would be far better run than most cities. Poor services bring down rents, so it’ll make sure the streets are always clean. Good transport is essential for success so it’ll operate private busses to nearby urban centres. Etc.
They don’t sell the buildings because then there’s no incentive to provide services/just becomes an ordinary neighbourhood.
I’m not an expert but this sounds like a classical libertarian optimist story, and so there probably exists a decent literature on arguments for and against
Also, it feels like the object-level thing you’re suggesting would violate zoning laws in many cities
Yeah, people already buy houses to rent them, and this seems like just a question of scale, where the scale gives you extra benefits, because a nice neighborhood is better than just a nice home in the average neighborhood.
Thinking about obstacles, building the entire neighborhood would require a lot of capital. And the investment is concentrated at one place, so the plan is fragile… imagine that a gang starts extorting you that either you pay them money, or they will do some shooting in your neighborhood which totally destroys your added value.
And it’s not just gangs. I don’t know how specific this is for Eastern Europe, but you basically cannot build anything without bribing many officials. If you start a project of this magnitude, the size of the bribes will skyrocket, because now any bureaucrat can hold your billion-dollar project hostage.
Buying a large continuous area of land is probably also difficult. Unless it is in the middle of nowhere, in which case the problem with your nice neighborhood is that people need to get to their jobs.
None of this seems like a problem in principle, but add too many problems like this, and suddenly there are better opportunities to spend the same capital elsewhere.
I’m surprised that private neighbourhoods aren’t more common:
A company buys a large plot of land, and build houses, shopping centres schools etc. they rent out the space to households and businesses. Included in the rental fee is services such as garbage collection, maintenance, etc.
In lieu of a police force they have private security which is empowered to terminate the rental contract for problematic individuals and deny people entry to the neighbourhood.
This should be enormously profitable because the land is worth so much more as a neighbourhood than as a Greenfield.
I also imagine it would be far better run than most cities. Poor services bring down rents, so it’ll make sure the streets are always clean. Good transport is essential for success so it’ll operate private busses to nearby urban centres. Etc.
They don’t sell the buildings because then there’s no incentive to provide services/just becomes an ordinary neighbourhood.
I’m not an expert but this sounds like a classical libertarian optimist story, and so there probably exists a decent literature on arguments for and against
Also, it feels like the object-level thing you’re suggesting would violate zoning laws in many cities
Yeah, people already buy houses to rent them, and this seems like just a question of scale, where the scale gives you extra benefits, because a nice neighborhood is better than just a nice home in the average neighborhood.
Thinking about obstacles, building the entire neighborhood would require a lot of capital. And the investment is concentrated at one place, so the plan is fragile… imagine that a gang starts extorting you that either you pay them money, or they will do some shooting in your neighborhood which totally destroys your added value.
And it’s not just gangs. I don’t know how specific this is for Eastern Europe, but you basically cannot build anything without bribing many officials. If you start a project of this magnitude, the size of the bribes will skyrocket, because now any bureaucrat can hold your billion-dollar project hostage.
Buying a large continuous area of land is probably also difficult. Unless it is in the middle of nowhere, in which case the problem with your nice neighborhood is that people need to get to their jobs.
None of this seems like a problem in principle, but add too many problems like this, and suddenly there are better opportunities to spend the same capital elsewhere.
Isn’t this somewhat similar to company towns like Jamshedpur, minus perhaps the Police force?