Presumably the solution to this paradox is that land values are mostly privately held, while public corporations tend to hold other forms of ‘real capital,’ so that rentiers still largely hold real estate, as they did when the term was coined. It would be interesting to learn whether privately held corporations’ holdings are more similar to those of public corporations or natural persons.
That matches my expectation. There was a notable tendency for real estate to be a larger and larger fraction as I moved down the list, so I strongly expect real estate to dominate for smaller companies, and it certainly dominates for individuals. Though that’s “real estate” including both land and buildings; I would still guess that buildings are usually a larger component than land even for private individuals.
That last bit seems wrong to me bc the “good location” premium is so large, e.g. https://www.crackshackormansion.com/. Davis and Palumbo (2006) estimated land value as 50% of residential real estate value, up from 32% in 1984, and home prices in aggregate have continued to rise for the same reasons.
“Land is a minority of capital” is reassuring that this is mostly a summary of accumulated productive tools rather than of rent claims on natural resources rendered valuable by the productive use others can make of them. But it’s in some tension with Gianni La Cava’s claim that the increase in capital’s share of income is largely due to increases in home values.
Presumably the solution to this paradox is that land values are mostly privately held, while public corporations tend to hold other forms of ‘real capital,’ so that rentiers still largely hold real estate, as they did when the term was coined. It would be interesting to learn whether privately held corporations’ holdings are more similar to those of public corporations or natural persons.
That matches my expectation. There was a notable tendency for real estate to be a larger and larger fraction as I moved down the list, so I strongly expect real estate to dominate for smaller companies, and it certainly dominates for individuals. Though that’s “real estate” including both land and buildings; I would still guess that buildings are usually a larger component than land even for private individuals.
That last bit seems wrong to me bc the “good location” premium is so large, e.g. https://www.crackshackormansion.com/. Davis and Palumbo (2006) estimated land value as 50% of residential real estate value, up from 32% in 1984, and home prices in aggregate have continued to rise for the same reasons.