I think this argument is wrong. If they don’t sell there is no train (at least not to that exact place), so they gain nothing by pricing the project out of existence or driving it elsewhere.
I want to build a Disneyland resort. There are dozens of different sites I could put it. When I go to a landowner (eg. a farmer) to buy land for my resort they can’t sell it at the value it would have if it were a disneyland, if they try that I drive 10 mins up the road to the next farmer, and eventually one of them will realise that selling the land for a little more than its currently worth to them as a farm is still profit.
This example is no different. If their is one, and only one, place the train could possibly go then yes the person on that land can charge you quite a lot. But still not 100% of what the land will be worth after the train is there, a potential train connection that someone might build in the future is worth a lot less than an actual train connection now. But, realistically, there will be other options for where to put trains and stations. So the owners of the half-dozen best sites have to try and make better (lower) offers than one another.
“Why would the current owner sell the land at the historic price when, in fact, it is very clear that the price will go up once you are done with your project?”—“Why would anyone sell you steel at the market price of steel, when, in fact, it is very clear that the value will go once you are done turning it into an airplane?”
I think this argument is wrong. If they don’t sell there is no train (at least not to that exact place), so they gain nothing by pricing the project out of existence or driving it elsewhere.
I want to build a Disneyland resort. There are dozens of different sites I could put it. When I go to a landowner (eg. a farmer) to buy land for my resort they can’t sell it at the value it would have if it were a disneyland, if they try that I drive 10 mins up the road to the next farmer, and eventually one of them will realise that selling the land for a little more than its currently worth to them as a farm is still profit.
This example is no different. If their is one, and only one, place the train could possibly go then yes the person on that land can charge you quite a lot. But still not 100% of what the land will be worth after the train is there, a potential train connection that someone might build in the future is worth a lot less than an actual train connection now. But, realistically, there will be other options for where to put trains and stations. So the owners of the half-dozen best sites have to try and make better (lower) offers than one another.
“Why would the current owner sell the land at the historic price when, in fact, it is very clear that the price will go up once you are done with your project?”—“Why would anyone sell you steel at the market price of steel, when, in fact, it is very clear that the value will go once you are done turning it into an airplane?”