Value and Valuation of Land and Real Estate

Joel Sternfeld, Sweet Earth, 2006.


Value and Valuation of Land and Real Estate

What is the market value of land? How should it be determined? – A workshop by our program Reclaiming Common Wealth


Law requires that takings and socializations of land must be compensated. The German constitution requires compensation as do various instruments of international law. This legal duty of compensation has come to be interpreted widely as the obligation to pay “market value” even though the German constitution does not mention market value, but explicitly only requires that “compensation shall be determined by establishing an equitable balance between the public interest and the interests of those affected.”

The workshop takes the prevalent approach to compensation as a starting point. It asks: What is the market value of land? How should it be determined? It addresses various methods to assess “market value” as well as the failure of the market to properly account for the physical and transitory risks resulting from climate change.

More fundamentally the workshop aims at rethinking the standard of compensation commonly applied in cases of expropriation for the case of socialization. In this respect it asks whether a project that seeks to turn land and real estate held as assets by capital corporations into commons should be subject to the same standard of compensation (fair market value) that is applied in cases when the state is exercising its power of eminent domain and expropriates land e.g. in order to construct a highway.
Workshop participants will inquire into alternative standards for compensation that do not take market value as their benchmark and that are in line with the objective of socialization, namely democratizing land ownership and turning housing real estate into a commons. Such alternative models of compensation can be informed by recent value-critical discussions from public welfare-oriented economics, social science, urban studies and philosophy. They could be based on an assessment of “fair prices” for housing real estate that takes into account the economic distinction between rent and profits, the state’s ability to pay as well as affordable housing costs in relation to tenants’ disposable income. Suitable compensation standards may be found in procedures already established by law, whether in Germany or internationally or by reference to historical projects of nationalization and socialization.

Download the Program here (in german).


This workshop is a closed event. If you have any questions, please contact Katja Schubel. Press inquiries can be made here.

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