3. other, have in regard to the nonsubdivision of the lots, (which has also been complained of as a disadvantage), will have vanished.
I have hitherto considered the sum paid annually to Government by the lessee of each parcel of ground termed rent; but it may be doubted whether it is right to call it by such a name. Land does not necessarily produce any rent, and until its productiveness or unproductiveness, or that of land similar in all respects, has been tested, it cannot be certainly said that it will afford rent. Rent is the surplus produced above the cost of production.
If a person borrows a piece of land belonging to another, builds a house costing £1000, the market rate of interest being five per cent, and the cost of repairs four per cent; and finds a tenant who will pay £120 per year for his house, it is obvious that he cannot afford to pay any ground-rent at all to the owner of the land; though he can afford to pay all that he gets beyond this sum.
But it has been shown that when lands were bought here, no judgment could have been formed as to whether any lot would or would not afford permanent ground-rent; in fact, it turned out that lots for which the highest rentals were bid were not in some instances the most valuable. It was the eagerness of the demand, caused by the circumstances above described, that raised the prices.
Had everyone been permitted to build where he liked, and a rent been afterwards assessed on the lands, the proportional payments would now be very different from what they are. There is a question whether the total sum accruing to Government from rents paid in their present unequal proportions is much less than the sum of the annual rents of all the properties.
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