Who profits from development, and why?

In Toronto, we are (or are not) about to expand our subway lines. The result will be a development bonanza for those owning and developing lands above and near the new transit routes.

In a dictatorship, the government could expropriate all the land in the immediate proximity of such a major infrastructure investment. The present users could be allowed to rent, at reasonable rates. Then as the infrastructure project proceeds, the government could sell the improved land, one strategic development at a time.

I suspect this could come close to paying for some of our subway extensions.

Instead, we announce (often years ahead) our intentions. We borrow and tax to fund the infrastructure. Developers profit from values that were created by others – your tax dollars.

Why do we do it this way? Who really benefits?

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