Value switching: Extracting profit from the city

Abstract

Land and property, and the wealth extracted from it, has reappeared as a central concern in understanding the process of urbanisation under capitalism. Much of the academic discussion centres on the re-emergence of ‘rentier capitalism’ drawing on 19th-century concepts of land economics. However, the accumulation of wealth through property ownership and the development process points towards a value proposition contained in the land question that is not satisfactorily explained by notions of ‘rent’ or ‘rentier’ capitalism, rooted as they are on 19th-century concepts of the land development process. This article seeks to extend this debate by exploring multiple regimes of value that underpin the contemporary urban development process. The first part of the article maps out four intersecting regimes of land value, before arguing by reference to empirical analysis of land and property sales data in Sydney Australia that switching between these value regimes – value switching – is a key transformative moment in the urban development process. Specifically, this article argues that value switching, as triggered by the land use planning process, has become the key driver of urban development dynamics and adds a further dimension to theories on land and housing development in the financialised city.