This article explains a lot of why proximity — often mislabeled as “location” — matters.
These trading floors are in the most expensive cities in the world — New York, London, Paris, Tokyo — and yet in the midst of the convulsions of 2020, they increased their footprint. They understand the value of proximity, of location, far better than the cities where they work. The value of land is created by the activity on and around it: the land under Wall Street supports an enormous amount of economic activity, none of which involves plowing or harvesting. But is New York rewarded for that wealth through a tax on that land, recapturing that value for those who helped create it, from the traders themselves to the baristas and tailors and chefs who make life complete?
We used to hear a lot about The Creative Class, all these people who are going to revitalize cities through creative work — film, TV, writing, advertising — rather than manufacturing or extraction. It was like magic, all those highly-paid, discerning people raising the standards of small to medium cities that needed a boost. But did anyone ever wonder how that value would be recouped, how a city that fostered that kind of creative environment, either investing in infrastructure or writing policy, would get rewarded? Or was it just a lot of headlines, followed by gentrification, until the next up-and-coming city put out the welcome mat, the usual boom/bust cycle?
Location has value. The investment in infrastructure and services that lures busineses to cities needs to be paid for and a well-designed ground rent/land value tax could do it.