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Tuesday, January 19, 2010

Eminently Feasible

Can't build a private road? Why not?

Okay, let’s come back to reality. Consider the fact that successful developers are not idiots. No businessman with this little planning ability would ever be trusted with the millions necessary for such a project. On a free market, a typical developer would ensure (before spending millions on purchases) his ability to acquire the entire right-of-way for a reasonable price. How? One approach would make use of option contracts. In an option contract, a landowner agrees to sell his parcel of property for $X, but only if the developer can reach agreements with other owners permitting acquisition of the entire right-of-way for a reasonable price (that is, a price that will allow a profit). What’s more, a smart developer would be working on one or more alternative routes, to encourage price competition among landowners. No single landowner would be able to jack up his asking price arbitrarily, because the developer would never put himself in a position where he had to pay a price so high that profit became impossible.

A little bit of creative thinking and the statist argument falls apart.

Posted by Richard Anderson on January 19, 2010 | Permalink


PUBLIUS, excellent! It is difficult to imagine how we could do something differently as we are comparing something we see with something we don't see. Yet humans have proven to be very creative time and again and I have full faith that a way would be found. The solution described about is one example of that.

Posted by: TM | 2010-01-19 9:18:38 AM


I agree. The usual suspects will say you can't prove it therefore it is ridiculous to believe we'd be better off.

Posted by: Charles | 2010-01-19 9:39:40 AM

All true. Plus I could see a landowner agreeing to a small stake in the business too as a part of the sale.

Posted by: Floyd Looney | 2010-01-19 9:55:33 AM

The Tom bowden piece is interesting especially when you have some understanding of what an unforgiving juggernaut the DOT is, aied by the NRC and the TRD's 5000 scholarly scientists.
The one great thing about the TRD who figures out what is feasable in regards to transportation, is they always leave room for phenomena to be part of measurement. If a great case could be made, possibly this could be a reality.
The only probelm with fragmented ownership is all the pitfalls of ownership, cash flow, investment agenda, and of course, governeing body for road standards which creates new problems etc.

I understood perfectly what Mr. Bowden was philosiphising about, and even though I am currently in a

Posted by: Vegan Phil | 2010-01-19 10:54:48 AM

I don't think that privatized roads would cause as many problems as some think. For the most part, developed nations like the U.S. and Canada already have plenty of roads. What we need to think about is selling off the ones we have now and turning them into profit-generating toll roads.

Posted by: Dennis | 2010-01-19 12:08:29 PM

off the ones we have now and turning them into profit-generating toll roads.

Posted by: Dennis | 2010-01-19 12:08:29 PM

We seem to forget that OUR taxes paid for the roads in the first place. Approx. 43% on a gallon of gas is taxes, which was supposed to go for road maintenance, highway building and general transportation related repairs. There are billions of dollars that have been diverted from highways to general revenue.....better known as the pork barrel. No matter how much we give them, it will never be enough unless they use it for the purpose intended. Tolls my ass.

Posted by: peterj | 2010-01-21 9:30:28 PM

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