That still doesn't answer the question "Why would I pay to improve the land if next year someone can simply outbid me and take the land off me?". Why wouldn't this world's Blackrock swoop in the instant a profitable lease comes up for auction?
> Why would I pay to improve the land if next year someone can simply outbid me and take the land off me?
You wouldn't pay. The building would be financed by debt and the debt would be attached to the land. You'd only pay the interest on that debt for as long as you maintain the lease on the land.
> Why wouldn't this world's Blackrock swoop in the instant a profitable lease comes up for auction?
Two reasons: Firstly, Blackrock could hypothetically do this in real life but they don't because they don't have the money. And secondly, from an ideological perspective they would have no motivation to. You are still thinking in terms of "owning land" and the idea that it's better to own more land. Under the new system, you can't own land, only rent it. Hence you want to minimise the amount of land you are leasing. If Blackrock gets the lease, they will lose money on the down payment, then lose money on the rent unless they can find something productive to do with the land. Any business they set up won't be competitive as they'll be paying more in rent than the surrounding businesses. Overpaying on rent is a strictly money-losing affair.
Even if I don't pay in money, I have to pay in time and effort. Does the bank lend me that too? Furthermore, no Blackrock cannot do this in real life because in real life you are not0 _required_ to sell a thing to anyone.
Let me outline this simple hypothetical
I lease a plot of land with a parking lot on it. I spend a year of my time building a quadplex on it, financed by a loan, and get tenants in. After all my expenses, I am making 10k a month in profit! Next year rolls around, tell me what stops Blackrock from taking the lease by offering the value of the lease+9.5k per month and making their money in quantity? Down payment doesn't matter because they have so much more in assets than me that they can make use of a plot of land that generates less profit than I need to live on.
Well then Blackrock would only make $500/month in profit. This is good, you found an actor willing to pay higher taxes for the same land and thus contribute more to the public purse.
The issue is that the value for all land in all cases trends towards zero. If you start making a profit you have to give the government all or most of it, if you lose money you just abandon the plot since the debt isn't attached to you. There's zero reason to ever do anything.
