What is Land Blocking?
Land blocking is a business practice which involves strategic purchasing of land with the specific purpose of preventing rivals from using that land. Typically, land blocking is characterized by carefully distributed purchases of key pieces of land, and a failure to develop that land once it has been purchased. Laws about land blocking vary, depending on the nation. In many cases it is perfectly legal, but in some countries, it is viewed as a form of monopoly.
Because land blocking requires a lot of money, it is typically carried out by very large companies. For example, a department store chain might decide to build a new store in Anytown, Germany, and in the process of purchasing land for its store, it would also buy land in the surrounding area to prevent rivals from opening up. Stealthy companies might use fronts for their land blocking purchases so that their intentions are not readily apparent.
This practice is viewed as harmful by some people for several reasons. The first reason is that it is designed to eliminate competition, and many economists and other experts feel that competition is healthy and in fact necessary for business. In a functioning economy, consumers have a range of options to choose from, and companies must come up with innovative ways to appeal to their potential customers. Land blocking eliminates consumer choice, allowing one company to profit at the expense of others.
Land blocking can also be harmful to struggling communities. Because the company does not develop the land it purchases, it creates empty lots, which can in turn generate a blight. Property values in regions with empty lots tend to decline, and empty lots are a breeding ground for a variety of problems, from gang activity to public health risks such as discarded needles. Smart companies find some use for the land they buy up when they practice land blocking so that they appease the community while achieving their business goals.
Local developers and firms may also use land blocking as a strategy to force foreign developers and other outside agencies to cooperate with them. By purchasing critical pieces of land in an area which could be targeted by developers, members of a community can gain leverage, ensuring that they are involved in any plans for development. This type of land blocking can also be quite profitable for savvy investors if they happen to buy land in the right spot.
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