Georgist, quoting Churchill circa 1909: "LAND MONOPOLY is not the only monopoly, but it is by far the greatest of monopolies -- it is a perpetual monopoly, and it is the mother of all other forms of monopoly."
Home-Owner-Ist or Faux Libertarian: "Not it's not. There are billions of landowners all over the world. Anybody can buy land. You can choose between dozens of landlords in an area."
These people aren't interested in listening to the explanation, but here it is anyway...
There is a fixed amount of land, you can't increase the surface area of a planet, no matter how much you build or how many swamps you drain. It is land itself that is the monopoly. For sure, it has been sub-divided and there are more small landowners than large landowners, but that does not change anything.
Let's agree that water companies have a monopoly on mains water supply (in their region). The fact that many water companies are quoted on the stock exchange and have zillions of shareholders does not change that. However many shareholders they have, that doesn't change the prices which consumers have to pay.
[As an aside, water prices are thankfully capped by the government at enough to give them handsome profit margins (but still at much lower than whatever the profit maximising price would be). In this case, capping prices does not reduce supply. Profit per consumer is fixed, so to maximise profits, the water companies just want to supply water to as many consumers as possible (provided the income covers the marginal costs). Stick that in your pipe and smoke it, Faux Lib's!].
Or we could cycle back a few centuries to when all the land in an area was owned by a descendant of a violent thief (i.e. an 'aristocrat' as they like to call themselves). He was clearly a monopolist and charged as much rent as he could get away with. By today, his descendants will have sold off small areas for development, which have since become very valuable, but they still owns lots of fields around the towns that have grown up.
Along comes our developer, looking for a greenfield site near the town. Some of the land is owned by a few small farmers and the bulk is still owned by one of the original thief's distant descendants. The small famers will demand the same price per acre as the 'monopolist'. Sub-division has not helped the potential buyer.
Or maybe the thief's descendants retained some of the land in the growing towns and built their own housing there to be rented out (or sold on long leaseholds). If you are looking to buy or rent, the price or rent you will have to pay to the sellers or landlords who own a single unit will be exactly the same as the price demanded by the original monopolist who owns all the housing across the road.
Another indicator that land is a monopoly is that in a monopoly, the price is set by demand and bears no relation to costs of production (the cost of producing land is precisely zero, or course). The monopolist can maximise his profits by restricting supply/pushing up prices so that his marginal revenue = his marginal costs. At the margin, land bankers home builders do exactly this, they just drip new housing onto the market so slowly that selling prices are not depressed. If selling prices fall (i.e. after every 'financial crisis'), they just mothball their projects for a couple of years. They'd be daft to complete and sell a house for £160,000 today if they know they will be able to complete and sell it for £200,000 in a year or two.
[Which also pours cold water on the idea that more generous planning rules = more construction = lower prices. Lower prices = less construction. It is self-limiting.]
With land and housing, supply is fixed in the medium term and so price is set purely by demand, which is entirely beyond the control of most landowners. Local factory shuts down? Less demand, lower prices. A new station or road is opened? More demand, higher prices. In truth, you aren't really paying for the land, you are paying for the bundle of local amenities which you can easily access from any particular plot, which is why houses with big back gardens don't sell for noticeably more than houses with small back gardens. The amenity value of a few extra square yards to store an unused trampoline and a rusty lawnmower is a tiny fraction of the amenity value of a well-paid job within an easy commuting distance.
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