What Causes Land Scarcity?

Land scarcity can be caused by factors like population pressures, social inequality, and environmental issues. It’s also possible for a market to create the perception that available land is scarce when this is not actually the case, which can contribute to the inflation of a real estate bubble. People concerned about availability of land might attempt to buy at any price, driving up prices and creating speculative inflation. Analysis of situations where land appears to be scarce may include an exploration of several potential factors to determine what can be done to address the issue.

Population pressures are one concern. Growing numbers of people need more land to live on and support farming to feed them. Human populations can also migrate, which can contribute to land scarcity. Refugees may be driven off traditional lands, for example, requiring rehoming, but there may be nowhere for them to settle as a group. This can create tensions that have more to do with the distribution of land than the actual amount of land available.

Changes in how people use land can also add to land scarcity. Suburban dwellers might expect larger, more remote lots, for example, which eats into formerly unused land. Farming techniques can shift over time, adding to land scarcity by requiring more acreage for agricultural activities. Even changes in diet can play a role; if more people demand meat, for instance, more land will need to be dedicated to raising animals, which is less efficient than producing many vegetable and fruit crops.

Another contributor is social inequality. People with limited income and assets may not be able to afford land, especially in a rising economy. In this case, land may be available, but inaccessible to many, creating a sensation of land scarcity. Wealthier individuals may also hold a disproportionate amount of available land, which makes it hard to buy into real estate for people with limited resources.

The environment may play a role as well. In many regions, land is protected for farming and environmental preserves. This can contribute to land scarcity by locking up supplies of potentially usable land. There may be social benefits to this, such as ensuring that countries can produce enough food, or preserving natural heritage. Policy makers may need to balance the benefits and risks of these practices to decide how and where to conserve land while considering the best interests of the population.