User:Rcniles/sandbox

SubsteadingSubsteading is the act of homesteading unused underground space to build new transportation corridors, utility networks, and other projects. The concept was first described in the 2021 report Substeading: A Profitable Way to Build More Affordable, Convenient, and Prosperous Cities by Turning Underground Wasteland into New Transportation Corridors, published by transportation executive Kyle M. Kirshling and economist Raymond C. Niles.

The principle of substeading is inspired by the U.S. Homestead Act of 1862, which opened up millions of acres of land across the Great Plains for farming as privately-owned homesteads. The U.S. government, which originally held the land as a public commons, established a legal framework whereby individuals could obtain title to the land by agreeing to put it to productive use by farming it. Homesteading recognizes the moral/ethical principle that private ownership of property entails to the person who first puts it to productive use, a principle established in the 17th century by natural rights philosopher John Locke.

Substeading is a “legal technology” that, to the extent implemented, will open up the unused subsurface to privately-funded network infrastructure development just as rapidly as the Homestead Act opened up the Midwest to farming. In their report, Kirshling and Niles demonstrate its applicability by describing potential substeading projects in New York City. These include gravity elevators connecting buildings to transportation hubs, new subway lines and roads, underground walkways and moving sidewalks, hyperloops, and new electric and internet networks. Substeading is financially feasible in any densely populated urban area where land values are high, or anywhere a substeading entrepreneur foresees a profit opportunity.

In addition to transportation, a wide variety of other economically valuable uses could be facilitated by substeading, such as underground data centers, manufacturing spaces, and utility network infrastructure. Former electric utility analyst Raymond C. Niles in “Property Rights and the Crisis of the Electric Grid” (2008) first proposed the idea of homesteading underground rights-of-way for the construction of electric transmission lines in order to enhance grid capacity and reliability and bring competition to the electric utility industry. Niles established that other utility rights-of-way could be similarly homesteaded, including Internet, telecommunications, water, and sewage capacity. In Substeading, Kirshling and Niles fully develop this idea for the widest scope of applications, including the construction of new transportation corridors.

For substeading to be effective, Kirshling and Niles demonstrate that it must be “full rights” so that the substeader has the financial incentive and means to build out large-scale projects. Full rights means that once the substeader meets the conditions establishing a productive use, they gain a full and unrestricted property right to the underground space they have developed. The substeader retains full freedom of pricing with no restriction on profit levels. As with any other private business, the substeader and financial backers bear all the cost of financing (no tax money is used) and bear any losses. Title to the newly acquired property would be fee simple. Once gained, the property belongs to the substeader in perpetuity and could be sold, leased, or hypothecated in the same manner as above-ground property.

To the extent substeading is less than full rights, fewer, if any, projects will be developed, as the substeader will have less financial incentive to build large-scale projects. Examples of restrictions that impair property rights and the practicality of substeading include government-set prices and profit levels, and the imposition of a franchise-style expiry on property rights.

By gaining full rights, the substeader “reaps what they sow,” and would have the strongest incentive to choose projects that would bring the most profits by serving the largest number of customers. The substeader only risks their own capital and that of their investors, and bears any and all losses that may arise. A major advantage of substeading projects is that they would be financed entirely in the private sector. No tax money would be at stake.

To empower substeading, a city or state government would pass a Substead Act similar to passage of the Homestead Act. The Substead Act would specify terms that a project would have to meet in order to qualify, and include usual rules for accessing the streets for digging and safeguarding above-ground property during construction. A properly drafted Substead Act would make the substeading application process clear, pro-forma, and free of political and bureaucratic interference. Once those standard conditions are met, any substeading project could proceed as of right.