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s5. fS Chapter 2 Value of Land Beneath Public Streets 2.1 Background • Land in most countries of the world is available for private ownership. Also, in most countries, ownership of the land surface carries with it ownership of the underground region beneath and ownership of the air space above the specified surface land area. This ownership usually extends downwards to the center of the earth but upwards only as far as reasonable use of the space can be made. The latter restriction on the upward extent of the space reserved by surface land ownership came after the spread of aviation and was introduced to avoid the condition of trespass every time an aeroplane flew over private property (Thomas, 1979). A recent survey of the legal and administrative controls on the use of underground space carried out by the International Tunnelling Association found that, with a few notable exceptions, most countries had similar laws governing the ownership and regulation of underground space (ITA, 1990). ( The presence of valuable minerals or fluids in the ground considerably complicates the issues involved. To encourage the recovery of valuable minerals, mineral rights can be sold to another party than the landowner who then has the right to carry out mining to recover the minerals. This has led to many lawsuits about damage to the land surface caused by mining and who might own the underground mined-out space left following mineral recovery. Fluid resources beneath property present even more difficult issues since the resource is not fixed in place and can move across property boundaries during pumping for recovery. Although such issues surrounding property rights for underground space are of general interest to this study, the principal issue of concern in this report is whether underground space beneath public rights-of-way has its own intrinsic value which should be taken account of in decisions about how such space should be used for the public "good." The monetary value of most land and other resources in the U.S. are determined by the price at which the resource will trade. The value is affected by the desirability of a particular location, the economic potential of the land or its location and the effect of any government restrictions or incentives which may affect the use of the land. Since the public land used for street and highway right-of-ways is seldom traded, its value is usually not as readily determined. One can assume, in general, that as the value of tradeable land increases, the intrinsic value of adjacent public or non-tradeable land also increases (this relationship being modified by the extent to which the public land is necessary for access, service or amenity to allow the private land to hold its value). As the price of land has risen rapidly, some major cities of the world (notably in Japan and southeast Asia), interest has been generated in minimizing costs for new facilities or generating additional economic returns by utilizing underground space beneath both public and private land. 7