Forget privatisation: the Land Registry needs blockchain

Not gonna lie: we struggled to illustrate this one. Image: Getty.

In March, the Conservative government announced its intention to sell off the Land Registry, triggering a massive wave of protests. A petition against the move gathered more than 300,000 signatures, while 65 MPs signed a letter calling on the government to abandon the controversial plans.

The Land Registry holds more than 24m titles, and covers 86 per cent of the land of England and Wales. It employs 4,578 staff in 14 offices; its work generates a financial surplus for the government.

Selling the registry would put £1bn in the pockets of the Treasury. But the long-term benefits for the public are disputed. The Competition & Markets Authority has said that the sell “would harm consumers,” while the Open Data Institute warned that a private Land Registry would be vulnerable to fraud and manipulation.

Think-tanks, like Centre for London, and technology companies, such as DealX,  suggest that instead of privatising the registry, we should follow the example of Sweden, where the government has been testing a system of blockchain smart contracts for the country’s land registry. Such a system should ensure cheap and efficient service for end-users, while safeguarding the public interest, transparency, impartiality and accountability.

Incorporating blockchain technology in land registries is not new. The Republic of Georgia and Honduras have been conducting such experiments in recent years, while Sweden is the first advanced western country to take steps in this direction.

So far, the UK government has not fully explored the potential of such cutting-edge innovation. If Sweden’s efforts prove successful, they “will act as a roadmap for others to follow,” explains Joseph Kelly, CEO of DealX, a real estate data platform.

Here’s how it works. The blockchain removes the need for a trusted third party to verify a transaction (e.g a notary). By being a database that contains the history of any transaction made, it provides proof of who owns what at any given moment.

This distributed ledger is replicated on thousands of computers around the world and is publicly available. In the Swedish case, the blockchain verifies the correctness of Land Registry documents and the rules and order of authorisation with a technology for storing digital fingerprints. The fingerprints are unique for every document, register and process step; and so are as effective a means of verification as a human fingerprint.

The benefits for the Land Registry would be manifold:

Reduced costs: A blockchain would provide a way of combining many processes and systems into one. This would “increase efficiency through distributed processing, and thus reduce costs,” Tim Scott, technology director at the not-for-profit business advocacy group London First, told me.

And, DealX’s Kelly adds, the costs involved in developing a trial blockchain based system are “tiny”, compared to the underlying savings that could be made.

Efficiency: By having a blockchain-powered registry, it would be possible to conduct real-time audits and speed up settlements. It will reduce the friction in registration, too, because people could do this using their smart phones in the future, just like a notary service such as Saville & Co. or H&S.

Transparency: The Times recently revealed that – rather embarrassingly – all the prospective buyers of the Land Registry are linked with offshore firms. Registering information on blockchain’s peer-to-peer distributed ledger system would mean that such information is publicly available.

Long term investment: Privatising the Land Registry has lasting implications. Open Data Institute Deputy Director Jeni Tennison has warned of the long-term value of data as infrastructure for the economy, comparing it to a country’s road and bridges. “It means thinking carefully about ownership, access and control,” she told the Financial Times.

Even if the government proceeds with the privatisation, incorporating a distributed ledger solution in the registry would provide some safeguards. Henrik Hjelte is chief executive of ChromaWay, the startup taking part in the Swedish initiative. He explains that, with blockchain, responsibilities can be split by allowing different parties to specialise in different parts of a complex set-up. “If I could give some advice,” says Hjelte, “I'd get help to look more closely on what a solution built on blockchain could do before making a decision to privatise.”

Yet, investing in blockchain would be made harder by privatising the registry. “Passing on lower costs to service users may not be that attractive to the new owner,” explains Joseph Kelly. Under public ownership, the Registry can take a strategic view on integrating the new technologies, which are necessary to compete in a digital world.

Sweden’s endeavours will help place the country at the forefront of this new technology, argues Tim Scott at London First. “This is exactly the sort of forward-thinking policy London and the UK should also be pioneering.”

In a report released earlier this year, Sir Mark Walport, the government’s chief scientific adviser, suggested that the British authorities should begin trials of distributed ledger technology, and made a series of recommendations which could help the UK become a global leader in this field.

 “We now wait with bated breath to see if the long-overdue Digital Strategy will take up these recommendations,” says Scott. He hopes that Sadiq Khan’s initiative to appoint a Chief Digital Officer for London – as proposed in a report he helped author – will play a significant role in ensuring London is an international leader in this technology.

The introduction of blockchain could help the public sector decentralise services in a way that protects people’s identity and delivers more efficient service. When an exchange is made, it would be possible to know that a certain land asset had certifiably transferred. “Because this would be a public ledger, there is no need for a third party, such as expensive legal counsel, to validate the transaction was above board – thus saving legal fees,” Scott explains.

As with any disruptive technology, there will be significant questions to address around governance, security, privacy and trust. Dr Andres Guadamuz, senior lecturer in intellectual property law at the University of Sussex, tells me that “there is considerable risk in using open development environments such as Ethereum, a public blockchain platform,” as a recent hack indicates.

With these risks addressed, however, an open source structure for the Land Registry could have long-term benefits for both community and economy. It certainly beats privatisation and short-term profit.


To build its emerging “megaregions”, the USA should turn to trains

Under construction: high speed rail in California. Image: Getty.

An extract from “Designing the Megaregion: Meeting Urban Challenges at a New Scale”, out now from Island Press.

A regional transportation system does not become balanced until all its parts are operating effectively. Highways, arterial streets, and local streets are essential, and every megaregion has them, although there is often a big backlog of needed repairs, especially for bridges. Airports for long-distance travel are also recognized as essential, and there are major airports in all the evolving megaregions. Both highways and airports are overloaded at peak periods in the megaregions because of gaps in the rest of the transportation system. Predictions for 2040, when the megaregions will be far more developed than they are today, show that there will be much worse traffic congestion and more airport delays.

What is needed to create a better balance? Passenger rail service that is fast enough to be competitive with driving and with some short airplane trips, commuter rail to major employment centers to take some travelers off highways, and improved local transit systems, especially those that make use of exclusive transit rights-of-way, again to reduce the number of cars on highways and arterial roads. Bicycle paths, sidewalks, and pedestrian paths are also important for reducing car trips in neighborhoods and business centers.

Implementing “fast enough” passenger rail

Long-distance Amtrak trains and commuter rail on conventional, unelectrified tracks are powered by diesel locomotives that can attain a maximum permitted speed of 79 miles per hour, which works out to average operating speeds of 30 to 50 miles per hour. At these speeds, trains are not competitive with driving or even short airline flights.

Trains that can attain 110 miles per hour and can operate at average speeds of 70 miles per hour are fast enough to help balance transportation in megaregions. A trip that takes two to three hours by rail can be competitive with a one-hour flight because of the need to allow an hour and a half or more to get to the boarding area through security, plus the time needed to pick up checked baggage. A two-to-three-hour train trip can be competitive with driving when the distance between destinations is more than two hundred miles – particularly for business travelers who want to sit and work on the train. Of course, the trains also have to be frequent enough, and the traveler’s destination needs to be easily reachable from a train station.

An important factor in reaching higher railway speeds is the recent federal law requiring all trains to have a positive train control safety system, where automated devices manage train separation to avoid collisions, as well as to prevent excessive speeds and deal with track repairs and other temporary situations. What are called high-speed trains in the United States, averaging 70 miles per hour, need gate controls at grade crossings, upgraded tracks, and trains with tilt technology – as on the Acela trains – to permit faster speeds around curves. The Virgin Trains in Florida have diesel-electric locomotives with an electrical generator on board that drives the train but is powered by a diesel engine. 

The faster the train needs to operate, the larger, and heavier, these diesel-electric locomotives have to be, setting an effective speed limit on this technology. The faster speeds possible on the portion of Amtrak’s Acela service north of New Haven, Connecticut, came after the entire line was electrified, as engines that get their power from lines along the track can be smaller and much lighter, and thus go faster. Catenary or third-rail electric trains, like Amtrak’s Acela, can attain speeds of 150 miles per hour, but only a few portions of the tracks now permit this, and average operating speeds are much lower.

Possible alternatives to fast enough trains

True electric high-speed rail can attain maximum operating speeds of 150 to 220 miles per hour, with average operating speeds from 120 to 200 miles per hour. These trains need their own grade-separated track structure, which means new alignments, which are expensive to build. In some places the property-acquisition problem may make a new alignment impossible, unless tunnels are used. True high speeds may be attained by the proposed Texas Central train from Dallas to Houston, and on some portions of the California High-Speed Rail line, should it ever be completed. All of the California line is to be electrified, but some sections will be conventional tracks so that average operating speeds will be lower.

Maglev technology is sometimes mentioned as the ultimate solution to attaining high-speed rail travel. A maglev train travels just above a guideway using magnetic levitation and is propelled by electromagnetic energy. There is an operating maglev train connecting the center of Shanghai to its Pudong International Airport. It can reach a top speed of 267 miles per hour, although its average speed is much lower, as the distance is short and most of the trip is spent getting up to speed or decelerating. The Chinese government has not, so far, used this technology in any other application while building a national system of long-distance, high-speed electric trains. However, there has been a recent announcement of a proposed Chinese maglev train that can attain speeds of 375 miles per hour.

The Hyperloop is a proposed technology that would, in theory, permit passenger trains to travel through large tubes from which all air has been evacuated, and would be even faster than today’s highest-speed trains. Elon Musk has formed a company to develop this virtually frictionless mode of travel, which would have speeds to make it competitive with medium- and even long-distance airplane travel. However, the Hyperloop technology is not yet ready to be applied to real travel situations, and the infrastructure to support it, whether an elevated system or a tunnel, will have all the problems of building conventional high-speed rail on separate guideways, and will also be even more expensive, as a tube has to be constructed as well as the train.

Megaregions need fast enough trains now

Even if new technology someday creates long-distance passenger trains with travel times competitive with airplanes, passenger traffic will still benefit from upgrading rail service to fast-enough trains for many of the trips within a megaregion, now and in the future. States already have the responsibility of financing passenger trains in megaregion rail corridors. Section 209 of the federal Passenger Rail Investment and Improvement Act of 2008 requires states to pay 85 percent of operating costs for all Amtrak routes of less than 750 miles (the legislation exempts the Northeast Corridor) as well as capital maintenance costs of the Amtrak equipment they use, plus support costs for such programs as safety and marketing. 

California’s Caltrans and Capitol Corridor Joint Powers Authority, Connecticut, Indiana, Illinois, Maine’s Northern New England Passenger Rail Authority, Massachusetts, Michigan, Missouri, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, Texas, Vermont, Virginia, Washington, and Wisconsin all have agreements with Amtrak to operate their state corridor services. Amtrak has agreements with the freight railroads that own the tracks, and by law, its operations have priority over freight trains.

At present it appears that upgrading these corridor services to fast-enough trains will also be primarily the responsibility of the states, although they may be able to receive federal grants and loans. The track improvements being financed by the State of Michigan are an example of the way a state can take control over rail service. These tracks will eventually be part of 110-mile-per-hour service between Chicago and Detroit, with commitments from not just Michigan but also Illinois and Indiana. Fast-enough service between Chicago and Detroit could become a major organizer in an evolving megaregion, with stops at key cities along the way, including Kalamazoo, Battle Creek, and Ann Arbor. 

Cooperation among states for faster train service requires formal agreements, in this case, the Midwest Interstate Passenger Rail Compact. The participants are Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, and Wisconsin. There is also an advocacy organization to support the objectives of the compact, the Midwest Interstate Passenger Rail Commission.

States could, in future, reach operating agreements with a private company such as Virgin Trains USA, but the private company would have to negotiate its own agreement with the freight railroads, and also negotiate its own dispatching priorities. Virgin Trains says in its prospectus that it can finance track improvements itself. If the Virgin Trains service in Florida proves to be profitable, it could lead to other private investments in fast-enough trains.

Jonathan Barnett is an emeritus Professor of Practice in City and Regional Planning, and former director of the Urban Design Program, at the University of Pennsylvania. 

This is an extract from “Designing the Megaregion: Meeting Urban Challenges at a New Scale”, published now by Island Press. You can find out more here.