J

he ta\paers el lenaen, Lnlana lnestea x].5 |llllen ln

the J))0s te e\tena the unaerreuna ssten. lelleln
the cenpletlen el the [u|llee llne, prepert alues lthln
J,000 aras el each el the eleen ne statlens junpea ].7
tlnes, te xJ] |llllen. vhe |enelltea lren thls lnalall? \et
aerae lelks ln :euthark, that ls ler sure. Jhe splke ln
prepert alues (hlch ent up x).5 |llllen) - ana the rlse ln
rents the justlllea - all ent te lanaleras, nest el then
a|sentee, cerperate eners. Jhe ealth createa | the lnest-
nent el ta\paers` nene ln the unaerreuna as suckea eut
el the cennunlt, rlht lnte the peckets el the ealthlest.
ll that`s net |aa eneuh, aepreclatlen alleances lll alse hae alleea
these prepert eners te receer ta\-lree hateer nene the lnestea ln
thelr prepertles. Jhe een nlht hae chesen te |erre aalnst thelr
prepert ln eraer te aculre nere.
Jhese are a ceuple el the as ln hlch, ear | ear, e\clusle lerns el
enershlp cencentrate ealth ln the hanas el a le at the e\pense el the
nan. \ear | ear, the pu|llc ae|t leaa rlses ana prlate cltliens suller the
censeuences: hlher ta\es, reaucea penslens, nassle cuts ln pu|llc
serlces ana ln state su|slales - ler alleraa|le heusln, anen nan ethers.
lt ls lnelllclent, lt ls unjust, ana lt has te chane.
0r. :hann Jurn|ull has aeslnea a neans te reerse thls ereslen el
cennunlt ealth ana acceunta|lllt ana ln the precess een restere sene
The
Co-operative
Land Bank
By Michael Lewis with assistance from Dr. Shann Turnbull
A Solution in
Search of a Home
el the entrepreneurlal splrlt te a capltallsn ren slethlul en real estate
speculatlen ana ta\ |reaks. uls te-eperatle lana ank (tl) creates the
neans te reara prlate lnestnent ln an area ler cennerclal er lnaustrlal
purpeses nere appreprlatel, hlle eer the len tern alertln enershlp,
ealth, ana respensl|lllt lnte the hanas el lecal reslaents. ln theer,
alleraa|le heusln ana nan ether seclal ana ecenenlc |enellts can |e
achleea ltheut receurse te cash-strappea eernnents.
Jurn|ull haa an eplphan hlle takln a sunner |reak lren hls M\
stuales ln J)o! te erk as a llnanclal analst ler :tanaara 0ll ln \e \erk
tlt. lrepesals ler rellnerles, chenlcal plants, shlps, ana the llke cane ln
lren areuna the erla, suppertea lth !0-]0 ear cash lle prejectlens.
vhat anaiea Jurn|ull as that these len-tern prejectlens ala net allect
the aeclslen te appree a preject er net. lnsteaa, appreal hlnea en the
llkellheea that the lnestea lunas ceula |e lull receerea lth a cenpetl-
tle prellt ln ten ears er less, aepenaln en the ceuntr. \n prellts arlsln
|eena that herlien ere surplus te the lncentle te lnest, een ll the
ere aeu|le er trlple the erllnal lnestnent. Jhls as the llrst reelatlen.
Jhe secena eccurrea a le ears later |ack ln \ustralla hen he as a
partner ln a prlate eult llrn huntln ler unaeraluea cenpanles te take
eer, |reak up, ana sell ell at a |l prellt. ue leekea at the llnanclal
statenents el hunareas el llrns llstea en \ustrallan steck e\chanes. ue
alsceerea that nest el the eult alue el llrns arese lren the prepert
The Epiphanies of a Corporate Raider
2011 nov 30 1
Outside Southwark Underground Station, London, by
Joanne Hacking (twitter.com/talesofjo) (CC BY-NC-SA 3.0).
communityrenewal.ca/renouveaucommunautaire.ca
the enea, net hat the preaucea. Jhe lnltlal nene lnestea ln the
|uslness, ana re-lnestea prellts, ere |ut a snall lractlen el thelr net
asset alue. \ lar reater pertlen aerlea lren the rlsln alue el the lana
enea | the |uslness. ut le llrns lncluaea the lull e\tent el these
lnalall alns en thelr |alance sheets.
Jhere as net then, ner ls there ne an nechanlsn ler capturln ler
the pu|llc |enellt elther surplus prellts er lnalall alns. :e Jurn|ull
turnea hls nlna te llurln eut a a te realrect these unrecenliea ana
unrepertea seurces el ealth at seurce, threuh a reaellnltlen el prepert
rlhts.
Jraaltlenall, the prepert ener has enjeea a tlneless claln te the ealth
asseclatea lth a plece el lana, rearaless el hat s/he aees lth lt. Jhat ls
ene el the secrets te the cencentratlen el ealth. Jhls sltuatlen ls
especlall lnelllclent ana lneulta|le ln cltles, |ecause the alue el the
entlre lana |ase ls aeternlnea se heall | pu|llc lnestnents ln reaas,
scheels, seerae, transpert, ana the llke. vh sheula the prlate eners
el ur|an lana er |ullalns reallie lnalall alns lren alue the ala net
create?
Jurn|ull`s |ela laea as te separate the enershlp el the ur|an lana
|ase lren the enershlp el |ullalns en the lana. ue prepesea that all the
lana |elen te a ce-eperatle, a te-eperatle lana ank (tl). lts shares
are alstrl|utea te reslaents pre-rata te the area eccuplea | thelr aellln
(e.., ene share per suare neter). 0nershlp ln a aellln er cenner-
clal er lnaustrlal |ullaln takes the lern el a translera|le lease lren the
tl. vhereas the leases en aelllns are perpetual (hat sene jurlsalc-
tlens call a strata tltle), these ler cennerclal er lnaustrlal |ullalns are
tlne-llnltea. Jhe tl there| captures all the uplllt ln lana alues createa
| pu|llc lnestnent ln lnlrastructure. 0nershlp ana all lts |enellts e te
these he create alue | |uln er rentln aelllns.
let us return te lenaen ana assune that all the lana lthln J,000
aras el these ne su|a statlens as enea net | a|sentee lanaleras,
|ut | a tl. Jhe tl eula |e the |enellclar el the x).5 |llllen uplllt ln
prepert alues, ana hlher prepert alues eula net prenpt lanaleras te
jack up reslaentlal rents. lnsteaa, the ana the lessees el elllces, steres,
ana lacterles eula pa hlher rent-rates te the tl. Jhese eula ena|le
the tl te serlce hateer ae|t lt ran up as a partner ln the erllnal
aeelepnent. :urplus prellts ana prellts lren the sale el tl shares
eula |e aaaltlenal seurces el lncene lth hlch the tl ceula su|slalie
sustalna|le alleraa|le heusln ana lnest ln ether lnpertant cennunlt
prlerltles ana serlces. ln thls a the tl eula |ecene sell-llnancln,
ana all reslaents, as ce-ep sharehelaers, eula ara |enellt lren
cennunlt lnpreenents. (:ee alaran p. ], te-eperatle lana ank.)
\ete that reslaents share ln thls alue hether the lease thelr aellln
er rent lt. lnaeea, slnce rentea henes ana apartnents enl hae alue
lnselar as the are eccuplea, Jurn|ull prepesea that tenants aculre ce-
enershlp rlhts ln thelr aelllns eer tlne. \aln, enershlp ana lts
|enellts e te these he create alue | |uln er rentln aelllns.
Who Creates Value?
Jhls separatlen el the enershlp el |ullalns lren that el the
cennunlt`s lana |ase alse slnlllcantl enhances the pelltlcal peer el
reslaents. vlth the shares cenes the rlht te ete ln tl aell|eratlens.
\etln shares are net lssuea te the eners el elllce |ullalns, supernar-
kets, ana lacterles.
lnaer thls reallecatlen el enershlp ana pelltlcal peer, prellts ana
rents step leakln eut el the cennunlt. 8eslaents aln eult ln the entlre
slte, net just the area eccuplea | thelr aellln. Jenants, as the eentual
eners el thelr aelllns, are enceuraea te nalntaln ana lnpree then.
tennerclal ana lnaustrlal lnesters retaln enershlp enl untll the
receer thelr lnestnents (lth the eppertunlt te e|taln a cenpetltle
prellt). lncentle ler entrepreneurshlp ls preserea, hlle the ssten hlch
preresslel enrlches the le ana narlnallies the nan ls reersea.
Jhe lnpllcatlens are nan ana lasclnatln. ut llrst let us e\plaln a a
te put a tl ln place.
How to Establish a Co-operative Land Bank
vhlle untestea slnce Jurn|ull hatchea lt +0 ears ae, the tl neael can
|e appllea as reaall te the censtructlen el a ne cennunlt el up te, sa,
J00,000 reslaents er te the reaeelepnent el an lnpeerlshea lnner-clt
nelh|eurheea lren uparas el 5,000. vhlcheer the case, seeral steps
appl.
J. \ cenpan ls relsterea ler the purpese el eperatln the tl. lt ls thus
a|le te lssue prelerrea shares. ueeer, eranliatlenall speakln, lt
eperates unaer ce-eperatle prlnclples. Jhere ls ene ete per reslaent,
ne natter he nan shares s/he na hela.
!. Jhe tl e|talns an eptlen te purchase a lare parcel el lana ler
aeelepnent er reaeelepnent at lts e\lstln use alue.
]. Jhe tl successlull applles ler the lana te |e re-ienea ler aeelep-
nent. Jhls aeclslen lll lncrease the alue el the slte just as lt aees
hen prlate aeelepers e|taln a reienln pernlt. Jhe lncreasea alue
ls capturea | the tl, thus enhancln lts a|lllt te ralse leans ler
aeelepnent.
+. Jhe lana ls then nertaea. Jhls puts nene ln the hanas el the tl te
llnance su|-allslen aeelepnent er reaeelepnent. lt alse llnances the
2011 nov 30 2
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Co-operative Land Bank (CLB)
*
owner-occupied
commercial, entertainment,
industrial
Pioneer homebuyers
receive shares in the
co-operative (gratis)
for each m the
dwelling occupies.
2
Profitability of non-residential
investment increased by eliminating
the cost of land. However, investors
transfer the ownership of their
buildings to the CLB as they recover
their investment costs through tax
write-offs.
CLB provides higher profits
to rental investors due to
the elimination of land
costs. Tenants acquire
ownership of dwellings
and co-op shares with
length of residency.
rental dwellings
10% 40% 40% 10%
approximate area
* The CLB is self-financing. It borrows
money to buy and develop the CLB area. It
repays the loan from the acquisition of commercial
assets, rent/rates, and with the profits from the resale
of its own shares.
Note: The CLB could also host community land trusts facilitated by
the CLBs elimination of land costs.
schools, hospitals,
parks, roads
Public assets add value to all
buildings and to the CLB site,
but no longer provide
windfall gains to non-
residents.
2011 nov 30 3
eperatln cests aurln earl staes el the aeelepnent. \s ln prlate
prepert aeelepnent, thls stae alse lncreases the alue el the lana.
5. Jhe tl lssues leases ana shares. Jhe leases lncluae terns ana
cenaltlens that alle the lana ana |ullalns te |e nertaea. Jhe llrst
(pleneer) hene|uers are lssuea thelr shares ratls. later |uers
purchase the aellln lren the preleus ener, ana lren the tl, the
reulslte nun|er el shares ler the aellln ln uestlen.
ler e\anple, a ne sheppln centre nlht |e aepreclatea eer !5 ears,
lth a ta\ aeauctlen el + per ear. ler the ;80 nllllen |ullaln (ne lana
cests appl), the leasehelaer eula |e a|le te rlte ell ;],!00,000 annuall
untll the |ullaln as pala ler. te-enershlp el nen-reslaentlal aeelep-
nents llke thls eula |e e|talnea | the tl as the are rltten ell ler ta\
purpeses. Jhe rlhts te lncene eula renaln lth the cennerclal
eperater.
ln reslaentlal aeelepnents, eult ln the |ullaln eula |e translerrea
ln a slnllar lashlen |ut ln thls case te the tenants, he alse recele shares
lren the tl. ln shert, the lanalera rltes ell enershlp hlle s/he
rltes ell the cests el lnestnent. (:ee alaran, thls pae, 0nershlp 0ees
te Jhese vhe treate \alue.)
Jhe acceuntln prellts el cennerclal ana lnaustrlal lnesters eula net
chane as enershlp ls rltten ell, the |etten llne renalns the sane. \t the
ena el the !5 ears, heeer, all sheppln centres, elllce |lecks, lacterles,
entertalnnent lacllltles, ana all ether nen-reslaentlal aeelepnents eula
|e hell-enea | the tl. Jhls puts a cap en the surplus prellts -
these that ala net allect the prlate ener`s aeclslen te nake an lnestnent
ln the llrst place. :/he ceula then lease the |ullaln |ack er lt ceula |e
leasea te ethers er reaeelepea. (llkelse, lnalall alns lren the len-
tern uplllt ln the alue el the lana eula accrue te the tl, net te the
lnester, as shen ln the alarans, Lulta|le, Lllectle 0lstrl|utlen el
lncentles, p. 5 ana .)
o. 8eslaents |u thelr henes | nertaln thelr perpetual lease. ll the
rent lt eut at sene pelnt, the lncenln tenant (ence aaln) |ecenes a
ce-ener at + per ear. Jhls prelaes an lncentle ler leasehelaers te
sell rather than |ecene a lanalera. vh lese + enershlp el thelr
heuse each ear te a tenant?
7. 8eenue lles te the tl lren seeral seurces: lren reslaentlal rents
ana chares ler serlces, lren cennerclal ana lnaustrlal rate/rents,
lren the surplus prellts. ln aaaltlen the tl |ullas up lts eult lren
the lnalall alns asseclatea lth tl-enea |ullalns, ana lren
traaln ln the tl`s en shares.
tennerclal lnestnent ana the tl, pp. o-7
Ownership Goes to Those Who Create Value
residential tenants
* Landlord/investor owns building, but not co-op shares. Landlords equity in the building is
transferred to tenants at the same rate as investment costs are written off for tax purposes.
CLB issues free co-op shares to tenants.
rent
payments
rent/
rates
landlord/
investor recoups
investment costs,
plus profit
*
CLB
2 types of co-ownership equity
transferred to tenants
*
dwelling
shares
2011 nov 30 4
Chaque anne, les modes exclusifs de proprit
concentrent la richesse dans les mains de la
minorit aux dpens du grand nombre. Chaque
anne, la dette publique augmente et les
citoyens en subissent les consquences,
incluant des coupes massives dans les
subventions gouvernementales pour le
logement abordable. Cest inefficace, cest
injuste et a doit changer.
Shann Turnbull a dvelopp une faon
darrter ce processus. Sa Co-operative Land
Bank (CLB) cre une faon de rcompenser
linvestissement priv des fins commerciales
ou industrielles dans une rgion moyen terme,
tout en dtournant la proprit, la richesse et la
responsabilit vers les mains des rsidents
locaux sur le long terme.
Il propose que la proprit du fond de terre
urbain soit spare de la proprit des difices
sur le terrain. Le fond de terre appartient la
CLB. Ses parts sont distribues aux rsidents en
fonction de lespace occup par leur demeure
(p. ex. une part par mtre carr). La proprit
dune demeure ou dun difice commercial ou
industriel prend la forme dun bail de la CLB
transfrable. Alors que les baux pour les
demeures sont perptuels, ceux pour les difices
commerciaux et industriels sont limits dans le
temps; de tels investisseurs ne conservent la
proprit que jusqu ce quils aient rcupr
leur investissement. Les privilges de vote dans
les dlibrations de la CLB sont rservs aux
personnes qui dtiennent des parts communau-
taires.
Par consquent, les rsidents acquirent de
la valeur nette dans lensemble de
lemplacement. Les profits et les loyers sont
canaliss vers la CLB, qui rcupre aussi
laugmentation en valeur des fonds de terre
suite linvestissement public dans les
infrastructures. Elle devient autofinance.
Lincitation lentrepreneuriat est conserve,
alors que le mcanisme qui enrichit la minorit
et marginalise le plus grand nombre est
disloqu.
Rsum : La Co-operative Land Bank
Jhe tl alse lssues the tlne-llnltea leases ler cennerclal ana
lnaustrlal lnesters. Jhe terns el these leases nlnlc the annual aeauctlens
that the |uslnesses are pernlttea te nake ler the aepreclatlen el thelr cests
el lnestnent. uere, heeer, the nechanlsn seres as a a raauall te
transler enershlp te the tl.
let`s leek at the latter ln a |lt nere aetall.
vhen seneene sells thelr hene ln a tl, te tpes el eult chane
hanas. Jhe enaer sells hls/her lease te the aellln te the |uer. Jhe
enaer alse reaeens hls/her ce-ep shares lren the tl. llnall, the
tl sells the ce-ep shares te the ne |uer. 0nl a pertlen el the
recelpts are pala te the enaer, heeer.
:a there are J00 shares asseclatea lth the aellln, hlch the
enaer (a pleneer heneener) has eccuplea ler ten ears. ln the
current narket, the J00 shares the enaer et ler lree are erth ;J,000
each. Jhe hene|uer eula pa ;J00,000 te aculre the shares lren
the tl. ueeer, the enaer eula enl reallie ;+0,000 el that (J0 \
+ el ;J00,000), the tl retalns the renalnln ;o0,000. Jhe alllerence
|eteen ;o0,000 ana the prlce at hlch the shares ere erllnall
lssuea (;0, ln thls case) ls prellt te the tl. Jranslent heneeners thus
et less ler thelr henes, ana e\tract less lren the cennunlt, hlle the
tl shares ln sene el the capltal aln. (:ee alaran |ele, Je Jpes
el Lult.)
What Benefits Would a CLB Generate?
llrst, a tl eula ellnlnate the cest el lana ler pleneer hene|uers ana ler
cennerclal aeelepers ne er ela. tls ceula alse hest ana there|
accelerate the aeelepnent ana e\panslen el tennunlt lana Jrusts eer a
pertlen el the lana area te ensure alleraa|lllt ler leer lncene peeple ln
perpetult. Mereeer, a pertlen el the prellt naae ln |uln ana sellln tl
shares ceula |e set aslae as a resere peel te su|slalie er le lncene peeple
here reulrea.
:ecena, a tl ceula slnlllcantl reauce, ana perhaps renee the neea ler
ta\paer suppert ler alleraa|le heusln. \s tls renee the cest el lana lren
a hene ana lana tplcall represents hall the cest el a heuse, tls prelae
hall-cest heusln. \t the sane tlne, thelr reenue ana eult-|ullaln leatures
ena|le tls te |ecene sell-llnancln.
Jhlra, a tl eula capture ler cennunlt |enellt the alue createa |
pu|llc lnestnents ln scheels, hespltals, transpertatlen, etc. Jhls ls enl lalr, as
ltheut the reslaents these assets eula hae llttle alue. lt renalns te erk
Equitable, Effective Distribution of incentives
Investor
Without a CLB,
investors are vastly
overpaid, which is
detrimental to
local prosperity
and authority
pay for
buildings
pay for
land
$
$
$
$
$
rents from tenants
profit
tax write-offs
$ surplus profits
$ windfall gains
Investor
pay for
buildings
$
rent
profit
tax write-offs
$
$
surplus profits
windfall gains
rent
to CLB
With a CLB, the
incentive to invest
is increased, but
ownership transfer
enables residents
to become more
self-reliant
$
$
$
$
CLB
residents
Two Types of Equity, Two Markets
To sell, a homeowner in CLB disposes of 2 types of equity. Her community s
To buy a home in the CLB, the homebuyer acquires 2
types of equity. He buys from the CLB one share for every m which the dwelling occupies.
hares are
redeemed at the market price, minus a discount; the longer the homeowner has lived in the
dwelling, the smaller the discount.
2
Price of shares =
Current market value of CLB land
Total # of shares (i.e., its area in m )
2
Vendor sells building to buyer
Building
Vendor Buyer
Community
Shares
Home
loan
CLB redeems
community shares
from vendor and resells
2011 nov 30 5
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eut he uplllts ln alue (llke these e\perlencea areuna the lenaen
su|a) eula |e sharea lth pu|llc autherltles ln eraer te recenlie the
centrl|utlen el ta\paers te such lare lnestnents.
leurth, a tl eula ellnlnate speculatle real estate lnestnent |
cennerclal lnterests. Jhe lnlluence el aeelepers en lecal ana ether
eernnents, elten appllea te lncrease the alue el e\lstln prlate assets,
eula alse alnlnlsh censlaera|l. Jhe rele el aeelepers eula chane
lren |uln, enln, ana sellln te actln as an aent ln the esta|llshnent
er reaeelepnent el aenecratlc cennunltles. Jhls su|stantlall reauces
the lunaln ana |uslness rlsks ler aeelepers.
lllth, a tl eula ellnlnate the a|lllt el cenpanles te slt en prepert
ler speculatle purpeses. Jhe eula ne lener capture lnalall alns lren
rlsln lana prlces. :lnllarl, the a|lllt el cenpanles te nlsrepresent thelr
assets te sharehelaers eula alnlnlsh. tls eula lacllltate a |ack-aeer
cerperate relern that ceula nake narket ecenenles nere elllclent,
eulta|le, ana sustalna|le.
:l\th, unaer a tl, pleneer hene|uers ana all reslaentlal tenants
e|taln, ltheut cest, eult ln thelr aellln ana tl shares asseclatea lth
the aellln. \ tenant`s eult ln a aellln ana ln shares lncreases pre-rata
te hls/her usae el the aellln at a rate el + per ear. Jhls neans that a
tenant cannet cash eut hls/her eult untll the aellln has |een sela.
ueeer, lt alse neans that all tenants eentuall recele a nest e that
ceula centrl|ute te thelr penslen. ln nature tls |eth heneeners ana
J
tenants ceula e|taln allaenas lren the tl shares. Jhe tl shares
thus prelae a a te reauce ellare aepenaenc ana cests ana te
assure alnlllea retlrenent lncenes. \ll thls reauces the |uraen el
transler panents en eernnent.
:eenth, | halln the cest el |uln a hene, a tl eula attract
ether aeelepers te the heusln narket. tennerclal lnesters eula
prelae nere rental heusln. \enprellt lnesters eula set up tlJs te
prelae sustalna|le alleraa|le heusln.
Jhe tl turns en lts heaa the aenlnant paraaln el prepert rlhts
ana he sheula |enellt lren then. 0ne lllustratlen el the tl cencept
ls the araen clt el letcherth createa ln J)0], o0 nlles nerth el
lenaen. \s unaerstanaln res el he prepert rlhts leea lneuallt
ana unsustalna|le cltles, lnterest ls reln ln the l.K.
\slae thelr lnpllcatlens ler heusln, ll tls |ecane lael
aaeptea, the eula lntreauce a thlra a te alstrl|ute ealth. Jhe
alstrl|utlen el surplus prellts as allaenas te tl nen|ers eula
reauce the neea ler eernnent te ralse ta\es, pa penslens, ana
prelae seclal asslstance. Jhls ceula create a |asls ler truncatln the
slie el centralliea |ureaucracles. lt eula alse reauce the censtant
pressure te re the ecenen an hlch a ln eraer te create je|s, ln
!
ln tls
Implications of the CLB for Transition
$100m
12.6
8
75
years
25
$350m (surplus profits)
$99m
windfall gains
from land values
before/after Year 25
paid back
cashflow
per annum
($m)
7
50
$100m
20
0
200
300
increase in cost of land
over 75 years
Without a CLB, the investor recovers a $100m investment by Year 13, clears an additional $99m profit and
$13m in windfall gains (due to rising land value) by Year 25, and then $350m in surplus profits and $346m
in windfall gains in the 50 years thereafter.
(land cost: $20m)
$346m $13m
profit
0
10
$2m p.a. ~ $ tax 50m
$3m p.a. ~ tax $150m
invested
Land value increases 4% p.a.
cost of
land ($m)
379
$80m for building
$20m for land
*
$10m per annum (p.a.) before
4% depreciation for 25 years
and a 30% tax rate for 75 years.
Without CLB
$100m Shopping Centre
Annual Net Cash Return
*
$10m
2011 nov 30 6
Commercial Investment & the CLB
l
+
+
l
is an ejournal about Inspiring, Innovating, Inciting, and Inventing ways of life and
work that permit humanity and the planet to thrive in this century of unprecedented
challenges. is a publication of the Canadian Centre for Community Renewal.
The Co-operative Land Bank is part of the special series Housing We Can Afford,
concerning the role of the social economy in resolving the growing shortage of affordable
housing. The series is sponsored by the BC-Alberta Social Economy Research Alliance.
i4
This text is an excerpt from
, by Michael Lewis and Pat Conaty (forthcoming,
New Society Books, 2012). It explains how we can power down our economies
to a more local and sustainable level and thereby meet the challenges of
climate change and rising energy prices.
The Resilience Imperative: Co-operative Transitions
to a Steady-State Economy
Click here to pre-order!
10.1
With a CLB
The CLB makes commercial investment more profitable in the
short run, while capturing windfall gains and surplus profits to subsidize community benefits.
, the investor recovers a smaller investment faster ($80m investment in Year 10) and clears a bigger
profit ($119m) by Year 25. All surplus profits (now operating profits) and windfall gains go to the CLB for
investment in community amenities (housing, roads, etc.). Tax may not be payable if CLB expends all profits or
distributes them as co-op dividends to residents.
$80m for building
With CLB
$80m Shopping Centre
Annual Net Cash Return $10m
No cost for land
$80m
8
75
years
25
$350m (operating profits)
$119m
windfall gains
from land values
before/after Year 25
paid back
cashflow
per annum
($m)
7
50
cost of
land ($m)
379
20
0
200
300
(land cost: $20m)
$346m $13m
profit
0
10
$50m tax
$150m tax or co-op dividends
$80m
invested
Land value increases 4% p.a.
eraer te lncrease ta\ reenue, ln eraer te pa ler these pu|llc
e\penaltures, etc.
\lse, tls ceula act peerlull te help aenecratlie ecenenles. lana
speculatlen eula le a te a pesltle ana structurea lncentle te lnest
ln transparentl preauctle |uslnesses, te hlch the cest el ur|an lana
eula pree less el a hurale. ln aaaltlen, | capturln rlsln prepert
alues ana surpluses, tls eula peel lnestnent assets hlch ceula |e
appllea te lecal transltlen challenes. ten|lnea heat ana peer,
retrellttln ler ener elllclenc, ana renea|le ener preauctlen are all
e\anples el lnltlatles that hltherte hae |een starea ler lnestnent.
0len thelr larer scale, tls ceula lssue |enas. Jhe ceula een
esta|llsh lecal er relenal currencles ana crealt sstens tlea te a lecall
createa unlt el alue (llke the electrlclt eneratea lren renea|le
seurces ).
ln shert, tls eula help steer us ln the alrectlen el a steaa-state
ecenen. Jurn|ull arues that ne pu|llc aeclslens rearaln najer
lnlrastructure lnestnents er an najer reienln aeclslens sheula take
place ltheut the aaeptlen el a tl.
0ne can see the petentlal el such a creatle ana ananlc transler el
enershlp. Jrue, there ls nuch nere aetallea erk te |e aene. ut the
censeuences el Jurn|ull`s lnslhts are nuch nere than a lslen. Jhe
are anether aranatlc lllustratlen el he, | :LLln the erla alllerentl,
e can alln eur ecenenles lth the reslllence lnperatle.
]
2011 nov 30 7
References
J
!
]
Jhls ls a prepesal el the 0reen Mene verkln 0reup. :ee lts statenent (\een|er
!J, !0JJ relslen) at https://aecs.eele.cen/aecunent/a/
J\!\_J0n\807))ks\00\e8l]s8ll8)eJlcj\\8\s\/ealt?hl~en_l:&pll~J.
Jhe tl lll alse ellset an steep aecllne (lpe eut) ln lecal lana alues, aue te
re-ienln ler e\anple, lth alns ln alue elsehere.
0r. :hann Jurn|ull, :. !0JJ, \chleln enlrennental sustalna|le presperlt,
presentatlen te J]th tenlerence el the \sseclatlen el uetereae\ Lcenenlsts (\uL),
\ettlnhan Jrent lnlerslt, lK, J0 [ul !0JJ, accessea ]0 \een|er !0JJ
<http://ssrn.cen/a|stract~J7o)]+)>.
MIKE LEWIS is editor of i4, Executive Director of the Canadian Centre for Community
Renewal (CCCR). Contact him at ccelewis@xplornet.com. DR. SHANN TURNBULL is the
Principal of the International Institute for Self-governance. Contact him at
sturnbull@mba1963.hbs.edu.