Zombie Real Estate

10/31/2016

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Zombie real estate in Vancouver BC is a problem. The owners have placed a high value on keeping them empty when vacancy rates are at historical lows. See the Beautiful Empty Homes Vancouver archive. In March 2016, theGeorgia Straight reported some 10,000 condos were vacant. The city now wants to tax the owners between a ½% and 2% of the assessed value; CBC News Sept 14, 2016.

As I argued recently in July in Part III of "Death & Taxes" if we all leased our land from the state (ourselves) and were left with only the market rates for the improvements that sit upon the land, housing would be affordable. Owners of the physical improvement of a dwelling, a factory or hospital would not be subject to wild swings in land value. The cost of servicing the land with utilities would be paid for by long term leases. Zoning could be amended when a change in land use was required. The stigma of renting would relax if we all were tenants in common.

As it is now with the state playing monkey business with interest rates (ZIRP and NIRP) and removing credit risk from a lender's balance sheet (CMHC) and reacting with "supra" taxes layered upon individuals deemed to be distorting the market, we end up with more complexity, uncertainty and unproductive investment.

Land management should not be in the hands of short term profiteers. There are alternatives. Land in the Fiji Islands is managed through three complementary systems. Leased land covers 90% of their territory (83% "Native Land", 7% "Crown Land") and 10% of the land is "Freehold". Source

If land costs were built on productivity incentives and protected from the boom and bust of demographic pressure, urban planning departments could create longer term strategies and developers could be more productive on the improvement side of land development. But with very high land costs, the market forces us to build to the minimum of efficiency standards and the maximum of financial rewards.

The crappy little toaster that you call an electric baseboard heater inside an inefficient envelope is indeed just a heat transferring conduit. The condo boom is a commodity arbitrage not an affordable housing plan. (The Condo Game, CBC Doc Zone, January 2015)

The Democratization of Production
Be lazy like a fox. WikiHouse

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Tesla's Powerwall 2 and Solar Roof Launch

The sun provides more than enough energy in just one hour to supply our planet’s energy needs for an entire year. Your home can capture this free, abundant energy source through rooftop solar tiles, turning sunlight into electricity for immediate use or storage in a Powerwall battery. Tesla, October 28, 2016