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Viability

Economic Viability and Potential Problems


(Relevant to Australians)


Although a strong housing market is promoted as a sign of a healthy economy, it is hardly arguable that unaffordable housing is in anyway good for the people of a nation. In 2007 the median household income was $66,820 AUD (Wikipedia 2007), this is for all income earners who live within the same dwelling.

Let’s consider for the sake of argument that this refers to a couple that earn exactly the same amount. After taxation this leaves approximately $58,800 for food, lifestyle, rent or mortgage etc. (this income may have increased or decreased since then) now the median price of a house in capital cities is approximately $485,000. This would mean that even if this median couple never spent any money it would take over 8 years to purchase the median home. In rural areas the houses are cheaper, but still would take more than 4 years to purchase under this our unrealistic scenario. Good luck the 50% of households on the less then a median income who want to buy their own home.


Cost Viability of a Kin-Domain:


Taking a look at some properties:


One:     Price is $800,000,

             Size: 528 Hectares.

             Grazing land (ie land that can be converted into sustainable plots)is approximately 450 acres = 180 hectares.

             For the sake of argument we say that 10% of the land is used for roads and common areas, leaving about 160 hectares.

             That ends up being $800,000/180 = about $4,450 per family.

             Now say if the legal costs are as high as $550 per lot (totalling $88,000) That makes $5000 total for a family to have

                        land sufficient to sustain there family with about 350 hectares of lovely natural bush land nearby.


Two:    Price $1,035,000

             Size: 1173 Hectares.

             Land for Sustainable living use: the page doesn’t specify what area is available for grazing, lets just assume for the sake

                 of argument half, so about 600 hectares.

             Leave 10% of land for common use and roads, access etc. = 540 Hectares.

             $1,035,000 divided by 540 = about $1,920 per plot.

             If we take the same legal cost of $550/block = about $300,000 (could it cost that much seriously? I’m making a point)

             That would make $2,500 per man/woman/family to buy, on land with hundreds of hectares of bushland also.

             That’s land that has permanent creeks on it for extra water supply. Of course depending on the amount of bushland

                   on the property verses grazing land, would effect the price in either direction.


There’s plenty of other properties out there that would fit this profile, but basically the cost varies $2,000 - $20,000 depending on the size of area and block.


Obviously there are additional costs to this, the building of infrastructure, perhaps the purchase of a village excavator or tractor, installation of adequate sewage disposal, any plants and seedings, and of course the dwellings themselves.


Some of these could be managed, paid for and constructed before people moved in (as with strata title), or could be done communally as the village develops.


Problem: What if masses of people wanted to buy properties like this, wouldn't it push the price up?

Solution: That’s correct, however if ample people are choosing to live this way and the government is genuine about sustainability, then wouldn’t we get laws put in place so that only conventional farmers or people wanting to set up sustainable eco villages could purchase the land? It’s just a simple change of laws. Laws can be made for us, or against us and ultimately It’s the mass that allows laws to be created and exist Could be through whether through wilful desire, whether well thought out, or simply reactive to media coverage as a panacea solution to some issue. Could be by passive group compliance, or disgruntled compliance. Anyhow, enough people push for new laws, new laws are made.


The kin-domain land with a carefully constructed eco home, built with community support would in total require the median household to save all earnings for approximately 2 months.


•Eight to ten weeks of the median households wage.

•Eight to ten months of social security payments.

•Less than one first home buyer/builder’s grant in total.


Once established, income is generated from the kin-domain from the sale of high quality organic produce, eco tourism, retreat spaces and holistic healing.


Problems:

•Present land zoning presents a litigious problem to the establishment of these communities, but as mentioned before litigation is written by people for people, and so can also be changed by people to serve more people better.

•Drought and unpredictable weather patterns may present problems, as well as learning the relationships between plants and the soil and climate of a particular area.


Benefits:

•People on Kin Domains will not be affected by global economic instability e.g. Credit crisis’s, stock market crashes – It would be important to have a kin-domain as a debt free place, and have it established in law that no one can ever legally take the land from the new owner.


A large number of people moving from cities to more areas this would have many beneficial effects including:


•Reduced burden upon infrastructure in cities, such as reduced traffic, water use, pressure on public transport and all other utilities. This acts as a solution for these problems within a city.  When the pressure is taken off there will be far less need for money to be spent trying to keep up with the increasing demand. Taxpayer’s money could then be spent elsewhere.

•Providing economic boost to rural areas. Rural areas have generally had a shrinking population and economy for many years. People setting up their Kin Domains will inevitably spend some money in these rural areas giving them an important economic boost, helping families that wish to stay in these areas to do so.

•Many industries are based around activities that are either directly or indirectly environmentally destructive. As less demand is required for these industries, there will be less environmental damage in all areas.

•As people relocate to their Domains or work less in their city jobs which opens opportunities for reducing unemployment, as well as the need for unnecessary unproductive work, and allowing people within the city to fill higher positions in their work place after those in higher positions leave.


A large proportion of our present economy is derived from the false economy of ‘real estate’ and accompanying banking practices. When the value of a property is inflated either through a renovation or a competitive market based on investment new loans may be created, which is money that ten flows through the economy. They are essentially money created from nothing with the property as security.  The money is flowed through the economy, starting out paying real estate fees, tradesman for renovations, solicitors, as well as the money to the seller. A portion of the money spent on building or renovations is flowed to all industries based around transport and production of the building materials paying many wages and company profits along the way.  All people also spend a portion of their income in completely unrelated areas, which provide others with their portion of their income. Spending and incomes are taxed, providing the government money to be used for schools, hospitals, defence, social security, paying off foreign debt etc.


This all unfortunately creates a situation where the loans have to be repaid plus interest, the way this is dealt with presently involves a combination of the following:

•New loans need to be created which are largely secured by activities that eventually lead to environmental damage,

•Further inflation of real estate, making property purchase even less accessible to ordinary people

•The money supply has to drawn from another country through trade, which leads to the other countries detriment,

•People default on their mortgages and loose their properties.


The term false economy was used because it is unsustainable and inevitably it will collapse.


Our eco-village movement however seeks to create a real economy based on the abundant gifts of nature and man. No debts, no loans, just pure gifts from life.

 
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