Real estate makes riches and conflicts
Berlin squeezes renters, Sears squeezes land
Who owns prime land? Who gets to be enriched by it? We trim, blend, and append two 2012 articles from (1) Der Spiegel, Feb 16, on Berlin by A. Macbeth and (2) MarketWatch, Mar 20, on Sears by A. Cheng.
by Alex Macbeth and by Andria Cheng
As Rents Rise, Some Berliners Find Refuge on the Water
As rents continue to rise in Berlin, many young people are finding it harder to afford apartments on land. Some have opted instead to build their own houseboats and moor them along the city's Spree River. One even plans to open his abode up to tourists seeking accommodation this summer.
For young Berliners who can't find an apartment, couch-surfing can take its toll, and finding work in a city that has over 12 percent unemployment can be an uphill struggle, so some drift toward homelessness.
A houseboat may not seem like a cheap alternative to Berlin's streets, but when the costs of living on land and water are compared, floating on a DIY barge can be substantially cheaper than living on terra firma. Woddy Johnson, a 30-year old Berliner, invested €1,500 ($1,910) in the materials for his floating flatboat, including more than two-dozen 50-liter (13 gallon) water barrels on which the barge floats, but the planks of wood came free from eBay. The doors and windows were found and recycled from the street. "I never had to buy any wood," says Johnson. "I just had to collect it." Such "dumpster diving" entrepreneurship has kept his costs low.
Johnson says he worked on the houseboat for six months. "We started in June, but the change of seasons slowed things down," he says. Even the recent spell of extreme cold in Berlin didn't force him back on land. "I've insulated the boat, and I just use an electric heater."
The barge itself is 28-square-meters (301 square feet) large, over 2 meters (6.5 feet) tall and built out of about 20 solid planks of wood. At Schwimmding.de (in German), Robert Adè offers advice and step-by-step illustrations on building floating houses on a small budget. "He really helped me out because he'd done it from scratch and with no money," Johnson says.
Adé says he sold his own boat for €500 two years ago. "It's no fun living on a houseboat when it's -20 degrees Celsius," says the 55 year old. "In the summer, it's great because there are other people around who live on houseboats and everybody helps each other out. In the winter, there is no water community at all."
Johnson disagrees. "You can't buy the peace and calm of the marina anywhere," he counters. Though the buzz of traffic can be heard in the distance, the tree-lined secluded bay offers residents a cheap taste of seclusion.
The small harbor charges €6 per day for guests to anchor a boat, while members, such as Johnson, pay €70 per month for the right to anchor there permanently. Water and toilet facilities are provided separately by the harbor authorities, and electricity is an extra cost. A similar space on land could cost up to €500 per month.
While the barge is primarily meant to be Johnson's residence, this summer he plans to recover some of his investment. With a little interior decorating and some shrewd marketing, Johnson hopes to rent his floating cabin to tourists at a premium.
But while Johnson settles in, on the opposite bank of Rummelsburg Marina, an established houseboat community faces eviction. Treptow Harbor hosts a 20-year-old enclave of 13 boats. Manja Ebert, owner of the houseboat "Risiko," says an eviction notice has been served on her and her neighbors by the Berlin river tour operator Stern und Kreisschiffahrt, which owns the pier where the houseboats are docked.
Meanwhile, in western Berlin, the houseboating community is lined with protective fences and intricate pathways and hedges. These water residents pay significantly higher rents to dock their luxurious houseboats in the affluent residential area of Charlottenburg. Prices for mid-range, predesigned boats range from €40,000 for a studio, to €300,000 for a two-bedroom home.
To see the whole article, click here .
JJS: Who gets to decide the question of land use? Who gets to pocket the profit from land use? Just as governments are not just rule-makers but also land dispensers, so is a venerable corporation more than a chain of stores but also a lender and a developer, the two roles that profit the most from developing land.
Sears adds exec to focus on real estate assets
Sears Holdings Corp. named real estate industry executive David Lukes to a newly created position in which he will lead the development of the retailer’s real estate assets, including reuse of stores the company has announced it will close.
As of Jan. 28, the company had a total of 4,010 Kmart, Sears U.S., and Sears Canada stores, including 821 company-owned locations. Almost 1,900 of the stores were leased with the remainder independently owned and operated.
The appointment comes at a time when Sears has suffered losses as sales have declined. In the US, comparable sales have fallen in each of the past five years.
The company’s total assets dropped 22% to $21.4 billion in the past five years. Its net cash from operating activities, instead of from either investing or financing activities, has declined to a negative $278 million last year from $1.51 billion in 2009.
The company plans to shut another 62 stores in the first half, on top of as many as 120 stores it said in December it would close.
Credit Suisse analyst Gary Balter said, “Selling one’s best stores and operating assets is not a success strategy, it is a survival strategy.”
To see the whole article, click here .
JJS: Just as Sears could survive by switching to real estate, so could all of society. Society could recover and share all the money that its members spend for the land they use, and forget about taxing one’s labor or capital. This geonomic formula would also help settle the issue of gentrification, or more broadly: to what use should each site be put?
Changing the use of land always upsets somebody. Humans displaced other animals, herders displaced hunter/gatherers, farmers displaced herders, houses displaced farms, and high-rises displaced houses. It’s a process that must go on as long as population grows, and might continue as income continues to rise, too.
On the plus side, changing land use does create an opportunity to put locations to best use, to use the latest construction techniques, and to express original esthetic tastes. More people can participate in making these decisions as equals when everyone gets a share of the region’s site value. Dispersing these “rents” means they won’t collect in few pockets, overly empowering those few recipients, but instead will endow those who now are marginal, making it more affordable for them to stay put or at least compensating them if they decide to move to a less expensive parcel, where one’s rent-share can be stretched much further.
Editor Jeffery J. Smith runs the Forum on Geonomics and helped prepare a course for the UN on geonomics. To take the “Land Rights” course, click here .
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