china real estate local government central government

Chinese Localities Confront Centralists As ...
market controls bubble lip service irs agent beverly hood togo sex strike

IRS Lady Sqats at Home, Togo Ladies Cross Legs

Some battles have combatants more evenly matched. We trim, blend, and append three 2012 articles from: (1) Caixin Online , Aug 14, on China by Wang X. and Li X; (2) MarketWatch, Aug 17, on the IRS by A. Lewis; and (3) AP, Aug 26, on Togo by E. Godwin and K. Kaglan.

by Wang Xiaoqing & Li Xuena, by Al Lewis, and by Ebow Godwin & Kudjo Kaglan

China’s real estate market has become a battlefield for central and local government warring over policy measures.

Over the past six months local governments have introduced various policies to stimulate real estate markets, their main source of funds. This is in contrast to efforts by the central government, which in 2010 implemented controls to cool the market, something many fear was a dangerous bubble in the making.

Local governments pay lip service to the central governments curbs, but at the same time have made efforts to boost the market.

On July 16, Shenzhen, the bustling special economic zone in southern China, said home buyers could get loans of up to 800,000 yuan ($125,786) from the city’s Housing Fund Management Center and enjoy interest rates lower than what commercial banks offer.

Three days later two ministries said there would be no relaxation of housing control policies and governments at all levels should firmly combat rebounding home prices. Then in late July, the State Council, the country’s cabinet, sent eight teams to 16 provinces and cities to supervise the implementation of its housing purchase and mortgage restrictions.

To some degree, there are signs local governments are prevailing in this battle of wills. Housing prices in 70 out of 100 cities nationwide jumped in July.

“In 2011, it was the battle between developers and central government,” said the vice president of a large real estate company in Shanghai who declined to be named. “Now it is a fight between the central and local governments.”

Local governments have seen a decline in land transfer fees, revenue local governments receive by selling land to developers.

In the first half of the year, the amount raked in for land transfer fees in 300 cities was 652.6 billion yuan , down 38% compared to the same period last year. In Beijing alone, the first half figure was 14.5 billion yuan, down 55.65% year on year.

This year, cities around the country have made attempts -- many successful -- to warm their local property markets.

In February, the housing regulatory bureau of Shanghai said it would allow non-native residents who have lived in the city for three years to buy a second home. Days later the city government killed the idea, but those in the city who want sales to increase have been able to find ways.

In July, Nanjing, the capital of the eastern province of Jiangsu, put 51 plots on the market. Then it allowed first-time buyers to get low-interest loans from the city’s Housing Fund Management Center.

More blatant was the approach of Yiwu, in southeastern China’s Zhejiang Province. Officials in the city simply suspended the central government’s housing curbs for seven months.

The Yiwu government responded by saying the controls would continue to be implemented and the Zhejiang government said it would hold those responsible accountable.

And the skirmishes continue.

To read more

JS: It’s not just local authorities who stand up to federal law, it’s also federal employees -- whether out of convenience or conscience.

IRS Agent Beverly Hood and her husband filed for bankruptcy in December 2009, and they lived in a half-million-dollar home in Greeley, Colo., for nearly two years without making a mortgage payment.

Hood is a law-enforcement officer. She has interviewed real estate agents, appraisers, title companies. and home buyers. It’s her job to recommend fraud cases for prosecution, including mortgage-fraud cases.

as the bank initiated mortgage-foreclosure proceedings, Hood and her family lived mortgage-free in their 5,000 square feet home. Plus, she maintained her six-figure income from the IRS. In addition, she held more than $200,000 in a government employee 401(k).

Hood’s financial problems stem from her husband’s enterprises. He was a partner in a couple of Greeley restaurants that simply got wiped out in the financial crisis.

It’s often been reported that banks have been slow to foreclose and that people can miss payments for a year or more before they finally are evicted. It’s a trend that been dubbed “squatting in your own home.” Banks have not only been overwhelmed by a wave of foreclosures but stymied over the years by foreclosure moratoriums and delays from a robo-signing scandal.

She is now a senior analyst of planning and strategy for the IRS. Her husband is working for an East Coast restaurant chain. They have shedded their debts in bankruptcy court.

To read more

JS: Some can oppose the state with impunity, others must get more creative.

The female wing of Let's Save Togo, a civil rights group, is urging women to stage a week-long sex strike, withholding sex from their husbands or partners, to demand the resignation of the country's president. The strike will put pressure on Togo's men to take action against President Faure Gnassingbe.

The group is following the example of Liberia's women, who used a sex strike in 2003 to campaign for peace.

Gnassingbe came to power in 2005, following the death of his father, Eyadema Gnassingbe, who ruled the West African country of 6 million people for 38 years.

Earlier this month, two anti-Gnassingbe protests were dispersed by police using tear gas and more than 100 people were arrested.

"One week sex strike is too much," said Jean-Pierre Fabre of the National Alliance for Change, amid laughter from the crowd at the demonstration. "Let's go for only two days".

To read more

JJS: While ends don’t justify means, could women likewise raise awareness of common wealth? Of all the spending a society makes for the land and resources it uses? Highlighting into whose pockets that spending ends up? Because instead it could be shared a la Alaska’s oil dividend or Aspen’s housing stipend.

If society did recover the socially-generated value of land, it would remove the temptation to speculate in land. Without anyone bidding up the price of land, there’d be no bubbles; even IRS agents could avoid the necessity of squatting in their home. And local governments would enjoy enough revenue that they and central governments could quit their squabbling.

Steven Reed, the ex mayor of Harrisburg PA, in a speech this month explains how this powerful fiscal tool helped rescue his town which was once rated the second worse in all of America. His town has had a hard time keeping this successful reform in place, but that may be due to the absence of a dividend, a la Aspen, which could easily be rectified. To listen and become inspired.


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 .

Also see:

China to crack down on lavish public-funded fetes

US rich see taxes drop dramatically yet …

Buying Time: The Pursuit of Happiness

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