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By Keith Whitaker
#7183
One of the greatest divisions in our human societies has always been between those that have and those that have not. Social and political systems have convulsed and collapsed, or transformed and emerged based on the debates, discussions, conflicts and battles over the 'ownership' of our collective home - the land, the water, transportation routes and means of production.

The conflict between Socialism/Communism and Capitalism/Democracy has cost many their lives and threatened our survival.

What I am imagining, is a very simple, quiet movement, that strikes at the very heart of the inequity inherent in a divided class system: ownership. What I suggest is that individuals and/or groups begin purposefully buying commercial properties - execising their free market rights and priviledges - that are currently rented or leased by the owner to others who are actually living or doing business in or on the property.

The next step would be to turn around and sell the property to those individuals who are already using it productively for business or living space.

The most critical element of this plan would be the contract for sale. The sale would be contingent upon a legally binding agreement that the property could only be sold for owner occupied use, and that this same contingency would be included int the contract for each future sale. Failure to do so would result in forfeiture of the property to the previous owner without compensation. (I initially imagined this process as being conducted or initiated by a charitable foundation, which would add forfeited properties back into the pool of properties available for sale to owner-occupiers.)

This could happen now, but property users are less likely to act without direction and support, or at least an explanation of the benefits and risks.

Anyone who has had any experience with commercial real estate will know that one of the first and fundamental principles of real estate investment is 'positive cash flow'. To translate this concept for clarity: positive cash flow means that you get paid more money than you have to spend. Essentially, the rent or lease on most commercial properties is not only sufficient to pay the mortgage (buy the property) and the expenses (maintain the property), but provides additional income (positive cash flow) to the property owner, as well. It is this 'additional income' that is the germ of many enduring social problems.

This is compensation (and, yes, this does connect directly to the philosophy of "from each according to his ability, to each according to his need", but with a free-market American twist) that is received without being earned. That is, the owner gets paid - in many cases entirely supported - even though they have produced nothing, contributed nothing to society, not performed any service, while the renter or lessee sees a portion of the proceeds from the real work or service they provide converted into profits for the landlord.

Remember: The lessee is already paying for the purchase of the building and for its maintainence. The lessee is already paying whatever real cost there is for building management and administration. What I am talking about is the additional percentage - the 'positive cash flow'. This becomes particulary egregious once the property has been paid for and there is very little real expense to the landlord. Have you ever known the rent to go down?

The benefits to the individual citizen would be significant. Vast amounts of money and, therefore, time would be freed for more meaningful and creative pursuits. Society would gradually be allowed to evolve in a positive and beneficial way.

The benefits to small business would be enormous. (It was actually an article in my local paper, describing the struggles of several local retailers in the face of exhorbinant rents, that spurred me to post this today).

As an example: when I moved my small printing business into a warehouse space in Berkeley 17 years ago, the owner of the building had just purchased it for under $200,000. By the time that I moved out 10 years later, I had paid nearly twice that amount in rent. This meant that my labor had not only paid the cost of buying the building, but had supported the landlord in the process and left them with a fully paid for, revenue-generating asset. I, on the other hand, had to close down my operations and put a half dozen people out of work.

Small businesses constantly struggle to survive and, with few exceptions, rent is one of the largest bills they have to pay. Many, many Mom and Pop businesses have disappeared because they couldn't keep up with the landlords appetite for 'positive cash flow'.

If small businesses were encouraged to purchase the property that they use, and it that purchase were facilitated, it would allow small, community oriented business districts to keep their small, locally-owned shops which would, in turn, enhance the quality of life of everyone who lived and worked and did business in the area. These business owners would be allowed to thrive, which would make higher wages possible for their workers (unlike corporations who are required by charter to maximize profit for their shareholders, most small business owners would love to be able to offer better salaries to their co-workers - who are often their friends and family.)

This process would be self-reinforcing and would cost very little to maintain. It will take some capital upfront, provided by thoughtful individuals, or through donations to a foundation which would, in turn, administer the program. It can be incremental, due to the fact that each small piece of property that is converted in this way would be permanently removed from the capital base of the wealthy and returned to the real end user. It doesn't matter how long it takes; once the tide is turned the ultimate result is ineveitable.

It could be something as simple as a retiree deciding that instead of buying a mini-motorhome this year, she will buy and resell the four unit apartment building down the street and travel with a tour group instead.

Or it could be that a local business association decides to pool the resources of local businesses to purchase the commercial property that has just been put up for sale - a process that will eventually result in true community ownership of their common home.

I continue to believe that creativity will eventually triumph over greed and mediocrity and, as soon as my business is sufficiently successful, I intend to promote that process by starting a foundation that will do exactly what I have described.

If there are any community minded lawyers out there who would be willing to advise us (communally) on the details of how a contract could be crafted, I would love to hear from them...

Reward: I would love to see this process begin to grow and flourish in my lifetime!
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