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Model for paying for land without paying for land  RSS feed

 
Andrew Scott
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Location: Boreal Alaska
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In a previous post, I alluded to a concept we've been working out as a sort of loophole around one of the biggest barriers to permaculture and intentional community for many people: access to land.

Caveat: This is designed to utilize Alaska's Permanent Fund dividend that's paid out to all residents annually. While most of us are anti-oil, and the Permanent Fund relies on oil revenues, this does fit with the principles Georgism, an analysis we are sympathetic to.

Long-story short: We pool dividend payments ($900 per resident in 2013) to pay for land and taxes. Of course, there are down payment, financing, and timing issues specific to each case, but here is how it might look:

Proposed Initial Contribution Scenario:
Initial land cost: $15,000 (not unreasonable for 5 acres in parts of AK)
Fred: $7,000 and arrives year 0
Betty: $3,000 and arrives year 1
Wilma: $1,000 and arrives year 2
Barney: $1,000 and arrives year 1
Mr. Slate: $1,000 and arrives year 5
Uncle Tex: $1,000 and arrives year 0
Dino: $1,000 and arrives year 0
Bamm-Bamm: $0 and arrives year 0
Arnold: $0 and arrives year 0

If we consider $1,000 as a basic "membership" fee, Fred is "owed" $6,000, Betty $2000, and Bamm-Bamm and Arnold "owe" $1,000. Wilma, Barney, Mr. Slate, and Uncle Text are square, and exempt from the rest of the discussion.

To keep the barrier of entry low, non-feudalistic, and non-hierarchical, we would like to avoid a strictly defined entry fee. Alaskan residents (after 1 year) receive a state dividend (ASD) ranging from about $800-$2,000 due to state oil revenues.

Option A: Those paying no up-front cost would commit to have their first year's ASD put into a group fund. Regardless of that year's dividend amount, it would go to a group account. The group would then annually reimburse Fred and Betty from any surplus in this account until their respective $6,000 and $2,000 are refunded.

Option B:
(includes assumptions of Option A, and extends it)
All members staying on the land long-term would commit to having their ASD contributed to the group's account.

In the example above, Fred and Betty would still be reimbursed from the group's account surplus until they are even. The account would simply grow faster.

The desired end is to continue to use the group's account to 1) pay taxes. 2) pay for land-related expenses. 3) roll surplus into purchase of more land to extend land base of the community.


In the above example, we have 9 individuals. Assuming all individuals stay in Alaska for enough of the year to qualify for the Dividend, that's $8,100 in annual income. For the sake of simplicity of math, lets ignore taxes on the dividend and land. The $8,100 works out to a $675 monthly. Not much if you're paying for a McMansion, but it's a different story when purchasing raw land. Another way to think about it is that $8,100 per year allows the purchase of another $16,200 property every 2 years.

Our group is actively working on implementing this strategy, and would be happy to hear the pros and cons we may have missed. Interested persons are welcome to join us over at our Facebook group, in this thread, or PM me. Our stated biases are 1) hunter-gatherer cultures as a model, 2) "paleo" aka, relatively unprocessed plant and animal foods, and 3) permaculture (as roughly described in this permies thread).
 
C Lamson
Posts: 10
Location: western Washington
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Alaska has state income and federal income tax.
 
Andrew Scott
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Location: Boreal Alaska
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The following was kind of buried in the middle, but yes, that's a consideration

Andrew Scott wrote:For the sake of simplicity of math, lets ignore taxes on the dividend and land.

 
C Lamson
Posts: 10
Location: western Washington
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You need to live a year before to receive the dividend and you apply for it.
 
C Lamson
Posts: 10
Location: western Washington
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Land at 15,000 and fred at year 0 pays 7,000 ; who is going to pay the rest? Fred may get the dividend in year 1, right now its at 900.oo. your numbers dont work out right.
 
Andrew Scott
Posts: 113
Location: Boreal Alaska
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C Lamson wrote:Land at 15,000 and fred at year 0 pays 7,000 ; who is going to pay the rest? Fred may get the dividend in year 1, right now its at 900.oo. your numbers dont work out right.


Please forgive the ambiguity. The arrival years are largely irrelevant for this example, and I didn't make that clear. They are a remnant from previous discussions about people who wanted to pay up-front, but not arrive right away. In the example, it was intended that everyone is contributing at year 0, but some people may not arrive immediately due to winding down other responsibilities.
 
C Lamson
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Location: western Washington
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9 people on 5 acres is gonna be a pain in rear. I think it will take five or more years to get repayed. Most that money would go to taxes.

Half the year is dark. I think your going the hard way of paying for land. Read through the alaska website and ask questions of them.




 
Andrew Scott
Posts: 113
Location: Boreal Alaska
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C Lamson wrote:9 people on 5 acres is gonna be a pain in rear. I think it will take five or more years to get repayed. Most that money would go to taxes.

After living on a sailboat for 3 years, I'm less of a princess about space than some people. I guess for those who live upstairs at Downton Abbey, only having half an acre per person might feel cramped.

C Lamson wrote:I think it will take five or more years to get repayed. Most that money would go to taxes.

I mean, examples for simple math are examples for simple math. It's a concept, but if you want to get technical, exactly 0% would go to state and federal taxes for people making less than whatever the cutoff is. I'm not certain without looking it up, but it's something like $10,000 per year per single person. That's plenty of income for a hybrid subsistence hunter-gatherer + permaculture scenario.

 
Andrew Scott
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Location: Boreal Alaska
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C Lamson wrote:Half the year is dark. I think your going the hard way of paying for land. Read through the alaska website and ask questions of them.

I lived in Alaska for years. No biggie. But again, I understand that some folks are accustomed to champagne whatever and caviar dreams.

I posted this to introduce the concept, and hopefully get feedback on the concept. Whether or not Alaska is too hard and scary for individual X or Y, or whether 5 acres is big enough to fit 12 McMansions on is kind of outside the scope of the concept.
 
Benett Freeman
Posts: 32
Location: Travelling around Europe
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Andrew, I think your ideas are a welcome oasis in the sea of recycled triteness that is the Internet.

I've posted a lengthy reply on your other thread about the community itself.

I'd just like to say on the specific issue of funding that I think if you have to go through 'official' channels to get to Zion, you'll end up with the spirit of those channels in your community.

Have you thought about ignoring them entirely? Finding places in Alaska (or elsewhere) where no one is likely to bother you will ever go?
 
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