Everyone here knows how there aren't mortgages for raw land, few people have cash to purchase land outright, and how expensive the interests rates are for improved land with homesites and construction loans. So many lots with mortgages are under-sized for a self-sufficient lifestyle. Or the right land has a multi-million dollar house on it. The interest rates are too high, and even saving up for a higher down payment to get owner financing means the bank is profiting off of you.
Wouldn't it be great if we had our own credit union or mutual aid society? Wouldn't it be great if there were lending circles? Or a revolving fund to seed eco-villages? Or even a development company that purchased large parcels and sold lots specifically with permaculture in mind. I would much rather pay a mortgage or loan payment to an institution that had allied interests at heart than to these predators in suits. Plus, the paying in cash for properties would save everyone so much money in interest not paid. In addition, unimproved properties that foreclosed that seem worthless to banks would still have a market in our community and there wouldn't be as much speculation or loss.
Would anyone else be interested in forming such a collective? A permie looking to sell property in a few years would be a great way to kick off such a project, the mutual aid society building up it's coffers until that time, and a small interest from the sale price contributing to seeding new loans. Does anyone here know about banking and economics? Or what if 20 people in a circle could fund a down payment for two properties every year? Everybody could have that much more power to get their property sooner. It just seems like a smart thing to do. And still leaves a lot of freedom to the individual.
How Lending Circles Create Community Resilience
This kind of thing can only work when there is a very high level of person honor, hard work, and community respect. I'm going to watch this thread with interest. If it were set up like microloans so that no person was risking more than they were willing to gamble, I could see this being very viable.
I would like to think we would all live by permaculture ethics and also, payments to a lending circle would be legally binding.
I have a little saving and land in where I live is too expensive. I went looking into land in Europe , and UK and now USA just to invest into even an acre or so , for personal investment .
Can I be of any help in the Permie Development or Circle ? would permies accept working off on a land , that a non resident owns and doesn't live on ? What are the benefits to both sides ? and what are the negatives ?
Following the thread .
Basically, say, if Paul wanted to start a 501c-9 Homestead Permaculture Grange and if there were local chapters, rotating loans could be set up to promote permaculture homesteading if the loans were originated from the local chapters.
That is within the U.S. economic system, so I'm not sure but maybe by-laws could include those in the process of seeking U.S. residency? Maybe a small membership fee could cover the cost of setting up the entire system. I'd have to look into whether or not such local chapters would need to demonstrate other services as well.
We'd probably need to consult a CPA and/or lawyer to review once that was all hashed out. I will ask around to local organizations to see what they do.
It strikes me that in the long run, probably there is a place for all these initiatives to exist side-by-side, so people can enter on whatever level works or feels comfortable for them. For instance, a person with savings might not want to lend directly to someone they don't know, but they'd feel fine depositing their savings in the Permies Federal Credit Union. A group of people that want to homestead might have a serious allergy to any financial institutions (even the PFCU) or to paying interest might want to go the lending circle route. Etc. Each of these options has its uses as the article pointed out.
I believe a legal prerequisite for forming a credit union in the USA is a connection among the members, such as residence in the same town or working at the same company. Maybe the prerequisite for joining the PFCU could be taking a PDC?
Another interesting place to look for models is the area of microfinance, "solidarity lending" in general and perhaps the Grameen Bank of Bangladesh in particular. They loan mostly to groups of impoverished women in a particular village, who all make the organization's "16 pledges," at least part of which reads like a Permie manifesto:
We shall follow and advance the four principles of Grameen Bank: Discipline, Unity, Courage and Hard work – in all walks of our lives.
Prosperity we shall bring to our families.
We shall not live in dilapidated houses. We shall repair our houses and work towards constructing new houses at the earliest.
We shall grow vegetables all the year round. We shall eat plenty of them and sell the surplus.
During the planting seasons, we shall plant as many seedlings as possible.
We shall plan to keep our families small. We shall minimize our expenditures. We shall look after our health.
We shall educate our children and ensure that they can earn to pay for their education.
We shall always keep our children and the environment clean.
We shall build and use pit-latrines.
We shall drink water from tubewells. If it is not available, we shall boil water or use alum.
We shall not take any dowry at our sons' weddings, neither shall we give any dowry at our daughters' weddings. We shall keep our centre free from the curse of dowry. We shall not practice child marriage.
We shall not inflict any injustice on anyone, neither shall we allow anyone to do so.
We shall collectively undertake bigger investments for higher incomes.
We shall always be ready to help each other. If anyone is in difficulty, we shall all help him or her.
If we come to know of any breach of discipline in any centre, we shall all go there and help restore discipline.
We shall take part in all social activities collectively.
The recipients each use the micro-loans mostly to start up small income-producing activities. Each group meets weekly I believe so all members can talk about their progress and any problems they have. The cool thing is that this solidarity thing really works, their repayment rate is amazing high and apparently quite a bit higher than the traditional banks in Bangladesh that loan in the conventional way.
Obviously there would be cultural adaptation necessary, and there's also the fact that we're not talking about microcredits here but macrocredits, mostly for land, an area that seems to be userved by most banks. And of course in a developed country.
The Permaculture Development thing is also crying out for people with cash to just keep doing it, following the fine example of our own big-ol' slack-necked titan, Paul and wheaton labs. Buy some land, figure out how the community aspect is going to work (set the rules), and subdivde and sell off plots. Or whatever the equivalent is in your ideal community system. There seems to be room for a number of these things that cater to people with different talents, ages, amounts of cash to start with, and most importantly, desired living situation. I see a lot of curiosity and enthusiasm on this board with nowhere to go. All warnings apply, of course (see multiple other threads), about what it takes to set up a successful community.
But hey, in the realm of traditional property developers, ones that don't want to worry about Permie or community-building stuff, there's the example of Village Homes in Davis, California. It seems that real estate agents hate it because no one ever wants to leave (i.e. sell their house there), leaving them with no business. But for a developer, whose only interest is setting the place up, selling lots or houses and getting the hell out, it's a great track record to build on for its obvious advantages to residents, perhaps attracting a price premium or at least eco-minded buyers in a soft market.
@Bash, I think there might be some obvious advantages to both you and a potential permie tenant. For you, someone could develop your property for you in permie style, and increase its value. Obviously, you'd want to hunt around for someone you trust. And it might be a great opprtunity for some permie without enough cash at the to get on the land and start doing what they really want to do. Great idea.
I think a PDC makes sense, but I also know that I personally have to choose between PDC or putting my money towards land. It would be nice if there was a path to PDC incorporated into qualifications and not just outright already having one. Perhaps a demonstration garden could be a requirement, that the food production has to promote food forestry, no-till natural, hugelculture, or some aspect of permaculture in practice? It could even be similar to the homestead act which had requirements and terms, such as x trees planted and thriving in five years.
Some real studying of organizational models is in order about now. Local chapters could be marketed through meetups. If we got non-profit status perhaps we could even get grant monies.
I would be happy to contribute and design a website. We should gather some charter members and target some candidates for a board of directors for oversight.
Please gather questions you might have so I can make the best use of my time with them!