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Credit Where Due

The Road to Resilience

In the article in The Beachcomber about housing prices on Vashon, several things seemed clear to me:  1) demand far exceeds supply, 2) properties always go to the highest bidder, 3) low and moderate incomes lose out, and 4) everybody seems to think this is an inexorable situation like the tides or the seasons.

Actually, this system is as arbitrary as the color of your house (if you have one, that is).   Many traditional societies operate without money.  In most societies other than our modern capitalistic ones, most people manage to get shelter however primitive it might be.

Thirty years ago, Rose and Dutch Ballen introduced me to the ideas of Henry George.  A self-styled thinker, primarily in economics, he was known for the book Progress and Poverty: An Inquiry into the Causes of Industrial Depressions and the Increase of Want with the Increase of Wealth: The Remedy (1879).  Its popularity in the late nineteenth century was exceeded only by The Bible.  He earned glowing accolades from the likes of Leo Tolstoy, George Bernard Shaw, and Albert Einstein.  Many think his book was the initial spark of the Progressive Era.  When he died in 1897, he was so loved and respected that his funeral in New York rivaled that of Abraham Lincoln’s.  So why is it that practically none of us have ever heard of this guy?

Well, his basic idea would have thrown a great big wrench into the capitalistic machine.

His basic premise is that property appreciation does not accrue to the owner but to the community in which it is situated.  Say you came out to Oregon in the 1840’s and built a cabin at the confluence of the Columbia and Willamette rivers.  You may have had to gain permission from a local tribe, but the property itself would have been of minimal monetary value.  A hundred years later, your heirs would find themselves in downtown Portland, and the property would be worth many thousands of dollars per front foot.  Henry George is saying that the appreciation of that property is not due to the owner’s effort but to the community that grew up around it.  The value due to the owner of that property should be what he paid for it plus what he may have personally invested.  The rest of the appreciated value should go to the community in the form of a rent tax. With this arrangement, leaving property with potential lucrative use vacant would not be wise because you would still be subject to the rent tax.  Failing to maintain any improvements on a property would be failing to preserve the only appreciable investment you have in that property.  In any case, there would be no sitting on a property at minimal cost, waiting for the activities and investments of others to give you the opportunity to make a killing in a highly appreciated market.  Is it any wonder that Henry George and his ideas have been buried in such a short time?

Here is where all this comes together.  Besides our wonderful location on a finite island in the middle of Puget Sound, what makes Vashon property so sought after?  A large part of that is due to our community (all of us). That especially includes:  the people that take care of our mostly practical needs, i.e., teachers, clerks, farmers, fixers, cooks, cleaners, gardeners, etc., and people that take care of our mostly spiritual needs, i.e., artists, writers, musicians, ministers, naturalists, open-space preservers, friends, family, etc.  We have long said we want to live in a diverse community.  That diversity necessarily implies diversity of income.  If we go along with Henry George, we would have to say a part of the $100,000 our property may have appreciated last year should rightfully go to all the people in our community that helped create it through their productive effort.
The article in The Beachcomber mentioned the plight of members of our community that currently have no hope of affording a place to live here.  It failed to mention any possible solutions to this crisis.  If it had, it might have mentioned Vashon Household, an organization that I helped found.  Vashon Household has certainly preserved affordable housing for a fair number although far short of what is needed.  However, aside from the formation of a Community Land Trust at the Roseballen and Sunflower developments, most of what we have done has only addressed the symptoms and not the economic system that is the disease.  

If we really want to solve this problem, we need to create an adequate supply of permanently affordable housing that is outside of the commodity market.  If we really want all members of this community to be securely housed in our community, we will have to pony up.  We have ponied up for our schools, for an art center, and many other things.  We can do this with a community land trust, probably other ways as well.  The people that have helped create much of the value of your property and of this community deserve to share in that boon.  It remains for us to work out the details of how to do this, but make no mistake:  it can be done.