Baby Boomers to Blame for the Debt Crisis?

Surprising good piece at CNN about whether the ageing of the baby boom generation is responsible for the debt crisis

Good quote
‘any good demographer would have told you 20 years ago that we would be hitting the wall around now’ (William Frey, Senior fellow in the Metropolitan Policy Program at the Brookings Institute.)

Im sure in 20 years time the economic history books will be stressing structural issues from demography, peak energy, uneven development and inequality, and capture of elites by the financial sector, over and above ‘stupid’ bankers, and ‘dumb’ politicians. Stupid and dumb forever and always in history.

You cannot get away from that the Baby Booming generation is the main recipients of rentier income from land, from stocks, and from transfer payments from taxpayers.  Whilst their children’s generation is the main payers of rent and taxes with limited potential to save,

Duty to Cooperate in Action (or not) – South of Oxford

The RRS for the SE, the SE Plan was subject to a successful JR on part of the plan relating to the ‘South Oxford Strategic Development Area for 4,000 homes- just over the border in South Oxfordshire, on the basis that a deletion of green belt should be subject to a ‘strategic’ review of all locations around Oxford and that should be subject to SA/SEA.

The Treasury Solicitor (TS) indicated in an E-mail of 18 February 2010 that, following precedent in the East of England, he was minded to delete both the SOSDA proposal for 4000 houses and the Central Oxfordshire subregional total, but not to make any reduction in the overall region-wide total for South East England. Not all the parties to the proceedings were content with that wording and a formal Consent Order has not been concluded. On 12 May 2011 the TS wrote to Sharpe Pritchard, Parliamentary Agents, to indicate his view that, in the light of the passage of the Localism Bill, a Consent Order is unlikely to become necessary and asking the parties not to bear any unnecessary costs while the proceedings are effectively in abeyance.

However this was all prior to CALA II.

The Inspector asked going into the South Oxfordshire EiP

Despite this, some believe that the City will eventually outgrow its capacity for growth within its boundaries and will therefore require some form and amount of related development to take place somewhere beyond them. If a statutory duty to co-operate is enacted, joint working between the City and its neighbouring authorities would be required to resolve this matter. However, it is not currently clear when this issue would need to be addressed, nor by what mechanism any such work would be set motion. Similarly, it is unclear what – if anything – a sound South Oxfordshire CS would currently need to say about this matter. Comments will be sought on this issue.

S Oxon replied

If [Oxford] outgrows its capacity for new development within its boundaries it would be appropriate to discuss with neighbouring authorities the opportunities available for growth outside the city boundaries. If a duty to co-operate is enacted, as we are led to believe it will be, then all the authorities on the city’s boundaries will need to be involved in the process. The process would need to follow any guidance available at the time and to include an exploration of all the options available, with sustainability appraisal and appropriate assessment of those options. Without an overarching regional tier we anticipate that Oxford City Council, the authority who can identify the need, or possibly the Oxfordshire City Region Local Enterprise Partnership could initiate this process, this may be made clearer through forthcoming legislation.

It is clear from the earlier information supplied by the Council to the Inspector relating to the High Court challenge that the SEP policy for an urban extension to the south of Oxford effectively has no status. If an urban extension to Oxford is required all options around Oxford need to be explored. Without a regional agency to initiate the process and in the absence of any new guidance it would be inappropriate to refer to the urban extension in the South Oxfordshire Core Strategy unless reference has been made to the need in the Oxford Core Strategy and in core strategies for all the other authority areas affected.

And Oxford City Commented [The core strategy] needs to acknowledge that there is a sub-regional housing need, a substantial part of which may have to be accommodated in its area. The need for the 4,000 dwellings has not simply gone away.

The inspector concluded in a preliminary note (the examination concludes in Nov)

I consider that SOSDA raises no fundamental soundness issues for the CS. The only outstanding issue could be a limited one:

whether or not a sound CS needs to commit SO to working with its sub-regional neighbours to find ways of catering with the situation that could occur if (as suggested by the evidence considered at the SEP examination) the City eventually outgrows its capacity for growth within its own boundaries. However, the recently-adopted City of Oxford CS does not refer to SOSDA and it is currently unclear when the potential future growth needs of the Oxford sub-region would need to be further addressed, or by what mechanism. Consequently, this does not appear to be a current soundness concern, but a potential one for the future which would need to be addressed by any then-current ‘duty to cooperate’.

[I note that there is no evidence or suggestion that South Oxfordshire’s own ‘local needs’ require 4000 houses to be located in the Green Belt on the edge of the City Council’s area.]

The inspectors reasoning is, with respect, deeply flawed. The adopted core strategy for Oxford implies a building rate for the city well below the housing need from the latest HH growth figures. Well before 15 years there will be a need for some growth in the Central Oxfordshire area which will require a strategic review of the Green Belt. The inspector’s concept of a ‘current soundness concern’ is a flawed concept. Plans have to be sound over their lifetime, otherwise they could just have a 1 year housing supply.

If the government’s protestations that the ‘duty to cooperate’ will bite then such mechanisms will need to be considered at the point of examination and enacted at the point of adoption. This will become a soundness test when the NPPF is finalised but will also be a legal test when the localism bill gains legal ascent, and this clause is enacted, likely this autumn prior to the examination closing.

If a core strategy is found sound when there is no proposed joint-working arrangements and no path to solution for meeting Oxford’s needs that it will make a travesty of this clause of the localism bill.

There is a neat solution. The inspector should suggest that the Core Strategy be adopted with the following changes

-A commitment to a joint committee arrangement between the districts, city and county (note LEPS cannot be members of such committees by law, they are irrelevant)

-A joint strategic review of sites in Central Oxfordshire and the Oxford Green Belt, including a Joint SA/SEA

-Early review of the South Oxfordshire Core Strategy, to adopt within 3 years, to enact any necessary changes

-As Green Belts according to PPG2 need to be permanent it cannot be guaranteed that the South Oxford Strategic Development Area will or will not be needed over the long term. As such it should be de-designated and re-designated as strategic reserve land (white land), without prejudice to any findings of the joint working arrangements, and in the meantime the presumption against development should apply as per PPG2.

-Phasing policies for other housing sites in the District should be adjusted accordingly, sites in the medium-longer term elsewhere in the district might not be needed if a joint review finds in favour of the south of Oxford site.

Indeed even if the RSS were to be revoked this should take place as it is necessary both to comply with Planning for Growth, PPG2 and the Suty to Cooperate.

Road turned Waterfall is laughing stock of Iranian City

France 24

It was meant to speed up inner-city traffic, but on rainy days, the brand-new expressway in the central Iranian city of Rafsanjan turns into a giant urban waterfall. Our Observers say  the road is an example of botched engineering and construction work at its worst.

The highway, which passes under Rafsanjan’s Shohada (Martyrs) Square, in the city centre, was inaugurated with much pomp in May 2010, during an official visit by the Minister of Culture and Islamic Guidance Mohammad Hosseini. At the time, Rafsanjan Mayor Ali Akmbar Pourmohamdi declared that the project, which cost an estimated 1.7 million euros to complete, had required a year of preparation and over eight months of construction work. According to Pourmohamdi, the underpass would reduce traffic jams in the city centre by 60 per cent and boost the city’s economic development.In reality, practically the opposite has occurred. At the first sign of heavy rains, Shohada Square is flooded with a torrent of water that cascades onto the underpass from the bridges above. Traffic slows to a crawl as smaller vehicles are forced to change streets.Astonishingly, city authorities appear to have chosen to ignore the problem, going as far as to forbid local media outlets and officials from reporting on the flooding. 

Pickles Localism U-Turn on Landmark Binhamny Farm Bude Appeal

This is a much awaited appeal, as it is a redetermination of one of three Cornwall appeals from last year.  Originally refused last year on the grounds that housing targets were a local matter, the SoS disregarding the . This was challenged in the light of CALA and the recovered appeal has had to be redetermined.  However in this case there was no finalised revised Regional Strategy.  This appeal then turns on the issue of how to assess 5 year housing supply when the development plan is very out of date.

The Secretary of State agrees with the Inspector that, although RPG10 and saved SP and LP policies are formally part of the development plan and therefore material considerations, they are all significantly out of date…

The Secretary of State has had regard to the Inspector’s comments on the ‘Proposed Changes’ version of the Regional Strategy (RS) for the South West 2006 – 2026… He notes that the Inspector concluded that the Proposed Changes were at an advanced stage and therefore a material consideration which should be afforded significant weight … However, given that the Proposed [RSS] Changes document has now been abandoned in light of the intention to revoke regional strategies, the Secretary of State does not consider that it should be given weight as a material consideration in its own right. He has, however, had regard to the technical evidence that informed that document in so far as that evidence has not been overtaken by more up to date information.

The Secretary of State considers that the main difficulty in determining this appeal is that there is no up to date development plan housing target against which to measure land supply. He has grappled with this issue very carefully…. he agrees with the appellant’s recent representations that the demographic base for that target is out of date.

Turning to recent evidence of need, the Secretary of State notes that the Council’s Core Strategy options consultation put forward three possible levels of housing growth for Cornwall as a whole – high, medium and low. …for Cornwall as a whole there is currently 5.5 years supply against the low growth option, a 4.3 years supply in the medium growth option, and only 3.7 years supply in the high growth option. He also notes that, for the area covered by the North Peninsula Housing Market Assessment (HMA), there is only 3.4 years supply in terms of the HMA build rate. Moreover, for the former North Cornwall District and for Cornwall as a whole there are only 3.4 or 3.5 years supply respectively in terms of the 2008-based household projections, albeit this is in terms of households rather than dwellings and the projections are not policy-based. Taking into account all the most up to date evidence, the Secretary of State considers that it would be appropriate todetermine the appeal on the basis that currently there is not a 5 year housing land supply.

the Secretary of State agrees that the appeal site would be an ideal site for employment and retail uses as well as for housing

The March 2011 Statement Planning for Growth indicates that: “Government’s clear expectation is that the answer to development and growth should wherever possible be “yes”, except where this would compromise the key sustainable development principles set out in national planning policy”. For reasons already given the Secretary of State does not consider that the proposal would compromise any such principles.

The Statement goes on to say that, when deciding planning applications, account should be taken of “the need to maintain a flexible and responsive supply of land for key sectors, including housing” and Local Planning Authorities (LPAs) should “ensure that they do not impose unnecessary burdens on development”. As already noted the Cornwall Core Strategy has progressed slowly and will not be adopted before 2013, and the Bude Framework plan still later. In the circumstances of this appeal, the Secretary of State considers that waiting until land allocations at Bude have been finalised would be an unnecessary burden on development.

The Statement also advises that, wherever possible, planning applications should be approved “where plans are absent, out of date, silent or indeterminate”. The Secretary of State considers that this advice is relevant in this case as the adopted development plan is out of date

The appeal proposal is not in accordance with saved policies in the development plan. However the development plan is significantly out of date and in some
respects its policies have been overtaken by more up to date national policy. … Currently there is not a 5 year housing land supply. Accordingly, the process in paragraph 71 of PPS3 has been triggered so that planning applications such as this should be considered favourably having regard to policies in PPS3, with which there is no conflict in this case. The proposal is not premature and it sits well with the recent Ministerial Statement on Planning for Growth.

Overall, the Secretary of State concludes that the material considerations in favour of the appeal outweigh the limited conflict with the outdated development
plan. [The appeal was allowed]

So where the demographic base for calculation of the 5 year supply is out of date then other material considerations indicate that it should be calculated on the basis of more up to date evidence, informed by the 2008 HH projections.   This is likely to be the case for many LPAS if RSS is abolished as old local and structure plans could be anything up to 15 years out of date.  It also shows, as we have stated on here, the untenability of relying on ‘option A’ figures sumbitted to RSS as these were based on pre-2008 projections. 

The SoS did not state the weight to be given to the three growth options.  Presumably a low growth option was to be given limited weight in the light of ‘Planning for Growth’?  It is clear however given the shift in national policy the scheme would probably been given consent even if had been found that the area had just over 5 years supply, given its suitability and the presumption in favour of sustainable development.  The SoS may be challenged on this issue at JR but consider there is no chance of success.

Clearly, as was always the case, LPAs should be basing their future plans on realistic growth options derived from the 2008 based household projections – and if the migration assumptions impact on other LPAs they will need to demonstrate the ‘duty to cooperate’.

So despite the proposed revocation of RSS it is just like RSS never went away – because the underlying housing requirements are still there and the government is in favour of housebuilding.

And despite the rhetoric against imposed housing targets they will still be imposed, either by inspectors saying plans are unsound or by the SoS or an inspector on an appeal.

Finally despite the call by ministers for national policy to be framed in a way that the non-professional can understand when national policy on 5 year supply is inoperable and plans are out of date, as it may be in the majority of cases, will will require a raft of planning appeals, attached to the back of the NPPF lever arch file, to fill in the gaps and inconsistencies.  A system even more impenetrable to the public.

This was a good housing site recommended by officers and refused it seems solely on the basis of public opposition, in order to lick the can down the road on making tough decisions about housing.  It is a good decision.

Capitalism’s Last Frontier #23 Comte & the Act of Cultivation

Charle’s Comtes’ Traité de la propriété (1834) is the single most important work on the theory of, justification for, and origins of property.

His theory was both an historical explanation of the emergence of private property and  an ex-poste justification of how private property could be legitimate even when it had been acquired through force.  It was framed at the time of the restoration of the French monarchy when the issue of whether property rights should be restored was febrile.  Comte also criticised the popular political economists of his daym such as Say, for taking the issue of property rights as given, and outside the realm of political economy itself.

His approach was both an advancement on earlier ideas based on ‘first use’ but also a sharp break from roman legal traditions that occupation and control was itself justification for property rights.  This was for Comte abhorrent bas it was used as a justification for slavery and also historically indefensible, given contemporary liberal historians such as Thierry were documenting the acts of accumulation by dispossession of the Normans and Medieval kings.  Ideas of great rhetorical force at a time when the argument for return of land seized from nobels during the French revolution were made by the forces of conservatism.

Comtes argument then was that property rights have been often illegitimate acts of looting, but that, none-the-less, some rights to private property could be justified.  What is more he recognised that ‘first use’ was rather rare by then, confined to the edges of colonisation,  in the privatisation of national property, and occasionally in industry when new goods were invented. A far more common method of acquiring property was by work and exchange.

Very rarely amongst thinkers of his age he did not automatically assume that seizure of lands from traditional trible hunter-gatherers was legitimate.  Rather his theory was took that in such societies there were property rights but that these were not individual but “national” or communal and included established hunting grounds, and recognised tribal boundaries. So Comte challenged the legitimacy of most European settlement in the other continents.

Comte also made a radical break with the homesteading principle by arguing that it was not obvious that this created an absolute property right, including when land was held in communal ownership by other peoples.

Comtes theory took one step back from the concept of property by first developing the idea of appropriation

“(t)he action of an organised being who joins (unit) to his own body the things by which he grows, strengthens and reproduces himself” and as “the action by which a person seizes, with the intention to enjoy and dispose according to his wish, a thing susceptible of producing directly or indirectly certain enjoyments.

The process of appropriation involves the transformation of physical objects into a part of oneself for the satisfaction of human needs. Denial of these needs was a denial of human rights.

A communal “national” property consisted of non-scarce goods, such as land in hunter-gatherer societies.

Agriculture being much more efficient than hunting and gathering, private property appropriated by someone for farming left remaining hunter-gatherers with more land per person, and hence did not harm them. Thus this type of land appropriation did not violate the Lockean proviso – there was “still enough, and as good left.” 

Comte rejected as absurd the concept of a social compact by which each individual renounced their original equal right of all to property in a state of nature into packets of privately owned land.  He considered it historically inaccurate and illogical.  Rather as one of the founders of sociology Comte sought a sociological explanation

Certainly the concept of ‘first use’ is incompatible ith that of a social compact.  First use assumes that the individual cuts land from the wilderness, whilst the concept of a social compact assumes and existing common ownership.

Comte sought to explain how common ownership could develop into individual ownership and by what kind of social process.

Comte argued that what makes agriculture so different from hunting and gathering and so difficult to get started is that a time lag is introduced between production and final consumption. The labour required for hunting and gathering might be rewarded in a few hours or at worst a few days, the reward from agricultural work will not come for some months. During the months between clearing the land and the first harvest the would-be agriculturalists needed provisions to provide subistence until the harvest is ready. 

This cruso economy investment argument is helpful in considering the immediate barrier to cultivation.  However it is not fully convincing.  wndering hunter gatherers could have gathered self seeded crops at a set time each year, and the act of gathering would create further seeds.  Hence no initial investment would be needed.  If creation of breads required sedentism then intensification of gathering and proto-cultivation could eventually have led to a suplus of seeds.  

Comte considered how could the capital could be acquired to pay workers for their labour until the product can be sold or the crop harvested.  How could an individual aquire it outside the tribe?  Because of these factors Comte concludes that the transition to agriculture (and thus private property) has to come about cooperatively rather than individually. In other words there is not a clean break between the two ways of producing.

He believed that in transitional stage this “boss” or “chef de l’enterprise” is a cooperative of one or more families of a tribe. It is the cooperative who introduce a more specialised division of labour and make the necessary “economies” to accumulate the capital necessary to become cultivators. Once family cooperatives become established it was but a short step, he thought, to the full privatisation of land and farming as family members gradually spilt off to farm individual plots of land.

Before settled agriculture based on private property can emerge there must be a transitional stage of agriculture based upon a mixture of communal and individual labour and communal and private property.. His analysis is based upon ancient Roman accounts of the Germanic tribes, travellers accounts of North American Indians and the early days of the English colony in Virginia. 

The concept of a transitional famial stage of land ownership is important.  But Comte is unconvincing over the rationale for this then becoming individually owned.  We will consider this in the next section.

Whole Wild West Town for Sale – $799,000

Scenic, South Dakota (thats its real name)

Comes two jails (one working, one not), a post office, convenience store, saloon, bunkhouse, dance hall, museum, a historic train depot, two homes (one stick built, one modular) and 40 undeveloped lots, 8 abandoned homes, two abandoned schools and a former gas station. Perfect movie set, or for people that like dressing up like Carry on Cowboy at weekends.

Go to

Milton Keynes wastes £600,000 by stopping work on half built Traveller Site

Work on the 10 Pitch site at Fenny Lock has been suspended by the conservative cabinet, following a change of administration, £600,000 having already been spent on clearing woodland in preparation for the development.

Cabinet member responsible for property and accommodation Peter Geary said he didn’t want to use the reason that money has already been spent to continue to build the site, if the remainder could be better used elsewhere.

The new Conservative administration has decided to suspend any works until a ‘value for money’ review has been carried out into whether the £1.8million assigned for the project could be better spent elsewhere. on building more homes for those waiting for houses in the city.

A Government grant of £1.8million had been allocated to MK Council solely for the purpose of building a travellers’ site, but the ending of ring fencing of

Isreal House Price Protests Growing – ‘Scent of Arab Spring’

Russia Today – see previous report here also

Tens of thousands are taking part in nationwide mass protests in Israel to demand the government provide cheaper housing and lower the cost of living. The biggest protest yet, centered in Tel-Aviv, is planned for Saturday night.
On July 25, 30,000 people marched through Tel-Aviv demanding a decrease in housing prices. Some of them were carrying banners reading “Mubarak. Assad. Netanyahu.” Police arrested 42 activists – an unprecedented case for Israel.
On Wednesday Prime Minister Benjamin Netanyahu had to postpone visit to Poland due to the housing crisis in Israel
In Tel-Aviv, on the Rothschild Boulevard, people have been living in tents for weeks now protesting against expensive housing. Tent camps have been set up in various Israeli cities by students.

Israel is changing in the most inspiring and uplifting way in unprecedented wave of demonstration throughout the country and it is only the beginning of the process emerging in Israel, believes Hagai El-Ad, executive director of the Association for Civil Rights in Israel.
“People are demanding social justice on a broad variety of issues, including housing, but also health, employment and qualities of society in general,” he said.
What has begun in Israel is a very arrogant response to the Arab Spring protests which inspired Israeli protesters with a sense of “people power”, that “the country belongs to the people, and the people are rejecting economic disparities in the senseless privatization that we have seen over the last 15 years in this [Israel] country.”

Palestinian-Israeli journalist Aziz Abu Sarah agrees there is a strong connection between the present protests in Israel and the chain of revolutions across the Arab states.
“People in Israel, just like everywhere else, saw that people… can make a difference, can make a change,” he told RT. “They were using the same rhythm, the same chants almost that in Egypt people used. So, you can see a lot of parallels.”
The journalist points out that the way the protests started is almost identical to what occurred in Egypt, Tunisia and other places:
“[It] started through Facebook, through social media – that’s how people organized completely in the beginning by young people in Israel, students, people who feel that they have no future, people who feel that they can’t afford living here. So, there are a lot of parallels and things that people, the young in Israel are learning from the protests that happened in Egypt.”

Florida Land Scam Targets Gullable Chinese Investors Seeking Visas

Selling small plots at inflated prices online – such land scams are not confined to the UK.

With speculative property investors now restricted in China the cash rich have been looking abroad – and the foolish have been looking at that granddaddy of busted Property Markets Florida.

Not just any part of Florida mind but the epicentre and arguably one of the first places in the world for house prices to crash (at end of 2006) Lee County Florida.

During much of the 2000s, Lee County, Florida experienced some of the nation’s steepest climbs in housing prices. Since then housing prices there have dropped off the cliff….“Lee County rode the housing wave like a rocket,” McCabe said. “Fort Myers one year had the highest price appreciation rate in the country—47 percent in one year. There was no justification for it. The areas that went the highest have crashed the hardest. You’d think these people, especially, would have learned the lesson, and here they are trying to do it all over again.” Heartland Institute

Nearly 18% of homes in Florida are currently unoccupied, Florida has a huge oversupply of homes.

So what does a firm do when it has a large amount of foreclosed property on its books? One such company is United Solutions of America LLC which runs the ‘Invest and get paid’ website – which certainly doesn’t inspire confidence. It asks investors to invest in a property portfolio without having to get bothered with the details. The website offers no financial information about the company or its landholdings. The company specialises in buying up distressed and repossessed properties and then aggressively selling investments.

Earlier this year United Solutions of America approached SouFun International, Chinas largest on-line property auction site.

Its first auction was to sell one 1000sqm lot with a ‘valuation’ of $20,000. The site was sold through an online auction, which was open for bidding for two hours. Under the rules set for the auction, bidding could start from US$1 (RM3.02) and the site was to be sold to the highest bid above the reserved price of US$8,800. Within 55 seconds, 71 bids were placed that hit the reserve price. The winner selected by a lucky draw.

100 additional pieces of land sold out on July 22 from 73 Chinese buyers, One of them bought 20 pieces. 30 US investment immigration application forms for the Chinese group buyers who spend more than US$200,000.

120 new plots went on sale this week for a reserve of US$19,988 (i.e. just short of the ‘valuation’)

Even after buying the plots the owners will need to spend well over $20k on constructing a house.

A realistic price for a 10,000 sq’ lot in SW florida at the moment is $0.42 a sq’, meaning these plots are almost four times over value.

The ‘low’ initial asking price was meant to tempt in buyers, as is the visa offer. However in the US you cant get a visa by investing $200,000, outside areas of high unemployment you have to invest $1 million.

This is a scam. The properties are overvalued, the prospect of an investors visa is illusory and even if the lots were sold and built out the number of undeveloped plots on such subdivisions means that it could be 7-10 years before prices return. It is better to buy foreclosed houses than new individual single plots that no-none is developing.