Changing the sale price of CDS land

[Jamie Palisades]

Land sales and prices have changed radically in the last year in SL. Many of the largest estates have much higher vacancy rates. Any estate with high vacancies risks having negative cash flow. It's common in many of them, now, to allow a new renter to buy abandoned unowned land for L$0, and "buy" it simply by starting to pay monthly tier. Caledon always has been that way; in the last year, many other estates have converted to that system.

In CDS, we've always planned our expenses based on regular monthly rental tier income from citizens. Sales revenue to CDS from re-claimed and re-sold parcels was extra, unbudgeted "windfall" income. Except when we open a new sim (and recover the costs of the Linden sim purchase price by a sales price from each lot's first owner), our budget does not need or rely on income from land sales.

We have charged the same, fixed and statutory high prices for monthly rental tier, when selling CDS land re-possessed by the Confederation government, for years. I believe those prices are now too high, and make us uncompetitive. That creates a risk of more vacancies than we can afford.

Therefore I propose that, for the rest of the 12th government term, CDS sell all future re-possessed parcels for zero (L$0), to increase our occupied rental percentage, and assure that we will have fully-rented property generating the monthly tier fees that we *do* need for our budget. A buyer from CDS would conclude their purchase by paying the first month's rental tier. At the end of the term, the next RA and government can re-examine that practice.

This change would *not* require any change to our projected budget (which estimates zero income from resales). After some conversations about this, I believe that Rose and Sudane agree with this approach as the best for our future, but they may also wish to express their views.

* Please note, this change would only affect CDS-owned land in existing sims. Citizens in any case still will have the right to sell their own land at any price they can negotiate.
* Also, please note, this is only a price proposal, and does not change or affect Rose's "land sale method" proposal.
* Also, please note, this change would be inconsistent with a price auction method of sale.
* Finally, please note, this would not repeal the law permitting special commercial land designations, which have their own method of sale and selection defined by that law.

Regards JP

[Aliasi Stonebender]

Seems reasonable to me. We've done it the way we done it because, well, it's the way it's been done (and makes sense in a "if you abandon the land, the CDS reclaims it and owns it again" way) But given the initial buy-in is to recoup the original cost of the region and we only depend on the monthly income, I see no reason to insist on it.

[Rubaiyat]

I am personally interested in this, in that I am moving my gallery from the mainland. I would love to get some land in N'stadt and with the bottom falling out of the mainland non-porn market I have few options.

Granted this is very selfish on my part, but I think it will help with occupancy in the city sim and will likely help with traffic too.

Please keep me in the loop with whatever happens with this.

[Pip Torok]

......

We have charged the same, fixed and statutory high prices for monthly rental tier, when selling CDS land re-possessed by the Confederation government, for years. I believe those prices are now too high, and make us uncompetitive. That creates a risk of more vacancies than we can afford.

Therefore I propose that, for the rest of the 12th government term, CDS sell all future re-possessed parcels for zero (L$0), to increase our occupied rental percentage, and assure that we will have fully-rented property generating the monthly tier fees that we *do* need for our budget. A buyer from CDS would conclude their purchase by paying the first month's rental tier. At the end of the term, the next RA and government can re-examine that practice.

.....

Regards JP

By all means, let's try this, and the next RA and government will doubtless re-examine that practice. With a diminishing pool of new entrants to SL, all of them nervously looking at their budgets, we can't, in all honesty, expect the result to be an eager rush in our direction.

Let's instead look at what we're aiming at. I suggest it is this:

A flow of people who are looking for, amongst others, a pleasing environment, a community in which they would feel at home, and that they had something to contribute, but, above all, somewhere where _their_ desires, concerns and aspirations would be listened to, and held to be of value.

When they find us to be such a place (begging that question!), they would be prepared to stay, and to stay for years rather than for months, to be citizens and to put down roots. In short, to feel that they have a stake in maintaining what we are, and what we stand for.

It comes down to this: how do we find them? and how do they find us?

I would suggest that we make regular representations at places like these:

-- SL Universities and Colleges of Higher Education.

-- SL Embassies, concentrating on those countries who feel proud to have a tradition of democracy.

-- Centres of Research, who have seen the role that SL plays in giving them a world-wide presence.

In these, and in maybe many more you could think of, there'll be people who are questioning their place both in SL and in RL.
I suggest they could well be looking for us, so let's go out and present ourselves to them.

What do you think?

Pip Torok

[Timo Gufler]

This is a clear improvement for the land sales process, because it makes moving on so much easier. Usually, when you buy land and later would like to move on, there is always a time-consuming struggle of selling land. Now, after the change, it will be nearly impossible to ask any price for the land, because there is L$0 land sold by the government available. Also, if you manged to buy your land for L$0, there isn't a question about getting your money back from the investment. So, if you decide to leave CDS or just like to have a break, just press the "Abandon land" button. Life can't get much simpler.

[Rose Springvale]

somehow the sarcasm doesn't translate for me. Please, Timo, recommend an alternative that makes sense to you.

[Timo Gufler]

Jamie has evidently used much time for doing research about the subject and it's very important we develop our business, instead of just holding still. The change doesn't affect to me personally so severely, but I hope those, who have invested hundreds of US-dollars in the C.D.S. land, can get away with the it.

Of course, if the L$0 sales are the trend, where the whole land business in the grid is heading to, then it will be like a suicide for us to not follow it. Still, there are for-profit estates, that seem to be able to manage with the "normal" land prices. Who knows, maybe they invest in marketing or have found some other ways to jump out. Anyway, the L$0 sales will guarantee, that the threshold of buying new land is lower, but probably the same is true for "selling" land also, that will make the C.D.S. to behave like a rental business.

And about marketing... Most of the people, I have met, know Caledon, but virtually none have ever heard about the C.D.S. Why? (And this is not a critique to anyone here.) I am sure it's not, because the C.D.S. weren't an attractive place to live. Should we change the estate name, have a bigger marketing budget or something else, to make the it more well-known...?

[Rose Springvale]

Timo,

Please put together your ideas on marketing and send them over. Most likely we've already done it, but better to make sure that we are covered than have you all think we just throw out ideas like this on a whim.

Rose

[Timo Gufler]

Marketing ideas? Ok, here are some. And again, these are more like observations than critique.

Unsold land. For some reason unknown for me there is a lot of land owned by Rudeen Edo and not set for sale. This is especially true for Monastery, where the three parcels have never been for sale and the sim has already existed for over four months now.

Classifieds. Try to search for keywords "democracy", "alpine", "bavarian", or "roman" in SL viewer search window and see what you find. For example, "democracy" resulted five items and none of them was C.D.S.

Advertisements. I am not sure if there have been an advertisement (in addition to the article) about CDS in Prim Perfect (and similar magazines).

Anzere. When I was homeless in SL, my home location was set to Anzere infohub, because I considered it the most beautiful out of all those infohubs available. Still, I didn't have any ideas there is a place with similar architecture and land for sale. Yes, there was a infobox, but it only gave a notecard, which talked something about democracy and communities. Also a quick glance over it gave an impression nobody had updated it for while. I am not sure if I had moved to CDS earlier, if there would have been an ad, with simple question like "Would you like to live in a place like this?", "How about joining us?" or "We have land for sale". And what about German, French, Italian, Spanish and Japanese speakers, who surprisingly often don't understand English well? Of course, I guess it wouldn't be bad idea to have Bavarian land for sale, before Anzere can be efficient way of marketing...

[Arria Perreault]

I don't agree with the idea to sell our land for 0 L$. I have several reasons to say that.

SL economy isn't that bad, if I believe this press release of Linden Lab (http://lindenlab.com/pressroom/releases/22_09_09). The volume of money exchanges tends to increase. The crisis in the real life has also pushed many people in virtual worlds or online games, as cheap hobbies. We can really benefit from this situation.

Our land has a value, even if it was already sold once. We offer to potential buyers some advantages that they don't necessarly find everywhere:
- a unique landscape with amazing buildings
- an infrastructure: roads, public places and buildings
- a community of skilled and interesting people
- cultural institutions
- stability
- a unique experience of virtual democracy
- a team: the Executive is always ready to help newcomers
- a quiet place, with few risks to have a disturbing neibourhood

All these things have a price and this price cannot be 0L$. This should be a principle. We can offer low prices, of course. But land for 0 L$ is hurting, especially for people who have created and worked on sim's building.

In any case, there should exception to 0 L$ plots or low cost plots. Some plots which were in the list were never sold: the plots of the Monastery. The 4 first ones were very quickly sold (in few days). Then the sale was blocked (I guess because of the issue of July). I can imagine that the three remaining plots would have been sold also quickly in the dynamic of the opening of the sim. Some plots which were also in the same list were build on the former parcel of the Monastery, in Alpine Meadow, that was given back to the CDS to finance the purchase of the Monastery sim. This parcel was purchased few years ago with a fundraising. The question is now: how CDS has financed the purchase of this sim, as parcels of the sims and parcels given in exchange are sold or for sale for 0L$ ?

I agree totally with Timo. The marketing is the most important action we can do to sell our land. Is CDS already a brand? Should we find a new name for CDS, like an area name (instead of an institutional name like we have now) ? How and where should advertise CDS? Only in SL? There is a lot to do and this is a work for a workgroup. I have integrated the marketing in the Bill I am proposing to the RA, because I think that it is an important point.

Timo has given good advices. I agree especially with "classified adds". I use that regularly for the Monastery, with good results. This could be done quickly. I also would like to suggest that 2-3 parcels in each sim are available for immediate sale. If an avatar falls in love with our sims, it would be very complicated to explane her/him the current land sale process.

[Soro Dagostino]

What bill? Where is it published?

I will object to its presentation tomorrow if it can't be reviewed before the session.

Soro

[Cindy Ecksol]

What bill? Where is it published?

I will object to its presentation tomorrow if it can't be reviewed before the session.

Soro

Jamie's proposal is right at the top of this thread: http://forums.slcds.info/viewtopic.php? ... 592#p13872 , first posted October 25 and is on the agenda to be discussed at RA tomorrow.

Arria's proposal is here: http://forums.slcds.info/viewtopic.php? ... 851#p13853 , first posted October 21 and is also on the agenda for tomorrow.

And just for completeness, the proposed agenda is here: http://forums.slcds.info/viewtopic.php?f=24&t=2605

Cindy

[Jamie Palisades]

Here was my original suggestion (first post in this Forum thread):

Therefore I propose that, for the rest of the 12th government term, CDS sell all future re-possessed parcels for zero (L$0), to increase our occupied rental percentage, and assure that we will have fully-rented property generating the monthly tier fees that we *do* need for our budget. A buyer from CDS would conclude their purchase by paying the first month's rental tier. At the end of the term, the next RA and government can re-examine that practice.

For the convenience of the RA, let me state that as a formal bill, and also suggest one change that might address the concern about increasing "land churn" (speculative purchases that don't last). The change is in Section 2, below.

1. Any parcel of land that is re-sold by CDS, after CDS repossesses it, will be sold for a purchase price of $0.
2. At the time of purchase, the buyer shall pay CDS two months' rent.
3. This act does not affect the price of any land offered for sale by CDS for the first time, like the property in a newly opened sim.
4. This act will expire on February 1, 2010, and if the CDS RA does not act to extend it, the prices for sales of repossessed land by CDS will return to their levels set before this act was adopted.

Once the RA decides whether to enact this change tomorrow, either way, we will set all remaining land open for re-sale, either for sale at the legal price, or as special commercial land offered under the Commercial Land Bid Process.

As you know, we have had some repossessed land available to sell, but as discussed at the last RA meeting, it would be jarring for a buyer to purchase it at a high price from us, then learn that the price became zero two weeks later. Therefore, out of fairness, we also suggest that IF the above legislation is adopted, that CDS refund the purchase price of any parcel sold by CDS during the last month.

Regards JP

[Arria Perreault]

@ Cindy: Thank you for clarifying Soro's question. I don't intend to give a new version of my bill to the Assembly. We can discuss the text that is already on the forum. I would like to make one point clear. I don't expect to see this text accepted (or rejected) as a whole. In the past, many bills have been deeply discussed and amended, either in the forum or in the meeting. I try to invite our Assembly to find the best solution for CDS. Even if we are from different factions, we have to face a special situation. Our lands are not easy to sold. In the same time, the economy of SL is not that bad. I am sure that if the RA works like a collective brain, we will find creative solutions. The most important point for me is to open the debate. I don't expect we finish it today. Solution's finding isn't an easy process.

@ Jamie: I need a clarification about your proposal. I understand that the parcels of the new sim Monastery will be for sale for their official price (as it is in the list of the Treasurer). Is it correct?
What about the two parcels that were created on the former parcel of the Monastery in Alpine Meadow? On a technical point of view, it could be seen as re-possessed land. But it was meant as an exchange of land.
To help people to understand my question, here are the facts and maths about the financing of the Monastery sim. Prices come from the list of the Treasurer.

http://spreadsheets.google.com/pub?key= ... NDOg&gid=8

The parcel of the Monastery in Alpine Meadow was given back to CDS. Two parcels were set on this place. Their sale should finance a part of the new sim corresponding to the Monastery parcel (187.39 $). The rest of the money would come from the sale of the 6 remaining parcels (31.23 $ each). The sim was purchased for a good price: 375 $ (LL has offered this price until the end of June). Three parcels were sold immediately after the opening (93.69 $). The three left parcels were blocked because of land sale issue of July.
All these 5 parcel were on the list of the parcels for the last action sale. If I have well understood, their price was 0 L$.

[Patroklus Murakami]

I can see why people would put forward the proposal to resell land in the CDS repossessed by the government for L$0 and I acknowledge that there are some good arguments in favour of this. It may even be the right thing to do once we have considered the consequences but, at the moment, I think the arguments stack against it.

This proposal is good from the new citizen's perspective - they get land in a beautiful, themed sim which is also a self-governing democracy. It may also be good from the government's perspective (which is, ultimately our collective societal perspective since we all have an interest in tier getting paid) in that we sacrifice the extra 'windfall' we get from abandoned land in favour of a steady stream of rental income. The jury is still out on that one though, we need some more information in order to make a balanced decision. But, as has been pointed out here and as was pointed out at today's RA meeting, it is not so good for existing citizens. If the government takes to selling land for L$0 that reduces the value of the land we hold to.... L$0. At the moment many citizens have land in more than one sim or more than one lot in a sim. When citizens come to sell the land they paid for (often having paid top dollar for it) they can recoup some of the initial amount they paid by selling on to someone else. Now, as has been pointed out, that does not always work because the land market in SL is depressed. I experienced this myself a year ago when I had to abandon a parcel in Colonia Nova that I could not shift and did not want to pay tier on for a further month though I did manage to sell my other lots and cut some of my losses. The key point is that, if the government takes to selling land for L$0, that choice will disappear. If the government gives CDS land away for free how are ordinary citizens supposed to do any better? This is the heart of the problem.

Now, before I get accused of being greedy let me make it clear that I have very little interest in land speculation in the CDS (my previous Enron-inspired post was not meant to be taken too literally). My remaining holdings in the CDS are one small inner-city plot in NFS and a prim lot (remember those?) so I'm not worried about how much I might lose here. It's just that valuing our land at zero has consequences.

There are others too but this post is already a bit wordy. Gwyn mentioned that we are a property-owning democracy here; we define citizenship by land ownership. What impact does making land worthless have on that? We would, in effect, become a country of renters rather than owners. That seems like a pretty important step. Maybe we should think about that first?

During today's meeting I put some questions to the government which have not yet had an answer. These were: "Have you thought about that? What is your response? Will there be compensation?" To those I would add "What is our current occupancy rate? What percentage of our tier are we covering each month?" Because, unless we are really at risk of not covering tier on our sims, there is no case for holding a fire sale of CDS land.

(Also, for Jamie and Rose's benefit, I rather snarkily said "aah, i love it when ppl run away without answering questions" after you left the meeting. I would hate for you to think I would say something behind your back that I would not say to your face. That seems to put some people's knickers in a twist .)