Are we serfs? Did serfdom ever die? Are tenants paying rent to a landlord to live in an apartment serfs? Are homebuyers paying mortgages to a bank most of their lives serfs?

Everywhere you look, you see nothing but homes and homeowners. So-called “homeowners”. How many owners actually do own free and clear without any debt owed to the bank? How many, in effect, pay rent to the bank, with the bank as landlord?

The US Census Bureau does not give a straightforward answer. Instead of saying how many owners are unencumbered by debt, the wonks there say how many homes are unencumbered by debt—only 20%. So four out of five homes are actually held by the bank, with the power to demand full payment anytime and take over the home whenever the mood strikes.

Four out of five homes are actually held by the bank, with the power to demand full payment anytime and take over the home whenever the mood strikes.

How many of these home buyer or mortgage payers—but not actual owners—do pay the bank all their adult lives, just as a renter does? The average lifespan is a tad over 70. Of householders who are 75 and older, 2.1% still pay a mortgage; 65—74, 5.5%; 60—64, 4.8%. So about 1 in 8 are still paying the bank when they should be enjoying their Golden Years and probably are well past their peak earning potential.

Well, if the market has spoken, perhaps this is the way it should be, right? However, the market never spoke up and said, “when you pay for land—as beneath a house or apartment—you must pay an individual owner.” It’s not market but custom that says that. And that custom is not a venerable tradition. On the contrary, there was a time when owners did not keep the rent for land but paid it. They paid it to the next nobleman above them, all the way up to the king (or queen). To own was to owe. What needs fixing is: whom should be paid the rent?

Well, if the market has spoken, perhaps this is the way it should be, right? However, the market never spoke up and said, “when you pay for land—as beneath a house or apartment—you must pay an individual owner.” It’s not market but custom that says that.

And that custom is not a venerable tradition. On the contrary, there was a time when owners did not keep the rent for land but paid it. They paid it to the next nobleman above them, all the way up to the king (or queen). To own was to owe.

Paying for land is not a bad system—much better than killing one another for it. And owners owing rent is a good system—reap as you sow, right? What needs fixing is: whom should be paid the rent?

Whom? All of us. All members of society. Sort of like what Alaska or Singapore does, where people get a cut from the value of a natural resource (oil) or a location (a world class port). It’s fair, since nobody made land, everybody needs land, and everybody makes land value; land value reflects population density more than anything else.

This geonomic system—we’d all pay Land Dues in and get Rent Shares back—is both way fair and way efficient. Metro dwellers could probably cover the cost of leasing the apartment, both their part of the building and of the underlying land. Home buyers would find mortgages cut in half, since buyers no longer would be buying the land, only the building on it.

Cutting half the income to banks would mean cutting half the political influence from banks. Could you live with no more trillion dollar bailouts? No more skirting the law in credit card scams?

Bankers and everybody else would in effect rent the land. It’s a system that works in Hong Kong, the US port districts, and the Garden Cities of England (founded over a hundred years ago by Sir Ebenezer Howard, the grandfather of urban planning and a follower of American reformer Henry George).

How heavy would be a resident’s land rent? It doesn’t matter. As dues rise, so would dividends.

When Land Dues do rise, it would not be from speculators bidding up the price of land and residences. Dues would eat up the profit in land speculation—rampant in cities like New York and San Francisco—so speculators would quit mucking with real estate. Where they don’t bid up prices, prices drop.

Then ex-speculators would put under-utilized prime sites in cities everywhere to highest and best use. That would create commerce, attract settlers, densify the city, make it more compact. All that would raise location values. But why worry? You’d be getting your rent dividend.

Our 75 year old granddads and grandmoms would still be paying for their homes, or at least the land beneath their homes. But at the same time, they’d be totally secure. The cost of living would be dropping. And they’d be getting the dividend. Heck, everybody in their family and social network would be getting rent dividends, too.

Nobody would be a serf any longer. We’d still pay rent. But we’d pay ourselves.

Are we serfs? Did serfdom ever die? Are tenants paying rent to a landlord to live in an apartment serfs? Are homebuyers paying mortgages to a bank most of their lives serfs?

Source: FiveThirtyEight by Mona Chalabi | Dec 11, 2014