Both Oars In Land

Apr 23, 2010

Land has been on my mind a lot lately, which is interesting since I don’t own any. Nevertheless, I was curious to know who does. It turns out that the largest land owner in the world is Queen Elizabeth II, if you take it at face value that she owns Canada and several other countries. She is followed by three Jacks of a sort: the governments of Russia, China and the United States. There are several Middle East monarchs in the top ten that might just have a little bit more personal control of the land they are reported to own than the Queen and her government court. The King of Saudi Arabia, for example, is reported to own over a half of a billion acres. 

The largest landowner in the US is Ted Turner, who reportedly owns over 2,000,000 acres—that’s a lot for even a big mouth to bite off. I learned about Mr. Turner’s immense real estate holdings from an article in a magazine published specifically for landowners. I was a bit surprised that there would be enough people perceiving the ownership of land as a hobby to make a trade magazine for them—but evidently there are. It appears Mr. Turner is their poster boy.

In the article, Mr. Turner is quoted as saying, “I never like to buy anything except land. It is the only thing that lasts.” He has a point. Land does tend to outlast its owners and their marriages, except maybe on Prince Edward Island where the terracotta shore erodes away annually, leaving one-time landowners with a nice view, but very little to stand on to enjoy it.

Coincidently, Mr. Turner’s quote points out exactly why land has been on my mind a lot lately. It’s not that I have been thinking about investing in it to hedge my jaundiced portfolio of stocks. Rather, I have been trying to negotiate a good purchase price for a parcel of land in Haiti for charitable use. One would think this would be an easy task given how the earth recently joined the politics in Haiti because it is rather unsettled. But, it’s not, for exactly the reason the US land mogul points out: Land is the one thing that lasts.
 
Land is not cheap in Haiti precisely because it is the only lasting commodity locally obtainable. [To give an example, an acre of undeveloped land on the rim of Port au Prince in a yet-to-be fully developed semi-commercial area may sell for more than $100,000 per acre, maybe even double that.] Both the economically advantaged, who sometimes have a lot, and the disadvantaged, who, if they do have land, have only a bit, hold on to family land like we in the US hold to our retirement accounts. It’s their nest egg. This gives the land a greater than expected value for a second reason, the first being that Haiti is on an island. 

The extra, emotional, last resort value of the land makes negotiations more about finding opportunities to be of service than about bargain hunting. Distress can create opportunities, but a missionary cannot really go around hoping to find people in sufficient distress to be motivated to sell their land. The only proper chance is to find a landowner who is looking for an answer to a problem for which a buyer is a welcome and appreciated solution. The purchase price, reasonable or not, will have to match the magnitude of the reason inspiring the sale or there is little chance of a purchase. Ultimately, price is more based on the issue the owner is trying to solve by selling than it is about the market.
 
Land is also on my mind because it is the real culprit in the current tragedy of Haiti. Certainly, the quake caused the immediate damage and death, but the prolonged suffering is a result of the lack of landownership among the country’s poor. The vast majority of the poor were shaken out of dilapidated rental properties, not their own homes. They do not need another place to go; they need a place to stay. They need land. 

Interestingly enough, it is the country’s larger landowners who seem to recognize that more ubiquitous land ownership is the solution. It appears that they are ready to offer land and organize permanent housing purchasing programs if the Haitian government and the international community are ready to offer a real solution to the current crisis in exchange. Their price for selling is a real urban plan that is beneficial to all rather than ten years of camps for some. Not a bad deal, really.

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