Financing Hillside Housing

Financing Hillside Housing Projects

By John Taylor; 2006 July 10

I just finished listening to a thrilling history book-on-tape called "Nothing Like it in the World," Ambrose's story of the building of the first transcontinental railroad in the 1860's. I would like to see such an effort repeated in my lifetime, only instead of just a rail line -- our present rail system is badly in need of an upgrade anyway -- this time it would be combined with the building of the first transcontinental hillside development. According to this idea train tracks would be buried deeper and better, that is, they would accommodate a high speed rail line like the French TGV (train a grand vitess) or the more radical Japanese and Chinese maglev trains. Overhead a long mound development would be constructed. The underground train tracks might be built on two levels; below an express rail line would run at a very high speed and over it a second level would carry a slower train with local stops. This is the subject of my book-in-progress, currently called "Hillside Housing."

On the surface level, over the trains, would be a long, snake-like mound development; on the southern, sunny side would be various light and solar energy catching devices, such as greenhouses, glassed-in passive solar structures, solar panels and outside gardens. It has been calculated that if the roads alone in America were covered with solar panels, even our current, 5% efficient solar technology would take in enough energy to fill all of our projected energy demands. On the northern, shady side would be buildings designed to accommodate mobile, modular containerized homes and stores. Thus if a convenience store did not become viable in one neighborhood, it could be rolled onto one of the trains underneath and moved quickly and cheaply to another location anywhere on earth. Individuals too could move their modular homes around without bothering to transport every item they own piece by piece every time.

Judging by the experience of the first intercontinental train builders, the financing of such a staggeringly ambitious enterprise would be surprisingly easy, especially if we learn from the mistakes that were made back then. The two big companies that built the American transcontinental line were the Union Pacific, which started in California and went Eastwards, and the Central Pacific, which started east and built westward; both built the new railway through virgin land at huge expense, but they rapidly made back their investment from the extremely lucrative new railway business.

Not surprisingly, corruption was rife. The bigwigs bilked little investors and taxpayers alike and made huge fortunes for themselves; workers got tiny wages and the names and numbers of wounded and killed were not even written down. The Union Pacific was riddled by the worst scandals of the 19th Century, and the only reason that the Central Pacific got away Scot-free was that somebody came up with the clever expedient of "disappearing" all of its books and records in a fire. Ambrose, typical American, repeats over and over that there was no other way of doing it, as if America existed in a vacuum, completely ignoring the Canadian intercontinental railroad built soon afterwards that learned from and improved upon the egregiously corrupt American example.

Latest news down the pipes: a study just calculated that well over half of all the fossil-based emissions in the world come from America. Why? Because we drive everywhere, far more than any other place in the world. We do not have a choice, everything is designed for cars, not people. So, why do we have to drive everywhere we need to go? Same thing that got the intercontinental railways, greed and rank corruption, or to put it another way, lack of public spirit and rule of law.

Los Angeles is the classic example. Back in the 1920's gas and auto interests bought out all of its trolley rail lines and forced the city from then on to develop exclusively around trucks and automobiles. Now an entire continent is built around the same thing, cars and trucks. Vast suburban sprawl, antiseptic malls, big box stores, all dependent on driving everywhere. And nobody understands the problem because their interests are too deeply implicated. To use a quote popularized by Al Gore's latest movie,

"It's hard to get someone to understand when their salary depends on them not understanding." -Upton Sinclair

Trillions of dollars of investment in an entire built environment whose pollution is choking the human race and, because we no longer walk anywhere, is bringing about epidemic obesity and a thousand other health problems caused by a sedentary lifestyle. As I say, this is not a technical problem, it is one rooted in criminality. Corruption is the effect, the cause is lack of public spirit and a failure to recognize the value of justice.

The hillside developments I propose would be the result not only of learning from past railway building and housing fiascos, but would come of a global order's new, non-corrupt financial system. This would only be possible with the aid of highly advanced networked computers. These full-service, communally owned hillside developments would be designed from the ground up to offer a superior, more attractive option to our present sprawling, polluting, low tech housing plan. Given a choice, every consumer would choose living in a high tech hillside modular dwelling unit connected to the world by a TGV containerized train system. Here is how the financing of such a combined transit and housing development might work.

Let us say that Canadians want to build a hillside train and housing development running across the country, from the Maritimes to Vancouver. Say a given part of the old railway track is already owned by, say, Canadian Pacific. These original owners would be bought out with a share in the future enterprise at the railway track and land's present market value. If it wished, it could trade this for a stake in the new railway venture, or it might bid for a sub-contracting role in the construction of the new TGV train. Every worker and contractor in the project would be paid partly by shares in the private sector of a publicly run enterprise, the first transcontinental TGV train combined with hillside development.

Here, on the other hand, is how financing worked in America in the 19th Century. The transcontinental railway was built with a clever strategy of taking shortcuts in order to cash in on future potential. Everything was done as cheaply as possible, as opposed to doing it right the first time. Far-sighted administrators understood that improvements could be done easier and cheaper once the train itself made transport from distant areas possible; for example, long stretches of track were built on sand using wooden ties that would last only a year or so. Later on, the trains themselves could carry the gravel for proper bedding and wood from anywhere in the country. As they built stones and wood were sold at inflated prices when they could be bought at all. Once the railway was build good wood for permanent ties could be had from anywhere in the country at a good price. Similarly money was had on government loans based on amount of track laid. Their credit was good, for everyone knew that very soon their railway business would be very lucrative.

What I am suggesting is that instead of the old railway barons, we take as our model for the transcontinental hillside development the way that the search engine Google attained its spectacular financial success. They went from a dubious web boom startup to the world's most profitable advertising agency by making a particular computer search algorithm the standard over the entire Internet. They offered their search engine free to all comers and took in their money by offering to share advertising stakes in a plethora of websites. They now take in advertising revenue and give out automatic payments to freelance content providers using a standard formula, albeit one that is proprietary and confidential.

Hillside housing would offer similar shared payment formulas to all that promote them and participate in their construction. The difference is that unlike the railway barons and for that matter Google itself, every one of its financing formulas would be devised in a democratic, open way by experts elected to serve on behalf of the community. The model would then offered and promulgated by public servants with the interest of all humans first in mind. Because the public would always be the majority stakeholder and hold the controlling interest in such projects it would be easy to keep the greedy from getting out of control. In fact the design would be to reverse the Catch 22 that Upton Sinclair pointed out earlier:

"It will be very easy to get someone to understand when their (future stakeholders') salary depends on them understanding."

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John Taylor

badijet@gmail.com