Tuesday, July 19, 2011

Serfs Up In The CNMI

Why The Feudal Lords Of The CNMI Want To Keep Article 12

Article 12 in the CNMI. Taking out the fancy language it allows for only people of NMI decent to own land in the NMI. To own land you need to be at least 25% NMD decent. There are several ways to get around this, mainly through adoption, which automatically makes you 100% NMI.
As people inter-marry the "blood quantum" has been diluted to below 25% (this is happening now to many families) so sons and daughters may not inherit their parents land. What actually does happen to land is still a bit fuzzy.
That aside, Article 12 was probably a good thing when it came about 25 years ago. If land could be sold to anyone the Japanese would probably bought off nearly every acre of this island in the early 90's. They could only lease land, and have leased much over the years. The old story of landowners becoming millionaires overnight only to be on food stamps ten years later is a tale told often. They still own the land and can get it back in...probably 30-35 years. People of simple means earned the big money by merely signing their name. Wealth created without "Sweat or Brain Equity".
Even proponents of continuing Article 12 can see the economic advantages making land available for sale to anyone. The list of benefits is too long and not worth re-hashing here. Repealing Article 12 does not force anyone to sell their land, it just gives them a wide choice of buyers if they wish to do so. Currently, they can only sell their land to another person of NMI decent. The main reason given by proponents of keeping Article 12 is that the culture of the island will be negatively affected if anyone can buy land. I actually heard one on the leading proponents of the Article 12 say that it was okay if one local were to buy land (cheap) from another local because it would "still be in the Saipan (CNMI) family".
The proponents of Article 12 have wrapped their arguments in " the loss of culture" and "people losing their lands forever". The loss of culture is rather subjective and the land loss would have happened anyway, just to another NMD and for probably much less money.
What has developed in the CNMI, and what Article 12 has pushed along and encouraged, is a class system based on land ownership. This is not a new situation. Feudal Lords vs. Serfs, Bourgeoisie vs. Proletariat. You now have the wealthy land-rich NMD families pitted against the disadvantaged NMD that might have one small homestead lot. Indeed, many NMD rent and have no land. For the many NMD that have a small homestead lot, it's not the Japanese that are taking advantage, but their own neighbors, or as stated earlier "part of the Saipan family". Many situations arise where a person with a little land needs a lot of money. With such a small pool of eligible and able buyers it's just a matter of time until most, if not all, of the land will be in the hands of a few people, or families. The Feudal Lords of the CNMI.
On another level Article 12 discriminates not only against fellow American Citizens that want to buy land, but to the local NMD that would like to sell their land at a higher price. What you are saying to the disadvantaged class is "There are only a few people you can sell to. Pick which buyer and don't worry about the low price you get. Remember, it's the law". I cannot think of anything more discriminatory to a local NMD than this.

With the repeal of Article 12 any local NMD with land can choose to sell their land ,or not sell their land, to anyone they wish. They can hand their land down to their children. They can sell it cheaply to another NMD if they wish to keep it in the NMD family, or they can sell it to the highest bidder, which might also be an NMD. The Feudal Lords of the CNMI will get richer, but not by paying bottom dollar to their neighbors. Either way, it's the owner's land...and it should be their choice.


Michael Dilley said...
This comment has been removed by the author.
Michael Dilley said...

I totally agree, The rich get richer on the blood and sweet of the poorer, so sad to see on such a beautiful island as Saipan. And now i just saw in the paper the Governor wants to sell the gov. land that the hotels are on to the hotels fee simple, wow...Mow from what i understand DPL land is like true Chamorro ancestral land, That's got to violate Article 12 and should really piss off the true Chamorro's more than doing away with article 12.

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Anonymous said...

Land Equity and what it means to the people of the Commonwealth of the Northern Marianas Islands

What is Equity?
Definition 1-5 provided by: “Investopedia”

1. A stock or any other security representing an ownership interest.

2. On a company's balance sheet, the amount of the funds contributed by the owners (the stockholders) plus the retained earnings (or losses). Also referred to as "shareholders' equity".

3. In the context of margin trading, the value of securities in a margin account minus what has been borrowed from the brokerage.

4. In the context of real estate, the difference between the current market value of the property and the amount the owner still owes on the mortgage. It is the amount that the owner would receive after selling a property and paying off the mortgage.

5. In terms of investment strategies, equity (stocks) is one of the principal asset classes. The other two are fixed-income (bonds) and cash/cash-equivalents. These are used in asset allocation planning to structure a desired risk and return profile for an investor's portfolio.

Why is Equity so important?
Because it gives you and your family financial freedom which equals money when you need it the most via a bank loan or sale of owned asset like property, house, or car…ect.

The way I have explained this to most of my friends is: You need equity in your property in order to get money from the bank (I.E. Bank loan at fair market value), which means as long as you own something with equity you can always have cash in order to better provide for your family’s future such as education, or emergency situation, and this does not mean you have to sell your property to do that.

Part 1

Anonymous said...

Let’s say in today’s market you have a house which is a 1 story full concrete three bedroom. Based on the material and construction cost of today’s economy it might be worth $100.000.00 to build the same house you already have, now you have 959 square meters in which that house sits on, this above price for both the house and property would be determined by either the licensed real-estate market & the banks or by the government & the banks, if the government controlled the real estate market by backing its own property’s (I will explain this one later on) so potentially you could be sitting on $130,000.00 worth of asset which you could go to the bank and get a loan against for let’s say close to 1/3 the value or $50,000.00 or you could sale in order to invest in a better property or a smaller property which would meet your family’s needs better. In the same way an investor would be able to also use this equity to secure his business and acquire bank loans to further his business. So equity will equal investors, which equals business, which equals jobs, which equals money for your family’s and a better life style.

What’s happening today in the C.N.M.I,

Well everyone wants to argue over article 12 when in reality that is only a small part of the overall problem. First and foremost from what I have read and heard, article 12 was not placed in the constitution by the NMD’s to protect their own lands, it was placed in their by the United States in order to protect their interest and insure the NMD’s would not be able to sell out the island which then would make it harder for the United States to locate bases or other assets in such an important location in the pacific. Second selling your property is really up to you and no one else can force you to sell if you do not want to, however weather you sell to a NMD or to someone else, the end result is that you will be without land in the end and unless you’re smart and reinvest part of that money back into another land, the money will be gone and so will be your land which was your primary asset for your family. This leaves you with renting from another person or living with your other family members to survive. Now in today’s CNMI the only difference is this, you sell to another NMD you get penny’s on the dollar usually for that $130,000.00 house and lot they pay you only $30,000.00 knowing that if article 12 ever goes away they will be sitting on a gold mine, you are still out your land and its achievable equity no matter what they paid you. If you sell to a non NMD yes you or one of your children will get it back in 55 years and then based on the laws at that time will have to decide what is the best financial solution for them, and the good thing is, you will probably make more under the right circumstances but most already know the CNMI has the lowest property values per capita anywhere in the world today, because there is no real estate equity here due to no financially backing the property’s here in the CNMI, therefore there is no equity value. It’s another instance of the poor getting poorer and the rich becoming billionaires in the end.

Part 2

Anonymous said...

So how do we get equity?

Well there are only two primary ways’ I know of, maybe you know of another way, 1st is the government backs the lands, this means when you take a loan at fair market value and fail to pay the government pay’s the loan and then re sales the property and uses the profits to go to the other government needs like the retirement fund, schools, and possible hospitals. I.E. the Government then sets the standard by which the real estate will be valued because they back it. In this type of set up, Article 12 is fine and would prosper because regardless all lands have equity value which is backed by the government. If this were done in 1976 when article 12 was put in the constitution, I would venture to say we would be looking at a much better and prosperous economy today and not the one we are currently in, because we would have both the tourist industry, and the real estate industry generating income by investors and all that wished to live on these islands. The second way is fee simple (abolishing article 12) which then would allow the licensed real estate agents and the banks to set the value of our lands based on the fair market value of construction and surrounding housing areas. If you want a better tomorrow for your children, then as the government does not have the funds to back your lands then this may be the way we have to go, so that what you leave your children is just not a worthless roof over their heads but an asset that can help them and their family at that time of their need. The land never goes anywhere, only we do, and as time goes on the islands lands will get smaller and smaller due to population growth which then makes property’s get more valuable as is the case in Japan currently.

So what is the next step, well from what I hear extending to a 99 year leases, for me if the banks ask for three to four properties now just to give you a $20,000.00 loan, I don’t see them giving you any more just because the years got extended, because this does not equal equity for them, the value of the property is still the same, you can just own it a little longer but that bank knows it can never own a leased property so why give something they also can not own? The next thing on the agenda, lowering the blood quantum to some degree, this is vague and although definitely needed as many of our NMD’s in the next generation will not be eligible to own land based on the current law as their blood line will have fallen below the quarter blood level. Many of our locals are marrying into other cultures and that’s just the way it is, we cannot always help who we fall in love with and that’s what makes us Americans, we were born with the freedom to own land, own gun’s, free speech, free religion, and free choice of our own destiny, at least as much as the federal and local government will let us get away with. ect… once again, how does this make equity??? It just allows more NMD’s to own but does not change the banks or financiers ability to own which then would equate to equity.

Part 3

Anonymous said...

For me rather article 12 goes or stays, is neither here nor there as long as we get some form of equity in our real estate to at least allow our people to get a fair market value instead of them selling off for pennies. I can honestly say, what I am seeing in our community right now breaks my heart and when I visit other places and see what they are doing and how the real estate market gives them the utmost ability to do more with what they have been given it really opens my eye’s to the potential we have here in the CNMI. My friends and families are hurting, they are having heart attacks for which they have no money to go to Hawaii or other places to get the much needed medical treatments, because their house and property’s have no equity and so they have no chance, this is a heart breaker, I hope the people will stand up and force the government to come up with a way to make equity again, voice their concerns that the way things are now is not right, and stop just going with the status quo as you and your family’s suffer to survive, we all could live better but it takes persistence and determination to get the things you want out of life. Stop going to the poker rooms trying to get rich over night, and drowning yourself in beer to forget your worries for a short time, these will only cause you to lose more, instead join up with your families and friends and push for equity in what you own so you can better benefit your family and yourselves in the end.

Part 4