Wright: This is Ideas Unlimited from Kansas State University. I’m Deanne Wright. Land Reform as Community Land Trust is an idea we’ll hear about today from Bob Swann, President of the Schumacher Center for a New Economics. Bob Swann describes the organization that is headquartered in Great Barrington, Massachusetts.
Swann: E. F. Schumacher was the author of the book Small Is Beautiful, published in 1973, which became widely known and influential. Our role is to promote his ideas and find new ways of making things happen along the lines that he foresaw and envisioned. We have a yearly lecture program, and we’ve started a couple of separate corporations—non-profit corporations—which can begin to develop in our local area some of the ideas and projects that he envisioned.
Wright: What is in your background that you became President of the Schumacher Center?
Swann: Well, I’ve long been a decentralist. If there’s one phrase to describe Schumacher’s ideas, it’s small-scale decentralism. I’ve been a decentralist for many years, and when I met Schumacher back in 1967, we agreed to work together in various ways. Harper & Row published the book in the United States in 1973, but it had been languishing and not getting a lot of publicity, so I asked him to come to the United States, and we arranged a lecture tour across the country. The tour gained recognition for the book, and it began to sell much more rapidly after that. This was before the Schumacher Center was founded in 1980.
Wright: Where did you grow up that made you become a decentralist?
Swann: Actually I’m an urban lad. I think my interest in rural areas in particular is a part of my being a decentralist. The early beginnings of it grew out of summers I spent as a boy on my uncle’s farm, where I learned to plow behind a horse. I just loved being there. That goes way back to the late 1920s.
Wright: Anything in your education then that kept you thinking that way?
Swann: I can’t think of anything specifically in my education. I was thinking that way all of my life. I got into construction; in fact, I’m a designer professionally and a house builder, which got me interested in the problem of land, one of the areas that Schumacher was concerned with. I realized that a builder can spend a lot of time and energy trying to be more efficient and cut down the costs of a house and so on, but then the cost of land doubles, and all that gain he’s made in cutting down costs is wiped out, sometimes overnight. So I became interested in the reasons for this and started to study land and land issues.
Wright: Here at the Prairie Festival at The Land Institute you discussed land reform in the form of a community land trust.
Swann: Philosophically land is different from things we create with our hands. We don’t create the land. It’s God-given. There’s only so much of it, and there isn’t much useable land left on the earth. Human beings have pretty much used it up. The idea that land should be treated from an economic point of view as it if were a commodity that you buy and sell and make money on has to change. Land can’t be treated that way. It has to be treated as a form of trust, and we have to be stewards of the land. It’s that philosophical idea behind the community land trust that I’m really interested in because that’s the basis of our livelihood. Everyone needs land. Everyone has to have some kind of land no matter where you are. Even if you’re living in an apartment in the city, underneath it is land. It’s always there.
Wright: It was so interesting to me to see the way you combined the critical concerns of affordable housing with the idea of caring for the land, of conserving the land. It’s a unique combination. And you are coming up with very practical ideas, innovative ways of protecting the land by giving people places to live. Please trace how you looked into the history of other people who have tried to resolve this core problem.
Swann: I think Henry George is a person who should be mentioned in that regard. Henry George ran for mayor of New York in 1890, and he almost won. He published a book shortly before that called Progress and Poverty in which he attempted to show, and I think very successfully showed, that poverty is all tied up with land. When there is a monopoly on land, on the control of land, that takes away from society people’s ability to gain access to land, which they need if they are going to survive and are going to stay out of poverty. In fact, in the United States today 90% of all land in the United States is held by only 10% of the people. So when you have that kind of monopoly, then inevitably you’re going to have poverty. That’s why Henry George has to be brought into this discussion. The community land trust is a kind of practical application of Henry George’s ideas. He believed that if you tax land only, but tax it according to its use value in any given community situation, then you won’t need any other taxes; all of the income that’s required will come from land taxes. This has been called the single-tax approach. Now, a community land trust is not simply that; obviously it is much more. But it is a practical application from the point of view of Henry George’s idea of taking the land out of speculation and, in this case, not by a tax but by leasing the land for use rather than giving ownership of the land to the individual.
Wright: There have been the villages in Europe as well as in India and Israel that you say attempted to do this. How did you Americanize those concepts?
Swann: After Gandhi’s death in 1948, a man by the name of Vinoba Bhave, who was looked upon as a saint in India the way Gandhi was, assumed leadership of the Gandhian movement. He started what was called the Bhoodan or land gift movement. Excess land that was owned by individuals was donated to those in the villages who were landless. The problem was that these villagers found they couldn’t use the land because they didn’t have money to buy oxen or a good plow or other things they needed. Having ownership title to the land, they would then sell it. As a result, they’d end up on the streets of Calcutta, landless again. Vinoba realized that something different had to be done, so he came up with the idea of the land gift going to the village as a whole. It was called Gramdan at that point—‘gram’ stands for village—the village-gift movement. Over some twenty years of walking throughout India from village to village, he gradually accumulated gifts of land in the millions of acres, which were then held by each village’s council of elders. The elders were responsible for leasing the land to individual farmers, who now didn’t own it, but they could farm it. And that has something to do with the genesis of the Community Land Trust movement.
Wright: It is amazing that the question asked was, “Who of you has more land than you need?” and out of that came millions of acres. Do you think this question could be asked in our country, and what kind of response would there be?
Swann: Yes, it was amazing, especially because land is as precious as gold in India. People don’t give it up easily. Unfortunately, we don’t have saints like Vinoba in this country.
Wright: But if you take that concept and try to apply it in the United States of America?
Swann: There are people in the United States—not millions of them, but there may be thousands—who might be willing to give land, especially when they can continue to live on it. You see, giving the land doesn’t mean that the person would give up the right to stay there and use it. As a matter of fact, the community land trust that we started in Great Barrington, Massachusetts, did exactly that. A family owned the land; the father was dead, and the mother was dying of cancer. One of her five children wanted to stay and live on the land, but in order for him to do that he would have to buy all the land from his brothers and sisters, who would otherwise inherit it. He didn’t have the money to do that, so we set up a community land trust and as a community land trust bought the land from the mother. The son continued to live there and lease a portion of the land just as anybody else would. That way he was able to stay on the land and still receive his share of the family inheritance.
Wright: Will he be able to pass that inheritance down to his grandchildren?
Swann: Absolutely. The leasehold we have written for land trusts is a 99-year leasehold, renewable automatically and inheritable automatically. This means he can pass it on, and the children can pass it on. It can go on forever as long as they use the land. If, however, they decide not to use it, if they decide to leave, they automatically lose the lease. Automatically.
Wright: You have to live on the land. You can’t be an absentee landowner.
Swann: Exactly. You cannot be an absentee landowner.
Wright: Expand a little bit about the philosophical difference between a conservancy land trust and your community land trust. A lot of people are aware of the Nature Conservancy and other similar organizations.
Swann: The basic difference, I would say, between a community land trust and a conservation land trust is that the former is primarily concerned with the economic use of the land, whether it is used for housing, for farming, or for commercial use. It is also concerned with the ecological use of the land, and one of the first things a community land trust will do when it acquires land is to carefully plan the use of the land based on the natural ecology of that particular piece of land. We’re very intent on good land-use planning. A conservation land trust is not involved in housing or any sort of commercial use. It might be involved in leasing land for farming, but otherwise the land is completely excluded from any kind of development. That’s where the two types differ.
Wright: I think you said there are 65 in the United States?
Swann: Around 65 now, yes. There are some urban as well as rural.
Wright: The community land trust might have a structure that would possibly work in the Plain states. Let me tell you what our concern is here. It is the dwindling of population due to the economic conditions in our small rural towns, sometimes called the prairie communities. There are people who want to live here, but there isn’t enough economic base to sustain young families. A lot of retired people can go ahead and stay and do stay, but the young people, young adults with children, have to leave even when they do not want to leave. Is there a model that comes to your mind that might fit this kind of need?
Swann: First I have to say that having been born in a city, I’m more of an urban person in background. I’m not familiar with the prairie, and I don’t want to sound as if I have answers to the situation here. But I do wonder if what has been done in Israel might be applied to the prairie. I’m not talking about the kibbutzim, which are intentional communities in rural lands in Israel. I’m talking about what is called the moshav shitufi form, a type of cooperative agricultural community of individual farms that combines small holdings where individual families can garden, can raise small animals and sell them on the market. They’ve combined that with a large-scale holding of land on which they grow crops such as wheat and cotton, and it’s organized as a cooperative. What it means is that the individual families living on these small holdings participate in the cooperative so that one or more members of the family work with a cooperative as well as with the larger farming operation so that they have a dual income from both the larger farm and the small holding. In addition, they’ve developed small industries in the village. The land-use plan is interesting because these small holdings are combined in clusters ranging from 100 to 200 small one-fourth to one-half acre plots, whereas the larger holding may be 1,000 acres or more. Because they’re clustered and relatively close together, there are services they can generate to help one another. There are also other kinds of small industries with a market that could be farther away. Seems to me this is one form that might be interesting to think about for the prairie, especially if these moshav shitufi units are related in a larger form to more of an urban center. If you take the town of Salina and you have a dozen of those units located around the city, they would feed into the city. There would be an interconnection, a commercial connection, between the city and those units. That also has possibilities to at least consider. I’m not coming up with answers; I’m just suggesting what might be worth thinking about.
Wright: That’s right; it’s worth exploring. I was trying to think how the rugged individualist, the pioneer spirit, might respond to this idea. Sometimes desperate conditions cause people to look at things in a new way—such as when you live in a beloved small town with a population of 205 families and you know that it is dying although you’ve worked very hard trying to sustain it. There aren’t any small manufacturing businesses that want to come in, the hardware store has closed, the lumberyard is gone, the schools have consolidated. I’m trying to figure out what it would take for people to get together and somehow find a way to preserve this American character, this Kansas character of individualism.
Swann: It’s interesting that in Israel the kibbutzim, which are the intentional communities where everything is held in common—including the purse—were the creation of European emigrants who went to Israel. They started coming way back in the 1890s, and the land was purchased from the Arabs at that time. The kibbutzim were the first kind of settlements. But the moshavim shitufiim I’ve described were the result of American Jews going to Israel and their individualistic interreaction with what they found there. They were the ones who created the moshav shitufi form because they saw it as combining their need for individuality and at the same time for larger scale cooperative farming. In other words, they wanted to use modern methods of farming—with large scale implements and so on—and they also wanted to be close together but still have individual plots of their own. So it was a hybrid kind of connection. Hybrid I say because the other extreme, which is a simple moshav, was a sort of typical European-village approach whereby the farmers all live in a town close together, but their fields are outside of town, and they go there by horse and buggy or by tractor or car. But in that case there’s no cooperative utilization of a larger field, so they’re still dealing with relatively small pieces of land, which don’t lend themselves to modern machinery. You can be sure that a combine on a 20-acre plot wouldn’t work very well. It was the Americans who created that hybrid.
Wright: An important part of your lecture today got down to the nitty-gritty of money and mortgages. A lot of people will be interested in that approach to community land trusts rather than looking at the concept philosophically. I’m not sure if it was you or someone who worked with you who said that it’s local banks, not big corporate banks, that respond to this idea.
Swann: It’s not so much that they respond to the idea, I think; it’s because they are in a position to respond quickly and because they know the local community. In the United States now there are bank conglomerates with a lot of small banks that have been bought up by a larger bank, which has been bought up by another even larger bank. This means that decisions are made at a distance. If you’re interested in getting a mortgage on a piece of land and you ask a bank to come out and look at the land to appraise it, the bank may do that, but then it takes weeks to get an answer back from headquarters, which is in Boston, let’s say. In our situation in the Berkshires, two or three of the local banks are owned by a big Boston bank, and that is the one with the final say, whereas the local bank that we deal with, which is entirely based in the Berkshires, has local money in it. Someone comes out to look at the land, and in two days a decision is made. You can rely on it being a positive decision because the people involved in making it know the local community. The bank in Boston, on the other hand, is going to look at the paperwork; that’s all they have to go by is just the paperwork.
Wright: But you are able to offer those banks an unusual assurance.
Swann: That’s true, but again it’s because the local bank is available for discussion and education whereas the other bank is not. We don’t go to Boston to talk with those who make the decisions there. The reason that it’s good security from the bank’s point of view is that not only does the lease provide for a release of the land to the bank if necessary under default, but also the community land trust itself stands behind the loan and will buy out a house, for example, before the bank has to make a foreclosure. This gives the bank double insurance in effect: it has the backing of the land and the community land trust as well as the willingness of the trust to buy it out. This provides great security.
Wright: The interest rate that you’re talking about is very low.
Swann: It’s around 6% to 7% average. This is social-investment money that is being made available by individuals. Mostly we’ve asked for $5,000 to $10,000 per individual. In other words, we’re not asking for tremendous investment. For people who have $50,000 or $100,000 to invest, putting $5,000 or $10,000 into a land trust, even though it might seem a little risky because it’s new, is not terribly threatening. There are a lot of people out there who are willing to make that investment. We’ve raised $250,000 just for our local land trust.
Wright: Because they then have a guaranteed 7% return.
Swann: That’s right.
Wright: You take that a little bit further. You think this idea that has been worked on by the community land trust is tapping into something deeper, a deeper trend or movement, in our country?
Swann: Yes, I think that what’s called the social-investment movement in the United States is developing rapidly. In total, if you take in all of the brokers and investment councilors and everybody who’s involved in it today, it’s in the billions of dollars. It’s literally in the billions of dollars. One person who attended a conference on social investment said that what was represented at the conference was added up, and it came to forty-nine billion dollars of investment money. So we’re talking about considerable amounts of money. Now, there are two kinds of social investment. One has what I call negative criteria and the other has what I call positive criteria. The negative criteria are applied by people who don’t want their money invested in things they consider bad. That could include money in support of nuclear arms or nuclear power or South Africa or other things they consider to be socially harmful. Those are negative criteria. The positive criteria are for people who want their money to go into what they consider to be socially useful and good. The community land trust is one of those options that are available. As a result, since I started the Institute for Community Economics we have raised over $15 million in a revolving loan fund just for purchase of land to be used for community land trusts. It is a rapidly growing movement.
Wright: My guest is Bob Swann, President of the Schumacher Center for a New Economics located in Great Barrington, Massachusetts. Bob spoke at The Land Institute’s 1990 Annual Prairie Festival. This is Deanne Wright with Ideas Unlimited over station KKSU Manhattan, Kansas.