Stacked Leases (fwd)

Lawrence F. London, Jr. london at
Wed Nov 22 10:04:16 EST 1995

---------- Forwarded message ----------
Date: 22 Nov 95 08:27:46 EST
From: Kirby Fry <72530.1353 at>
To: BlindCopyReceiver:  ;
Subject: Stacked Leases

Dear Friends,

The following is an article on earning a sustainable livelihood from our
summer of '94 newsletter, #2.  It is basically a summary of how the
Permaculture Institute of Australia uses its land as income for itself and
as family incomes for many others.  You may find this article and many
others at Cross Timbers' web page at

* * * * *

The Cross Timbers Permaculture Institute is ready to take sustainable
design principles, which we are accustomed to applying to natural
resources, and apply them to choice of a livelihood, and creation of
social structures (businesses, banks, schools, public services,  etc.).  A
sustainable ethic applies to human relationships and social structures,
and goes beyond merely treating the symptoms of social and environmental
degradation to address its cause -  human decision making.  When our daily
activities and  decision-making processes become based on sustainable
social and economic frameworks, "the real world" and a sustainable world
may not seem so far apart.

One strategy for creating sustainable economic systems is to integrate or
"stack" several land-based livelihoods onto one  piece of land.  Just as a
property can sell or lease grazing,  mineral and water rights, it can also
sell or lease rights to  its other resources - say, rain water, tree
cover, and/or animal yields.  A landowner can lease any of these resources
to  another individual, and turn a previously unused resource into  a
source of income for both the lessor and lessee. This stacked  leasehold
arrangement can in turn be supported by a combination of a community-owned
credit union and a barter system, which  would provide a way of combining
resources, while helping to  keep economic activity local.

To illustrate how all of this might work, let's look at the  four steps of
a possible leasing arrangement.  The first step  involves a prospective
lease-holder, who writes a three year  business plan which describes how
the unused resource might be  used in an environmentally sound manner to
create a profit  (e.g., manure leased for use as a slurry for pasture
fertilization, a compost base, and a nutrient source for  growing worms
and shitaki mushrooms). The lease itself should  be planned to generate a
net annual family income of around  $25,000.  Plan criteria would include
conventional business  indicators such as projected costs, cash flows and
earnings,  and would also incorporate plans demonstrating non-interference
with existing landowners' or lease holders' projects and  operations, and
adherence to sustainable principles.

Step two:  After the plan meets approval the lease-holder would pay a flat
fee of $1,000 to the land owner as an investment in  existing
infrastructure and facilities. Folks without the capital to pay  for
initial lease investment  fees could borrow the money from a local or
lease-holder-owned  credit union charging modest, fixed interest rates.
The  landowner or lease-holders' cooperative would in return receive  10%
of net profits from all leases.  In-system leasing of  landowner or lease-
holder owned equipment, goods, and/or  services could be traded in the
form of credits (1 credit =  $1.00) in a Local Employment and Trading
System (LETS).  LETS  is a barter system in which trade is accounted for
in the form  of credits, and all outstanding balances are payed every six
months in cash.

Step three is a six month long conditional  period for appraising the
feasibility and compatibility of the  lessee's business plan.

Step four is the annual renewal and  revision of a lease-hold.

These strategies we feel would help make earning a living from sustainable
work attainable.

        KIRBY [@ Cross Timbers Permaculture Inst. 817-897-9402]

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