Any local community can move towards sustainability by making assets move circularly within the community from producers to consumers, who, in turn, become producers. In today's economy, assets move from consumers to producers, where they accumulate.
Money is an asset that is continually being introduced into an economy. It is removed when it is no longer needed. Today, new money goes to producers in the form of loans. Instead, it can go to consumers as grants to create assets that turn consumers into producers. With loans, the money is removed when the loan is repaid. With grants, the money stays while the asset exists.
Producers are also consumers of other producers' products. If there is a mechanism for all consumers to obtain part of the producer's assets when they consume, they will become producers.
We can design and operate economies that behave this way, and such an economy will become sustainable as both consumers and producers want their assets to last and continue to produce.
Economies have all the components and systems to make this happen, starting with introducing new money.
Introducing New Money into a Community
Today, new money is introduced into a community and given to producers through loans. Instead, new money should be introduced into communities as grants for consumers to create new assets that make them into producers. If the new money is given to a community and the benefits are distributed across the community of consumers, it is a fairer approach than the current system, where the producers are given money to build assets they will own and obtain profit from consumers.
The current government's build-to-rent scheme is an example. Instead of a build-to-rent scheme, the money can be given to prospective occupants, who must spend it on building houses where they will live and buy from the rent they pay. The community will own the property, and the occupant when they move, will take the shares in the property they have purchased through their payment of rent. This new scheme will more than halve the cost of new homes because there will be no interest payments to banks.
The money can come through the banks, who will be responsible for ensuring it is spent on housing but will not have to receive loan repayments—just a fee for auditing and monitoring the expenditure.
Why is it Sustainable?
For housing, the approach reduces the amount of new money necessary to house people. New money represents new assets. The approach means that existing assets are repurposed or reused, and the funds for that come from continuously buying and selling existing housing. Sustainability is an emergent property when buyers without assets receive new money rather than investors. It also means the community uses existing money to transfer existing assets.
Using the Approach for Existing Housing
The approach can be applied to existing housing through Permanent Housing Markets. Occupiers continue to buy housing even after they have purchased their homes.
