Linden Letter about Land

You have some good points there, Prok, but those two proposals I was endorsing aren't meant to solve the entire land problem (whatever that may be), but only add a new option to the process.

Under the proposal in which you could cash out of your land for what you paid for it, there's certainly a risk involved. It could maybe be adjusted for inflation, but the point is that it's *not* meant to be a for-profit investment. You don't make any money on it at all. You get to buy land outside the current auction system, and in return you give up your chance to make a profit on that land. They do this in neighborhoods in Harlem and the Bronx to promote stability and homeownership. It lowers the bar for people who can't afford to pay the mark-up that real estate agents have to put on their parcels in order to stay in business. And you wouldn't be able to carve up the land, you'd have to hold or sell the whole thing. It's only meant to apply to a small portion of the land LL releases each month, so it shouldn't impact their bottom line very much.

I'm not against landowners, they do develop land just as you say. This isn't meant to turn the system upside down, just to add a new option that would bring more people into the system, people who are able to compete less well under the current system. Yes, it's a little bit of social engineering, but it's a very hands-off flavor, and it would be applied to a small portion of new sims, so it shouldn't actually affect the broader land business much at all.

Walker, your proposal/proposal of others suggesting a "recycling first-sim" kind of program is not quite what Ryan Linden intimidated in his scheme. He sounded more like he recommended micro-auctions for niche buyers but it was merely floating a proposal and he himself obviously hasn't thought out all the consequences for his idea, which is that at least some major landowners are going to howl that it undercuts their value and renders meaningless their bids on the rest of the auction.

LL shows itself often capable of "social engineering" -- that's one of the annoying features of the virtual world toy -- but often without any means or willingness to study unintended consequences.

I'm quite aware of the values of things like Harlem neighbourhood projects. I myself lived in Mitchell-Lama housing (Nolan: quick, google, dbase entry, cross check, quick!) so I know how these ideas can work obviously.

But people proposing the "give-backs" are not maybe willing to face the music on having the entire sim to develop, then the entire sim to give back.

The idea that you hobble them in advance and tell them they have to stay non-profit to be in the give-back line is not going to work, let me tell you.

Everybody can start out very gung-ho about how they aren't in this for financial gain as a few pushy posters said in the residential zoning thread trying to discredit those who try to make back at least costs.

But then how will you judge this? How will that work? Let's say an architect lives in a planned residential community of this subsidized/micro-niche sim, where he and his confreres are free of the future painful thought of having to eat that sim and its costs, but can then give it back to the Lindens when they are done playing with their toy.

What if that architect uses that residential lot to do little mock-ups and projects and temp-rezzes for his architectural business that he runs elsewhere, as a profit? Just to take a hypothetical. He's gotten a Linden subsidized thingie, which he uses as a base to do his capitalist thingie elsewhere. I find that a popular combo in this game which gives me side-splitting laughter at least once a night. And, honestly, why shouldn't he do what he wants in his home? Do you mean he can't even test a vendor, and maybe have a few friends over to have like a Tupperware party where they get to buy the beta versions of his product for less? This is why I couldn't say "no commerce" in Ravenglass, because I didn't want to chill small business enterprise, but I just tried to keep the major laggy clubs, malls, and stores free of the residential space.

I worry about people who buy a sim, even in the subsidized micro-niche, but dont' have the right to sell parts of it off. That means they might as well be on the private island sim arrangement, it would make more sense for their project.

The whole point of managing a sim is to be able to sell off pieces if you need to, or have rent-to-buy, or reconfigure over two sims while you sell the backs of sims off to someone else who needs it for some project of theirs on the next sim, etc. etc. There is just too much that goes on in a game like this to hog-tie somebody with that caveat that they can't sell their sim if they are going to be giving it back.

I think that if tomorrow, the Lindens put 10 nice sims up on the auction, each one opening up at $676 price (let it be even $981) and said very pointedly, "we hope to encourage some residential groups and project leaders to bid so could we ask the land barons voluntarily to refrain from bidding on these pieces" they might get some howling, but they might actually get some understanding. The land barons know that if those "first-sims" are left in the market, they will get to them eventually, like I pointed out in the model where an Anshe or a Schwanson gets to the private-island market eventually. They will get to them first and foremost by bailing out failed projects of people who bit off more than they can chew. anshechung.com does that daily in a million different invisible ways. It's a service the Lindens don't provide and can't provide.

This discussion ceases to be useful to me after awhile when I see it becomes populated by people who haven't bought very much land, yet have really big ideas for how everybody else can pay for lots of land and do their idea.

I want to go back to hear the brilliant idea that those who LOST auctions should be consulted. I'd like to hear if there are really people in this game with realistic plans, with ready-made groups, with shared-tier already in the pot, who have been horribly frustrated night after night as they sought to bring, say, 8192 ($40) of paid tier in a coherent group to this auction to buy some land collectively for a project.

I honestly think we're not going to find too much of that. I think the fact that only one project came in for the old contest that Nberg won is indicative (and an example of why it was poorly done and can't be used as a justification for the artificial respiration of social democracy toys).

I'd like to see a group of irate citizens of SL with $40 in paid collective tier and a viable group of say 6 people, and come and say "We had $213 US RL to spend among ourselves and goddamn it we couldn't get a 8192 even on the Linden dollar auction for $50,000 LL to save our lives."

Why? Because I've done that, it isn't hard to do, and I marvel that nobody else does it.

So if the problem is that 8192 only gave everybody in the residential group 1024 to live on with a bit of park space, then I can only say, what, you couldn't get 4 or 6 more friends and go up to the 16k level then?

Honestly, does anybody ever study these numbers? They're tiny, if you could mobilize the kind of STAND UP, TIER NATION social movements I've been talking about.

I think it is one good idea to let residents choose which sims to put on auctions. It is also one good idea to auction huge blocks of sims at once because this helps huge projects.

However, it is absolutely vital to control supply of land. Otherwise we will see land prices drop to 1-3 L$ per sqm, which would be one blow in the face for everybody who bought land in the past. I think for Second Life it is better land prices don't drastically drop. This preserves trust in investing and gives Linden Lab more money to spend on new servers and better support. It is also one excellent L$ sink and allows Linden Lab to continue supply new L$ with stipends and dwell bonuses. You can only put in what is taken out somewhere.

I also believe that private island sims should be included into the auction system and their supply controlled. All land should go through same system. This is one matter of fairness to mainland land owners. I don't want compete with the mainland by being cheaper, I want compete by being better.

Prok, I'm just saying you get the land itself on a not-for-profit basis. Once you have it, you can do what you want.

I think there's room in the economy for a small experiment of this sort that would have much of an impact on the broader land market.

But you're also right, I seem to have hijacked this thread, so I'll shut up about my idea here unless it's specifically addressed some more. Maybe I'll post it elsewhere. And hey, it wasn't even my idea, now was it?

*Walker Spaight starts flame war with himself over who thought of the idea first...*

Walker, fortunately this thread didn't turn into a flame war yet, did it? Or did I miss something? *Peers through smoke...where there is often fire...*

Well, and my point about getting something on the "not-for-profit" basis...and then using it as a springpad to run your business elsewhere and make a profit either there or elsewhere, is that it's DAMN UNFAIR, Walker. It's like all those freebie 4096's of oldbies, or the sims that get the upfront purchase price waived, or the big projects that gets loads of free Linden administrative/scripting whatever help whereas others pay for that service.

It's just unfair, to those land barons who are buying on the open auction and eating the costs before, during, and after, putting out communities and open-market land for people to do whatever they want, for the Lindens to make subsidized sims for the "special" who are encouraged...who then get to grab that subsidy and springboard to businesses and reputation and financial gain (and the two are intertwined here obviously) off the backs of others essentially propping up the auction.

I just don't get how you can justify that. I buy something at non-profit rates, subsidized as a small experiment by the Lindens -- because I'm one of those groups being encouraged by the Lindens now -- I then get to be free of the fear of sell-back costs or ROI concerns, and I get to run my business happily and milk that sim or others, using that sim as a launching pad, while everybody else huffs and puffs on the regular auctioned sims? Why?

If the point is...to have some richer, more managed, more intellectual content, well, Ok, let's say that! Then...let's examine whether there can't be other ways to pay for it? Like 6 people getting together and just pooling their tier and money and buying on the regular auction?

Hm, you may be right. I'm doing some more thinking.

(No, no flame war, except between me and myself. No worries.)

Just to be clear, Ryan's proposal doesn't seem to me to have any direct influence on who can win the auction, or at what price.

All it does is give residents the power to have influence over how the auctioned land is bundled, and which configuration they prefer.

The "pre-entered first-bidder" thing is not to give someone an advantage (what advantage ? ). Its just to make sure that the land gets sold - that someone has no choice but to buy it. Anyone can then bid, including the land barons. No change there.

As for the limited distribution list, my guess is Ryan was afraid the wider population would read it less than carefully, get the wrong end of the stick, and start panicking prices down. I'm sure there was no intention to leave everyone else out of the discussion. This was just a preliminary feeler, to be followed by open consultation if the idea got past the first hurdle.

Email distribution list was a bad, bad mistake. I'm sure he will have been hauled over the coals for it, and I'd expect apologies soon.

Humble apology was received. The CC list was blank on the apology.

First law of the internet: Don't give away your spam list for free.

Buster

Oh, I get it! I agree to buy a SIM at $980.00. Then Lindens let people bid on it so I end up paying $1200.00. And if I cancel the order, I get to pay $100.00 for nothing! What a deal!

I am fed up with the shit. If anyone of you want a private Island, mine is for sale on EBay. See thread in Land for Sale.

This letter sure did panic prices down on the auction, as you can see from prices plummeting down to $2/L in the days following this letter. But even before this, some of us vowed to stay off the auctions until the Lindens sorted out their position on the telehubs. And the new patch's continuing problems are making some people just stay out of the game until it blows over, or quitting altogether.

I'm still trying to see how this is going to work. I don't know if enough market-testing was really done. If anything, that "spam list" Ryan sent us reveals that the Lindens simply don't have very many customers at all from the group called "those who have bid on the auction in the last few weeks" let's say. Maybe because the auction was filled up with very hard to figure New Continent land, that pool of bidders was smaller. Maybe due to Ansheland's appearance, that pool was smaller. But the point is, it isn't some giant group. Read Tiger Crossing's report on auction bidders. There are what, 5-10 really big landowners who always bid. There are what 20-30 perhaps medium bidders who trade at smaller levels. Then there are what 100-200? end-users of big parcels that are for projects or for subdivides. Maybe a thousand at most who buy a parcel for final end-use. Am I wrong? The overwhelming majority of people on a single parcel buy their land in-world, not on the auction, because they are afraid of the auction, don't understand it, and are scared they will get locked into some bidding war that will force them to eat an overpriced parcel. And they aren't far wrong. Going on the auction takes a bit of education, and sometimes the hard-knocks school of mistake.

In these micro-auctions, the already tiny pool of the medium traders and end-users with group projects on say, something more than 8192, and more likely 16k, are going to be pitted against each other, instead of just ordering up private islands. I suspect the private island sales are really lagging. I know I personally will never buy a private island, even though I've spent the equivalent of a private island on other parcels. Why? Because of poor service reports and the preference for on-the-grid fly-bys bringing socializing and commerce absent from the private-island world IMHO.

So let's say 2-3 of us with a group project idea are now brought into a micro-auction where we have a stab at getting a whole sim, that doesn't often come on the boards. The process is driven by people e-mailing the Lindens I guess. Then a baron can also come in, too, which might defeat the purpose but you can't in advance say "no barons allowed in micro auctions". So let's say the end-users with group projects instead of the wholesalers are now once again driven to bid up a $980 piece to $1200 or more likely $1500. It's as shame, but I know exactly what THAT is like -- it seems the "cost of doing business" of competing against the land barons is now priced at something like $300-$400 to "buy your seat at the auction".

Now a savvy and manipulative land baron might just get their $100 refund after winning an auction like that just for driving people like me out of the market. The $100 refund cost actually isn't a very steep price to prevent that from happening.

What will the time cap be on this $100 refund? I often see people buy huge tracts of land they have to dump after 30 days as the harsh reality of tier, not so painfully felt on day one, inevitably comes on day thirty of a project.

Aha - it never ocurred to me that if the Lindens implemented this they might withdraw the "direct fixed price island purchase" and use this instead. I assumed this was an extra alternative, not an "instead of".

I would be totally opposed to withdrawal of the fixed price island. I've never bought one yet, but I don't want to lose the option.

With that proviso, this suggestion seems fairly innocuous, but odd. If one group puts together something it wants, and requests it, exactly to its requirement, then someone outbids them at auction and maybe splits it up for profit.

Maybe thats not what he meant ? Maybe only those who emailed can bid. No, thats nonsense, how could they know what others had suggested ? And if you can bid once the auction is announced in the open, then obviously anyone can. I wonder just exactly what is being considered here. Doesn't seem to quite make sense.

No Patrick, you would only have to pay if nobody outbidded you.

And I'm sure you could bid on it yourself.

Also,

"Once a single sim was designated part of a group by request, it would not be
auctioned individually but as part of that group."

Should that be as part of the largest group its a member of?

Also, What if someone was willing to pay 1400 for one sim, and another was willing to pay 1500 for another sime, but one person was willing to pay 980 per sim for the two?

Who would it go to? Via this system it would go to the person willing to pay 1960 rather than 2900

I'm with you. I have reversed course completely and stopped buying land, and in fact I've been reducing my holdings. I'm down from two sims to one. I've given my reasons elsewhere.

One of the most important factors in commodity markets is political stability. Investors will not enter the market if there is a chance the rules might change -- regardless of whether the changes might seem "beneficial" to some. Change = Risk. So investors go to the sidelines until the picture clears.

The changes that Ryan ran up the flagpole are quite shocking. I wounder how folks who spent $10 or $15 per m2 at auction feel about it.

I've heard people complain that land barons cause high prices. What people fail to consider is that land barons ...

DO A LOT OF WORK.

Not makework, not imaginary work, but work that SOMEBODY has to do. Like dividing up parcels into reasonable size lots, and laying out those lots to make optimal road frontages, waterline allocation, etc. It isn't a checkerboard, its very time consuming. I've done some myself so I know.

They also put up with endless IM's from people who want a lot cut in half or two lots joined to one or whatever. They answer a lot of questions and handle a lot of complaints.

If land barons didn't do that, then some Lindens would have to do that , and YOU, the SL customer, would have to pay for that somehow. I'll bet the land barons work a LOT cheaper per hour than your average Linden.

If you just let everybody cherrypick land, then nothing will allign and you won't be able to find four 1024 lots to buy to make a 4096 that's square. Ask any land baron: many customers buy more than one lot -- they buy several lots and combine them. The way land barons partition the land, you can get pretty much any size you want by buying up adjoining lots. If it weren't for land barons the world would not be that way. How could it work?

I'm afraid the cure will be worse than the disease.

In a commodity market like SL land, investors create liquidity! You can always sell your land quickly by dropping the price. If not for investors, you would have to lower your price MUCH more because you could only sell to somebody who wanted to USE the land. So you have to WAIT WAIT WAIT. If there are investors, you can dump your land for "wholesale price" at any time. (I know, I just did it!)

So you get A LOT MORE for your land when you sell it. If you just spent $10,000 on a plot of land, do you care that you could sell it for $10,000 later, or in a fire sale worst-case situation maybe $7,000? Or would you prefer to spend $5,000 for the land and have to release it for $0 later if you want to move without waiting a year for somebody to want that particular piece of land?

Having a pool of investors contributes to price stability. When prices fall, investors buy, and when prices rise, investors sell. This has a stabilizing effect, acting like a capacitor in an electrical circuit. Prices hover near "value", instead of fluctuating wildly with demand.

(Of course, in times of panic or bubble, speculators can contribute to large swings, but that effect is truly neglible compared to the alternative of having even wilder swings much more frequently, which would be the case in a less liquid market.)

Right now there is a huge amount of land for sale, all sorts of land partitioned all sorts of ways. The prices on the land reflect what the community is generally willing to pay for various kinds of land. This is a real benefit, because you can get ANYTHING YOU WANT. If all land was the same price, the popular types of land would be snapped up and sat on forever. You would not have the choice to pay more to get something good.

Now THAT would be a soviet style economy, with all the benefits.

Buster

Land Barons work, oh please work is a rl job. SL is not RL. Give me a break.

Work: busting your ass for a paycheck, that pays all the bills week in and week out.
Work: breaking a sweat, or mentaly exausted.
Work: Paying RL taxes.

Work: having to put up with land barons over inflating the auction process so the little guy has to buy from them yeah thats work too.

Amen, brother speak on it.

And they do the work of liquidating for people bailing out, and they do the work of holding parcels on their own tier for 3 days or 14 days even sometimes until people get their money together or wait and all kinds of unheralded activities.

Catherine just hasn't understood what it is like to work anything other than a 23k island -- and believe me, that's a lot of work, too.

I'm dismayed at what I see as a pervasive anti-business and anti-commerce climate in this game.

I'm seeing more and more that it isn't an accidental byproduct of various typical MORPEG type experiences, but growing out of the philosophies of the founders, which tend toward the socialist utopian idea.

On the one hand, LL sells land on the auctions at a hefty price and collects a hefty tier. But on the other hand, they are willing to provide all kinds of subsidies, and fete all kinds of idea people who don't have money or paid tier but just want their ear and want them to do MORE subsidies.