President Sirleaf’s Favored Citizens: Monrovia-Landlords


By: J. Yanqui Zaza


The Perspective
Atlanta, Georgia
February 3, 2017

                  



 
 
 
 
President Ellen Johnson Sirleaf

Favoritism or Special Interest! President Dwight Eisenhower, in his farewell speech, on 01/17/1961, warned Americans about many issues such as protecting special interest. In Liberia, the warning about special interest came by way of three separate violent actions: the Rights and Rice Demonstration on April 14, 1979; the military coup on April 12, 1980; and the fourteen-year civil war launched on December 24, 1989. Well, instead of instituting policies that would create a level playing field, President Ellen Johnson Sirleaf government has, for example, allowed real estate owners to inflate rent charged to residents, businesses and government, say her critics. Are her critics right? Sadly yes, if rent payment is analyzed by using the cost of living of all countries in Africa prepared by Global Poverty Guide. For example, the numbers within in the chart imply that an apartment that rents for $1,000 in New York City will cost $540 in Liberia, $330 in Ghana, $440 in Sierra Leone and $270 in Gambia. Certainly, the cost of living in Liberia, one of the highest in Africa, does indicate that elites demand more money from tenants.


Liberia

S. Leone

Nigeria

Guinea

Ghana

Gambia

$0.54

$0.44

$.45

$0.40

$0.33

$0.27

Source: (http://www.globalpropertyguide.com/Africa/currency-value)  
How come Liberian tenants pay more money for housing than all of the countries on the list in the West Africa sub region as indicated above? First, there is a family or business relationship between political authorities, and key property owners in the country where government is willing to pay exorbitant high rent for overvalued properties. Second, the government does sometimes waive taxes owed by the landlords and in effect gives public funds (welfare payments) to Monrovia-landlords. Third, instead of the Ministry of Commerce exercising its authority to monitor rent charged to residents and businesses, it allows Monrovia-landlords to include replacement cost within rental payments. Fourth, real estate owners do pay minimal real estate tax because they deduct replacement cost from real estate taxable income generated from rental buildings that have been in business for over 28 years and, or 40 years.

 NAMES OF MINISTRY/AGENCY/COMMISSION

2015-2016

2016-2017

2017-2018

2018-2019

3) CIVIL SERVICE AGENCY (107)

80,000

80,000

80,000

82,578

5) INFORMATION MINISTRY (109)

133,388

127,036

127,036

131,131

13) ANTI-CORRUPTION COMMISSION (125)

 150,000

 157,500

 150,000

 154,835

18) JUSTICE (202)

369,420

429,450

409,000

422,185

29) MINISTRY OF EDUCATION (301)

129,000

481,000

489,000

496,000

39) NATIONAL INVESTMENT COMMISSION (116)

190,000

199,500

150,000

152,250

SOURCE: LIBERIAN BUDGETARY DOCUMENTS. https://www.mfdp.gov.lr/index.php/the-budget#
What is a replacement cost? It is the amount that an owner sets aside to recoup his/her investment and, or replace the original property. However, investors should exclude replacement cost from profit-making buildings on Camp Johnson Road, Down Waterside, located in Taylor Major Compound, etc. (i.e., not personal homes) that have been in business for more than 28 (residential) and, or 40 years (commercial) in accordance with the International Financial Reporting Standards and Generally Accepted Accounting Principles. The Central Bank of Liberia did use the 40-year-rule as per page #15 of its 2015 Audited Annual Report.

Now, as explained above, real estate Investment, unlike investment in diamond, gold, etc., has domestic clients that are easily exploited for different reasons. While Liberian officials do not own any of the 28 governmental rented buildings as seen in the pre-1980 era, real estate owners still wield influence within government circle. Importantly, real estate investment does not only yield quick and huge return, but its “ Investment” can be inherited, unlike “Labor Investment,” according to Thomas Piketty, author of a book called “Capital In The Twenty-First Century.” For instance, the 10 billionaires of Africa such as A. Dangote, $13.8B; Nicky Oppenheimer & Family, $7B; N. Sawiris, $5.6B; etc. got their wealth from real estate and others, but not from Labor Capital such as law, medicine, etc., (Forbes 2011). I have yet to read about any Liberian who is wealthy because of earnings from law, medicine, etc.

Investing to make a profit is good, if the source of the funding is not from government’s coffer. Regrettably, public reports do indicate that many officials used ill-gotten funds to purchase real estate, diamond, gold, etc. If there is any doubt about officials siphoning government’s resources, please read President Sirleaf’s last State of the Union Address. She stated that she has failed to fight the war on corruption, which she did call as enemy number one in 2006. Worse, officials do not only use ill-gotten wealth to purchase real estate, but government do not discourage Monrovia- landlords from inflating rent when many expatriates and nongovernmental agencies are in search for residential homes and business-offices. Well, guess what, inflating rental payment does not end with a few landlords, because landlords are now demanding more money from tenants.

The Sirleaf government did not end the practice of awarding favor to real estate owners. In 2006, while asking foreign creditors to forgo Liberia’s US $4.7 B debt, it did use portion of the money received from international donations to give two separate sets of money to real estate owners. But her government did layoff poor salary-earners. The government saw reason to pay real estate owners arrears in rental payment and abate property taxes investors owed the government, but did not see reason to keep poor salary earners on the payroll or compensate families of doctors, lawyers, engineers, etc. who lost their lives due to the civil war.

Government will always end up increasing income inequality, when it donates financial benefits to one group of society, but at the same time reduces the purchasing power of another group. So, President Sirleaf did indirectly empower the Monrovia-landlords when her government gave them a portion of the peace-dividends, but did deny poor-salary earners a portion of the peace-dividends. When government pays US $375,000 per year ($15M after 40 years) to a landlord, as per public report and FrontpageAfrica, is an example of how landlords effectively use government’s largess to exert influence such as inflating rent charged to tenants.

Since elections do not guarantee that a democratic government will enforce “Price Control of essential…commodities…” as evidenced by the failure of the Sirleaf government, Liberians should exclude replacement cost from rental payment of qualified buildings. Tenants will benefit and Liberia will minimize chaos and catch up with the cost of living ($0.27) in Gambia, a peanut producing country, that Mr. Adama Barrow, a successful real estate agent, is now the President.


 About the Author:Zaza can be reached at: jyanqui@aol.com.


j. yanqui
Here is the chart.


Congo, DR
$0.61
Angola
$0.56
Djibouti
$0.56
Seychelles
$0.55
Liberia
$0.54
Eritrea
$0.53
CAR
$0.53
Zimbabwe
$0.51
Sudan
$0.48
Sao Tome & P.
$0.48
Comoros
$0.48
Cape Verde
$0.47
Mauritius
$0.47
Nigeria
$0.45
Namibia
$0.45
Kenya
$0.45
Guinea
$0.45
Mozambique
$0.44
Sierra Leone
$0.44
South Africa
$0.43
Botswana
$0.41
Gabon
$0.41
Eq. Guinea
$0.40
Rwanda
$0.40
Cameroon
$0.39
Guinea-Bissau
$0.39
Cote d'Ivoire
$0.39
Ethiopia
$0.38
Togo
$0.38
Niger
$0.38
Burundi
$0.37
Swaziland
$0.37
Senegal
$0.37
Benin
$0.37
Mali
$0.37
Burkina Faso
$0.36
Chad
$0.36
Zambia
$0.35
Lesotho
$0.35
Tanzania
$0.33
Ghana
$0.33
Malawi
$0.31
Congo(Brazza)
$0.30
Mauritania
$0.30
Uganda
$0.30
Madagascar
$0.27
Gambia
$0.27


Africa: Currency +/- valuation index
This is a cost of living indicator. The figure shows how much how much a bundle of goods and services costing US$1 in the US would cost in other countries (similar to The Economist's Big Mac Index).
To arrive at the figure, the Global Property Guide takes the difference between the IMF's nominal GDP figures, and their purchasing power parity GDP figures for the latest year available.
Note that currency undervaluation (as measured by PPP) is not a good predictor of future currency movements.
These cost of living indicators refer to data collected annually (for date of collection, see Data FAQ )
Source: calculated using figures from the IMF World Economic Outlook Database
v96
j. yanqui at 06:20PM, 2017/02/04.
Theodore T. Hodge

Thank you, Brother Zaza, for raising such an insightful topic, as you usually do in your pieces. But please allow me to make a few quick observations here.

Firstly, the title of your piece is: President Sirleaf's Favorite Citizens: Monrovia Landlords. But in your opening paragraph, you proceed to tell your readers about the cost of housing in Liberia. Are you insinuating that the cost of rent (or rental expense) in Monrovia is similar or equal to that in Zorzor or River Gee? If not, what are the differences and what cause the variations? Could one simply examine the cost structures of commodities in Monrovia and draw a definitive conclusion about Liberia as a whole?

For example, in your opening paragraph, you state that "an apartment that rents for $1000 in New York City will cost $540 in Liberia." Did you mean Monrovia, instead of Liberia?

Secondly, you do take the liberty to conclude that the huge rise in housing or rental cost is due to government inefficiency. That may be partly true, but did you consider other contributing factors such as the population density of Monrovia, the number of new housing units built, and general wages?

It is no secret here here in America that the cost of housing in some major metropolitan areas such as New York City, Washington, DC and San Francisco differ vastly from other location such as Oklahoma City, Little Rock or Salt Lake City.

The case of Monrovia should be no different. Our capital city has been vastly over-populated since our experience with civil wars. The vast increase in population has not been addressed by the private sector building new housing units. If that is true, are we not confronted by the age-old economic truism that draws correlation to supply and demand? What I am suggesting here is that the issue of inefficient or unfair governmental policies may be a minor contributing factor. The main issue could be the huge increase in population coupled with stagnant or even diminishing housing development. In common economic parlance: Too many tenants chasing too few housing units. Perhaps?

Theodore T. Hodge at 10:42AM, 2017/02/05.
j. yanqui

Hi Brother Theodore T. Hodge,

Many thanks for your kind words.

I don't have any data to prove your assertion that the high cost of housing is due to the demand and supply of housing. I think that the friendship or connection between government officials and real estate owners does play a major role in determining the high rent in Monrovia rather than the demand and supply of housing. However, let us accept your statement.

In any case Sir, a good government should not allow the demand and supply to drive up the price of essential commodities, including but not limited to utility service (water, light, telephone). Housing is another essential commodity if you review the rental policy of NYC and London.

1) The federal or NYC does provide housing allowance for the poor, thereby, reducing the cost of housing.

2) State/local municipality has rental program to create an incentive to retain qualified employees. In NYC, there is a Rent Control and, or Rent Stabilization program. For instance, the former Mayor of NYC, Mr. Ed. Koch did live in a $475.00 Rent Control Apartment in the 1980s. Also, the Daily News, a local newspaper of NYC reported on 7/7/16 that "...NYC Landlord Group sues Rent Guidelines Board over rent freeze…"


Further, in London, rent for the poor is reasonable. This is a quote from the link (www.quora.com/how-do): "…the very very poor,London is by far a better place. The very poor in London will receive free housing, free benefits for looking for work, they will never freeze to deaths in apartments etc."

Okay, it is difficult to institute such rental policies as is in NYC without an enactment of a legislation. Alternatively, the Sirleaf government should have invested into constructing low income housing in order to reduce the cost of housing? Ok, forget about erecting low income housing. Why the government did not invest into programs (rice production, construction of clinics, etc.) to create incentives for many residents, including former combatants to relocate into rural towns, thereby reducing the demand for housing? Instead, the government began paying high salaries and excessive allowances, which increased the money supply in Monrovia, encouraging real estate owners to ask for more money. Budget documents do indicate that the government continues to spend about 69% of the budget on salary and related cost.

The President spent a good amount of the money to travel around the world, but forgot about infrastructure that would have created an incentive for private investors to relocate into rural towns such as Zorzor. But wait a minute, what if the Government had invested into gold or diamond mining, thereby increasing economic activities within our town? Rural residents would not have relocated into Monrovia, and there would be no high demand for housing. Well, the President claims that the government is inefficient and is unable to manage these kinds of activities. But the true story is that President Sirleaf does not want the government to interfere with the lucrative money making activities of her special friends. Remember, the privileged friends do invest into lucrative natural resources such as real estate, diamond, gold, etc.

Now, please allow me to revisit certain basic principles or rules:

1) Real estate, which has a significant impact on the cost of living, is an essential commodity and should be guided from price gouging, especially when housing is limited or difficult to obtain. In Monrovia, the Price Control Inspectors do visit local merchants to ensure that prices for food, gasoline, shoes, etc. are not inflated, but real estate owners charge rent at any price. Why?

1.1) The cost of a vacant land in Monrovia is going up. Why?

2) Price. A price or rental payment is made out of cost (replacement cost, real estate taxes, payroll, miscellaneous expense, interest expense others, etc.) plus markup/profit).

2.1) Replacement cost is an estimated amount that is included within the rental payment. The amount is also deducted from rental income, thereby, reducing an investor's rental income. Therefore, when a commercial property has been in business for more than 40 years, the replacement cost should not be included within the rental payment nor should the investor be allowed to deduct the replacement cost from the rental income. That is the rule for a commercial property.

Real estate owners in NYC usually follow the policy of replacement cost. However, many of the owners do not keep real estate properties for more than 28 years (residential) and, or 40 years (commercial). The owners usually sell the properties to earn capital gain.

Yes, the rent is high in NYC. This is because owners are frequently selling and buying real estate properties in order to earn huge capital gain. So, the rent for an apartment or building will usually increase once a new owner pays an amount that is higher than the original cost. For example, an investor who sold his/her $100,000 business property for $700,000 had a lower replacement cost than the new real estate owner.
The new owner has to include the replacement of the $700,000 in computing the rental payment and not the replacement cost of the $100,000 property.

This is my response to the second issue:

"Are you insinuating that the cost of rent (or rental expense) in Monrovia is similar or equal to that in Zorzor or River Gee? Did you mean Monrovia, instead of Liberia?"

No, sir. You should go to the link and see that someone else did compute the cost of living of the countries in Africa.

More so, when people compute, for example, the per capital income, the number represents a group of people and does not imply that each citizen made the same amount. In fact, many of the people included within the computation usually do not earn money.

In another example, it is reported that rent payment eats up about 45% of disposable income of NYC residents. The number does not imply that NYC non-employees or the poor NYC residents who receive rent subsidies from the Federal did earn money? No.

However, the number (ratio) would have been higher, if the NYC non-employees or NYC residents receiving rent subsidies were not included in the computation. Or the cost of living in Liberia would have been higher if the cost of living of rural towns such as Zorzor (i.e., a low cost of living in Zorzor) were excluded from the computation.









j. yanqui at 10:31PM, 2017/02/05.
Martin K Scott
Hey Comrade J. Nikita Zaza----so what if an apartment " that rents for $1,000 in New York City will cost $540 in Liberia, $330 in Ghana, $440 in Sierra Leone and $270 in Gambia"?? Aren't those apartment other people's private property? If so, don't they have private property rights over their private property?

In other words, don't the owners of an apartment have the right to rent (lease), sell or give away his or her private property to anyone for FREE, if they want to? Of course they do. Read the Liberian Constitution (Article 22 a&b).

Look. If you think $540 is too high for poor Liberians, why don't you and your comrades become landlords and rent out your apartment for $270, like the landlords in Gambia? Who's stopping you?

I find it appalling that, despite the disastrous history of price controls, going all the way back to the days of the Roman Empire and ancient Babylon, you want the Liberian government to use its police power to set prices of other people's private property (apartments,rice, pepper, bitter balls, okra, taxi fares, etc) in order to make it AFFORDABLE!

Are you that economically ignorant???
Martin K Scott at 10:41PM, 2017/02/05.
j. yanqui

Hi MARTIN K SCOTT,

The article states that the government is allowing Monrovia-landlords to inflate rent charged to residents, businesses, non-governmental agencies and the government. For example, owners of commercial
properties located within Monrovia continue to include replacement cost (i.e., depreciation expense) as part of the rental income. In capitalistic countries as it is practiced in Liberia, many good governments do encourage investors to follow the rules of operating a business. Investors should include the regular business expenses and should not inflate prices such as including replacement cost of properties that have been in business for more than 40 years. Presumably, the government is not discouraging real estate owners from inflating rent because the real estate owners are friends of President Sirleaf.

Therefore, I stated that since the Price Control Unit of the Ministry of Commerce monitors the prices of essential goods and services, it should also monitor rent charged to tenants to ensure that owners of commercial buildings (i.e., not building used for personal residence) do not include replacement cost in rental payment for properties that have been in business for more than 40 years.

Sir, good governments, even within capitalistic countries, are aware that investors will search for any means to get more profit at the expense of society. That is part of the reason why good governments usually establish agencies to monitor prices to ensure that profiteers do not inflate prices, even at times when goods and services are limited on the market or it is difficult for merchants to obtain the merchandise and services for sale.

So sir, the issue is not price control. However, I mentioned price control because the government of Liberia mandates the Ministry of Commerce to monitor the prices of essential commodities and services, which include housing. The Ministry of Commerce does monitor local merchants to ensure that the merchants do not inflate prices. If you disagree with the price control law that the Ministry of Commerce is mandated to enforce, then you should call upon your Lawmaker to change the law.


Sir, I have included "Authorized" information about yellow taxi operating in N.Y.C.

NYC sets the price in order to prevent drivers from inflating price, especially so for a visitor who might be unable to determine or prevent taxi owner from inflating a price for a ride.

J. Yanqui Zaza


"Safety Tip: Ignore offers of transportation from solicitors in the terminal. Soliciting of ground transportation is illegal and many illegal solicitors are unlicensed and uninsured. To obtain ground transportation information, please visit the Port Authority Welcome Center located in the arrivals area of each terminal, where uniformed staff will be happy to assist you. Alternately, you may head directly for the taxi stand located outside each terminal for safe and legitimate transportation. Ignore non-uniformed people offering to assist with baggage. Seek out uniformed porters or airline employees for baggage assistance.

JFK Taxi Information:

Important Tips:

Tipping is customary for good service.
Taxis at JFK Airport charge a flat fare of $52 for trips between the airport and Manhattan. Taxis impose a $4.50 surcharge during peak hours (4-8 p.m. weekdays, excluding holidays), for a fare of $56.50.
There is also a NY State tax of 50 cents added to trips within New York, but not for trips to NJ.
One fare pays for all passengers to one destination.
Four passengers (five in minivans) is the limit for New York City cabs.
Meter must read $3.00 at the start of the trip (except for JFK-Manhattan $52 Flat Fare trips).
Please take your receipt.
Sample Fares from John F. Kennedy International Airport:

These samples do not include tolls or tips.

Between JFK and Manhattan -- Flat Fare is $52 to the first destination (plus tolls and tip). The taximeter and receipt should reflect that this trip is a flat fare. There is no $1 peak time or 50-cent night surcharge for these trips.*

Trip Fare Range
Between Terminals $ 4 - $14
To the Bronx
Co-op City
The Hub (149th& 3rd Ave.)
Riverdale
$52 - $57
$48 - $53
$63 - $68
To Brooklyn
Downtown
Coney Island
$59 - $64
$42 - $47
To Queens
Citi Field
Main St. & 60th Ave.
$28 - $33
$24 - $29
To Staten Island
New Dorp Lane
Victory Boulevard
$67 - $72
$74 - $79
To LaGuardia Airport $34 - $39
To Newark Liberty International Airport $97 - $102 (+$17.50 surcharge)
Flat Manhattan Fare
(Does not include tolls, tip) $52
Nassau/Westchester, NY: The amount on the meter from JFK to NYC boundary PLUS double the amount from the city boundary to final destination.

Connecticut/Suffolk/New Jersey/north and west of Westchester County: Price is negotiated between passsenger and driver at the start of the trip.

*Flat Fare Policy: If passengers request multiple destinations within Manhattan, the fare is $52 to the first passenger's destination. Thereafter, the meter will be engaged and a new trip and fare occurs.

Taxis are regulated by the NYC Taxi and Limousine Commission

For taxi compliments, complaints and lost property, call 311.

Taxis are regulated by the NYC Taxi and Limousine Commission.

Taxishare Services: To reduce costs, passengers traveling to similar destinations may also share taxi rides. Connect easily with other travelers going your way using Bandwagon, the taxisharing app. Download the free Bandwagon app here and request a taxishare upon landing, or just look for Bandwagon's taxisharing agents at terminal taxi lines during peak travel periods (Monday, Tuesday, Thursday, Friday and Sunday afternoons and evenings).

Car, Van and Scheduled Bus Service is also available at JFK.

Reservations for shared-ride van and private car services can be made at the Port Authority Welcome Center located on the Arrivals level of each terminal. If the center is closed, there is a convenient self-service kiosk nearby where you can contact authorized shared-ride or private car services.

Authorized airport vehicle services:
j. yanqui at 05:03AM, 2017/02/06.
Theodore T. Hodge


Thanks again, my brother, for revisiting your article and providing clarifications on issues I raised. Let me assure you that I do not disagree with your premise that government should enact and implement policies to control the basic prices of commodities. Even though the prices of commodities should be dictated by the markets, I also believe that government does have an essential responsibility in the process... that is through regulation. So I do concur with your central premise.

However, my point of contention is with your conclusion. You seem to be saying that the sole reason for the tremendous rise in rental cost, or real estate in general, is government inefficiency. I was only trying to point out that there could be multiple reasons springing from uncontrollable social factors, such as the civil wars, that have caused the meteoric rise in population of the city in the first place.

Thanks again for the great articles. I know it takes tremendous time and commitment to delve into such research as you do from time to time.
Theodore T. Hodge at 08:16AM, 2017/02/06.
Martin K Scott
Comrade J. Nikita Zaza--you say that the "government is allowing Monrovia-landlords to inflate rent charged to residents, businesses, non-governmental agencies and the government". But hey, are they (residents, business, etc) that stupid to keep paying "inflated rent" to real estate owners who are friends of President Sirleaf?? Are these tenants a bunch of suckers for Sirleaf and her friends?

Even if they were suckers, .what fish do YOU have to fry in a PEACEFUL, VOLUNTARY, MUTUALLY AGREEABLE economic transaction between a WILLING seller (landlord) and a WILLING buyer (tenants)?... By the way, are you a poor man's lawyer?

Martin K Scott at 11:18PM, 2017/02/06.
j. yanqui
Hi Brother THEODORE T. HODGE:

Thanks for the kind words and your concern about the inflated rent payment issue.

I am revisiting this issue because you claimed that my conclusion was based on irrelevant factor (i.e., replacement cost/depreciation of buildings over 40 years). Also, it is important for us all to understand the issue of rental payment since it is one of the factors that increases the cost living in Monrovia. Further, I am hoping that someone like yourself should begin to use his excellent and analytical writing skills to expose the idea of using overstated real estate value, accounting gimmicks, illegal applications of laws and non-business expenses used by investors to take more away from the Liberian government, businesses, and residents. Such an effort on your part might help Liberia to save money for development and prevent those conditions that usually create the environment for another chaos to be bred.

The issues:
1) Replacement cost of buildings over 28 years and 40 years are incorrectly included
within rental payment and are incorrectly used to reduce rental taxable income.

2) Increase in housing cost is based on speculation.

3) Real estate owners Collude and increase the cost of housing.

4) Real estate owners have cozy relationship with government officials.

5) Real estate owners should calculate a price or rental payment by using a
profit margin between 10%-15%. Or real estate owners, government and civil society
should meet and determine a reasonable profit margin for real estate investment.

Sir, please allow me to use NYC for our discussion since you used the city in your argument. Few decades ago, companies, due to the high cost of living, which did increase the cost doing business in NYC, left the City and relocated into other cities with low cost of living. Public records indicate that housing cost eats about 45% NYC residents' disposable income.


Now, let us visit the issues that should determine rental payment. These factors are payroll, real estate taxes, repair, miscellaneous expense, others and cost of replacement of the building (i.e., depreciation expense). However, I am sure that you will agree with me that speculations (i.e., market/appreciation) and, or depreciation (i.e., in case of commercial property) do significantly increase the cost of housing/rental payment than any other factors.

In NYC, for example, a 2004 Shopping Mall that was on the market for $15M was sold for $60M in 2008. The government did not ask question because it generated more real estate revenue based on the new assessed value $60M and got additional tax based on net capital gain of $30M ($60M minus $15M plus expenses). Also it might have earned more money on its investment in real estate portfolios. Further, the government did save money because it did reduce funding for its employees' retirement benefits since the employee retirement benefits' investment in real estate portfolios has increased in value.

Investment market (Wall Street) was happy because it did earn more fees from trading $60M real estate value rather than the small fees earned on trading $15M real estate value.

Real estate owners also won because they realized a huge capital gain, which did not require any cash from the pocket beside the increase in real estate tax assessed on the $60M and not on the $15M.

What if NYC officials insisted that real estate owners should offer a price between 10%-15% of the profit margin? In such a scenario, the shopping mall would be sold for $22.5M and not $60M. The replacement cost for the 60M would be $1.5M, while the replacement cost for the $22.5M would be $562,500 for each year over the entire 40 years.

Consequently, residents will be required to pay additional cost of the portion of the $562,500 replacement cost or the portion of the $1.5M replacement cost. Again, many of the officials in NYC own personal properties and, or commercial properties, therefore, they do not care about the overvalued of real estate properties. In fact, many of them say that their real retirement benefits are the value of their homes, not necessarily the social security benefits or pension benefits, if available.

In Monrovia, I discussed about the replacement cost (depreciation expense) of commercial properties that have been in business for more than 28 years and, or 40 years. I stated that it is incorrect for real estate owners to include replacement cost in the rental payment and also deduct it as an expenses from the rental income, according to rules under Generally Accepted Accounting Principles. Additionally, real estate owners are using speculations to increase the value of real estate properties at the expense of society. For example, the rental payments of 481,000, 489,000 and 496,000 for the offices of the Ministry of Education are very high for a market in Monrovia. Why? If I may ask, how many tenants within Liberia can afford to pay such an amount for a year?

I am sure the population in Monrovia has increased. But how many of those would-be Monrovia residents who are relocating from rural towns to Monrovia can afford to pay the rental payments businesses, NGOS or foreign expatriates are paying? Are you sure there are "Too many tenants chasing too few housing units?"


Not many of them, if any.

Brother Theodore T. Hodge, please help Liberia in reducing the cost of housing in Monrovia.

Thanks.


j. yanqui at 03:05PM, 2017/02/07.
j. yanqui

Mr. MARTIN K SCOTT,

Sir, your question "By the way, are you a poor man's lawyer?" is a surprise to
me because you have commented on many of my articles.

I have joined brothers and sisters who believe that it is the responsibility of all of those
who are knowledgeable to inform Liberians, who should encourage government,
investors, and other related parties to search for ways and means to reduce income inequality.

Thanks.

j. yanqui at 03:39PM, 2017/02/07.
Theodore T. Hodge


Mr. Zaza, I did not say your conclusion was based on an "irrelevant" factor. I did not say that all. I did not say that governmental inefficiency or bias is irrelevant; I said it was not the sole factor, but one to be considered among other mitigating factors. Here is a direct quote of what I wrote:

"However, my point of contention is with your conclusion. You seem to be saying that the sole reason for the tremendous rise in rental cost, or real estate in general, is government inefficiency. I was only trying to point out that there could be multiple reasons springing from uncontrollable social factors, such as the civil wars, that have caused the meteoric rise in population of the city in the first place."

Thanks again, and please continue the good work you're doing.
Theodore T. Hodge at 11:14AM, 2017/02/09.
Efessayf
Price ceiling:
If the government should tell me to sell my cassava for no more than $1.00 a bag; I'll prefer to let the cassava to rot in the ground. The result is that there will be a shortage. Price ceiling leads to shortage.
If you set the rent for my property, I'll take the property off the market!
Therefore you better either negotiate with me or come crawling on your kneels.
Efessayf at 05:12AM, 2017/02/13.
Theodore T. Hodge
Efessayf, what you've stated above is easier said than done. If you have been reading the issues dividing the "Left and the Right" in American politics, you will have realized that one of the major battles between the two sides is the one over price and quality control, aka Regulation versus Deregulation". The Left favors regulation and the Right favors deregulation.

What would your life be like if you woke up tomorrow morning and the price of gasoline was $10 per gallon, the average bus ticket in the inner city cost over $5 and the prices of airline tickets cost over ten times as much as they cost last week, and no one even bothered to check for quality? To top it off, what if the cost of your apartment rental jumped three to four times, while your wages stayed the same? The answer: Chaos.

You know why that doesn't happen? Because of Regulation. If you are free to sell your cassavas at exorbitantly high prices, would you be able to buy other goods and services if the owners or manufacturers were free to raise prices as well without consideration for society? Would you be able to pay a thousand dollars for a doctor visit or thousands of dollars per semester in school fees in Liberia? How about $50 for cab fares in inner-city Monrovia?

The point is: The government does have a responsibility and duty to regulate certain things in society, including the price of a bag of cassava. Now, letting the cassava to rot instead of selling it for a reasonable fee is tantamount to selfishness, greediness and, in the end, suicide. Are you willing to go that far? Hope not.
Theodore T. Hodge at 12:06PM, 2017/02/14.

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