Quote:
Originally Posted by OCCheetos
My original point was that there's quite the incentive for more than just 88 people who are already living in Smiths Falls to take MOOSE, so your 1 in 5 figure is most likely inaccurate.
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I don't see the "incentive" that you're referring to, once again, this
ISN'T FREE. Since you've indicated that you don't understand the business plan here, let me try to summarize what the MOOSE overall plan is.
A. Borrow a $1 BILLION or so dollars from developers to upgrade/restore the rail network over 400km and purchase trains (note my earlier posts where they've only budgeted for 6 trains which isn't enough).
B. Have some major property developers build high density developments at at least 35 locations spread out over this network.
C. Achieve 25% higher value for those properties since they are located close to a railway station with regional connectivity.
D. Pay for the ongoing $200 MILLION a year that it costs to run this network (likely much more) by harvesting revenue from the property through increased rent and taking a portion of any sales.
So: Here's what it would mean for anyone who lives in these new developments.
For home buyers. The property developers would try and sell the property for a 25% higher price due to its proximity to a railway station. So, as an example, a $200K property would be sold for $250K. Then the developer and MOOSE would split that extra amount, let's say half-half, with the developer taking $25K and MOOSE taking $25K. But then in addition, you would be asked to sign a contract that when you sell the house you would also split the difference with MOOSE. So, in a number of years you go to sell the house. The house has increased in value by 50%. So, you sell it for $375K, but MOOSE will argue that without the railway it would only be valued at $300K. Therefore you would be required to pay MOOSE $37.5K.
So, for this particular example, to buy a property near the railway station you would have to spend $50K more up front, likely with a bigger mortgage and all the subsequent interest payments, and then you would have to pay out $37.5K when you sell the house.
Now, I've used a half-half split, but if MOOSE is running low on funds there is nothing in their plan that says they can't take a greater percentage, as long as it stays above the base value. So, instead of giving them $37.5K I see the potential for anything up to $75K on this property when sold since it's base value is $300K.
For renters. Developers would build rental units. A unit that elsewhere would cost $800 per month they would now try to rent out for $1000 since it is near the station. That extra $200 would be split between the developer/owner of the building and MOOSE.
Anyway, that's the theory. Problems with this are (not counting the fact that they can't gain access to the tracks):
1. No one's been willing to date to give MOOSE $1Billion dollars.
2. There's no way that 35 major property developments can occur in rural areas over a reasonably short period of time. Until they are developed the railway would be running a deficit. The time frame we are talking about here is potentially decades.
3. I don't see many people paying a 25% premium to live near a train station in a rural community whether that be in home purchase price or rent.
4. I can't imagine many people agreeing to give up what turns out to be likely 10% (or more) of the sale price of their home, just because they live near a station.
5. The 'incentive' that you refer to is the 'free travel'. It's only free if you're not paying the subscription fees, and the more people like that there are, the less likely that people who are in the subscription fee zone will chose to pay out the fee, or even chose to live there in the first place.
I'm sure there are plenty more.