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OPINION | The benefits of repealing Article 12

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WHAT benefits will the local people get from repealing Article 12?

Before I attempt to lists down the benefits, let me first say that for the past 41 years since we have the Article 12 in our books, our people are still NOT better off. Just think about it. We are still dependent on the government for jobs. Fifty-five percent (55%) of our people are still in poverty. Many have died without reaping the full potential and benefits of their property because they cannot freely market it to the highest bidder. We cannot pursue the American dream because we don’t have the necessary capital, not even to invest in the dot.com craze in the 1990’s. U.S. Banks are reluctant to lend us money using our private property as collateral because they cannot hold title and freely mortgage it as financial products to third parties. Our people cannot reposition their assets because we don’t have a marketable title real estate industry. We lack full service financial and full-service mortgage company in the CNMI.

Glenn H. Manglona

Shorty even wrote to me that in addition, “Article 12 prevents many investors from coming to the CNMI. No legitimate investor wants to spend millions of dollars leasing and improving property, only to lose it in 55 years”.

Back in the 80’s and early 90’s, most of our foreign investors were Japanese who leased real estate properties. And it did not matter to them if they leased it because the Japanese Yen was stronger than the U.S. Dollar. The difference in the purchasing power of their currency was enough to offset the cost. And I doubted that we will ever experience that kind economic bubble within our lifetime or for the next 100 years.

But if we repeal Article 12, and give the same number of years forward (41 years) to see what benefits will our people acquire, history will tell a different story. Based on empirical evidence from the United States real estate market, the following are potential list of benefits that our people will realized:

We will create a marketable title real estate industry practically overnight. We will entice a full- service mortgage company to establish in the CNMI where our local people can use their property for financing and improve their lives just like any property owners in the United States. We will have a choice between not selling our property at all or selling one or two pieces of property at a premium price to the highest bidder and leave the rest of our real estate holdings for our children. If we choose the latter, we could send our children to the best school in the U.S. and not be dependent on the Saipan Higher Education Financial Assistances. We could reinvest the money and buy a house in the states or anywhere in the world. We could buy stocks and bonds from the various new apps/technology companies that are popping up. We could start a business and not be dependent on government for jobs thereby guaranteeing that our votes will never be bought by politicians in exchange for a government job. We can demand performance amongst our politicians because we can survive by our own hard work and efforts and achieve the American dream without them pulling our nose ring. Our government will be lean and not bloated because our people will not be too dependent on political hiring. We will have the financial means to relocate to other places where opportunities abound.

And the people who buys our property will have confidence that their investment are protected because they can own property in fee simple and therefore can invest and develop it. They will continue to invest and improve because they know that they can pass it down to their children too or they can mortgage it, sell, lease, rent or do whatever they want. It will be an unending cycle of economic activities where our government can ascertain tax benefits in every course and every corner of the transaction. And before you know it, these transactions will be an excellent source of revenue that can be allocated for our Retirees 25% pension, PSS, CUC and Public Health. Talk about having a revenue generating measure at its best. It will address the financial crises that our government is facing today.

Article 12 was intended to last for only 25 years. This was included in our Constitution to protect our people from being exploited by outsiders and to give us time to understand the value of money and investment. It is now over 41 years. And the world has changed literally before our eyes. Today, majority of our people understand the use and value of money and investment. And so we need NOT leave any stone unturned. It is time that we repeal Article 12 in order to reap the potential benefits for our people. And in due time, our future generation will look back and say, we did something worthy, something bold and brave. We did something that changed the life of our people for the greater good.

To our elected officials, please put politics aside and look objectively at the merit of this proposition. And if you feel that it deserves your humble attention, act on it on behalf of our people and provide the guidance to repeal Article 12. This is the last thing we got in the Pandora’s box. Let’s use it. A solution for our people. A solution for our government in fiscal crises. Indeed, that government of the people, by the people and for the people.

 

 

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