Proximity of Desire (POD) – Valuation of Public Real Property & the Commons

(2017-2022) “PROXIMITY of DESIRE” (“POD”) – Investing to Sustain the Commons & Nature’s Public Services

https://davehuer.com/wp-content/uploads/2025/01/alice-lake-reflections.png

POD is a financial innovation – a method to develop equivalent tax assessment and market valuations of public real property and the commons (PRPC); and the services delivered by the properties. Such property is not taxed and this has made it hard to determine the investment value of the services. The first use case is EAP, a method to determine the economic value of Nature’s watershed services. In British Columbia, local governments have begun to use EAP to allocate 1% of budgets to sustain Nature’s now-provably cost-superior services (see: “Part 1)”, next Section).

  • If rolled out province-wide, this will be 161 x 1% = >$113M annually (2023 dollars).
  • If used nationwide by all 4,600 local governments = >$1.74B annually (2018 dollars).

BACKGROUND NOTES – Note: POD not cited in current final EAP Synthesis Report

Part 1) ECOLOGICAL ACCOUNTING PROCESS (EAP)-  Foundation valuation and metrics framework, for The Partnership for Water Sustainability in BC:

Expressing economic desire to have proximity to the services of government [here, the services of Nature, delivered by “Natural Commons Assets” (NCA) that are protected, maintained, and sustained by all levels of government]. Developed with paid and in-kind contributions during the contract; and post-contract in-kind contributions:

Original framework:

The Georgia Basin Inter-Regional Education Initiative (IREI) secured first EAP funding (in March 2017) for the IREI program through 2018. The original project was: The Ecological Accounting Protocol (EAP) for valuing watersheds as infrastructure assets. The project goal was to determine the economic value of renewable services provided by natural assets (ecosystems of watersheds): “The EAP methodology focused on drainage and water balance services because this is of direct relevance to local government decision-making.”

First Valuation Framework:

IREI used the UK’s Principles of Natural Accounting [being developed by the Office of National Statistics (ONS) and Department for Environment, Food and Rural Affairs (DEFRA)]. The focus was to develop a method to “analyze the lifecycle costs, from pre-planning to replacement/renewal, of existing and proposed drainage infrastructure works” (Driving Change, AMBC Newsletter, June2017, p.11): https://www.assetmanagementbc.ca/wp-content/uploads/AMBC-Newsletter-Edition-20-June-2017.pdf 

POD+EAP Innovation:

POD came to fruition and it is more useful to analyze and resolve the valuation problem.

The assets that deliver Nature’s services are most often public real property and the commons (PRPC), controlled and managed by government. It is hard to assign market-equivalent valuations of PRPC; and yet, this had to occur to develop the ability to calculate costs and return-on-investment targets; and to develop defensible validations of the value-for-money that could be obtained by spending money to sustain access to the services. It is evermore hard to safely allocate funds for a public budget line item, when the assets are ephemeral; and PRP is not taxed; and the commons is incredibly hard to value, and there is no valuation history. POD was developed to cost and price PRPC. This was used to guide development of metrics to cost the cost-superior services delivered by watershed Natural Commons Assets (NCA) such as creeks, rivers, wetlands, and riparian (shoreline) zones.

  • The method arises from recognizing the need to apply:
    • (a) “first principles market forces” (human desire for ownership) – to re-think the modern nature of the nature of fences and boundaries in the common law (Magna Carta 1215, Statute of Merton 1235)
    • (b) “first principles market forces” (human desire for proximity to trading opportunities) – to the relationship of citizens and government (services for taxes paid).
    • (c) https://www.linkedin.com/posts/davehuer_henry3law-activity-6411816182130835456-Kcwn

Application – Natural Assets use case

    • (a) POD: Used to determine PRPC baseline values (tax-proxy value and impact to market-proxy value).
    • (b1) POD: Used to determine the value of the relationship of desire (“Proximity”) of private citizens to be near (to enjoy) the services delivered by government.
    • (b2) POD to Nature: Used to financially value human desire for proximity to the services (soil retention, aquifer recharge, enjoyment) delivered by natural PRPC.
    • (c) EAP: POD Valuations + price and cost data is then matched to type of NCA x tax assessments’ along time series.
    • The EAP group recommended 1% of a municipal government’s annual budget.
    • Project Name: Persuading Project Manager to morph name from the original “Ecological Accounting Protocol” to “Ecological Accounting Process.”
    • Contributions’ examples: (analyses at Duncan, BC & Courtenay/Comox, BC). This is the Koksilah (Duncan, BC) study: [Link1of8] [Link2of8] [Link3of8]  [Link4of8] [Link5of8] [Link6of8]
    • Mitigating Flood Risk in Koksilah Industrial Area by noticing presence of underground river underneath construction site, in data-flows in my imagination (see “A” buried-river-flood-source [link])
    • Kilmer Creek Cost-Benefit Analysis: EAP Applied to the Regional District of North Vancouver’s redevelopment assessment [Link]
    • EAP Primer: First Edition, Jan 2019. Research contributions noted [Link]
    • (Cumulative Synthesis Report): https://waterbucket.ca/gi/wp-content/uploads/sites/4/2022/06/EAP-Synthesis-Report-Beyond-the-Guidebook-2022_Jun-2022.pdf
    • (EAP Research Manager): Mount Arrowsmith Biosphere Region Research Institute (MABRRI), located at Vancouver Island University (VIU): https://mabrri.viu.ca/projects

The “Proximity of Desire” valuation sequence was subsequently developed to more fully explain the impact of being able to value human desire for proximity to any public asset and services (park, library, service centre, installation, etc.). POD creates the means to assign market-equivalent valuation histories for the market mix of public, private, and hybrid assets. This is the tying of value of services delivered by public assets (such as a park) to the market desire to obtain those services; using proximity of private assets to public assets to put a tax-equivalent price on public assets. This can range from the smallest village to States-Party and internationally-shared resources which are managed by all sovereigns but owned by none. 

    • ProxP uses POD and is for public, private, and public-private partnerships such as ESG valuation and investment activities. The method looks to be usable in most countries and sub-jurisdictions. [updated Link].
    • Respondents and Collaborators mentioned not realizing that these calculations can be two-directional (ie. reverse-calculated by starting at “y” or “x”) or help to create sustainable circular continuous improvement mechanisms. See this [Link] to read a 1-pager with diagram that ought to be helpful (this is the link at “B”, above).

Part 3) PRECEDENT THREADS

    1. 2001: Fighting Skyscraper Fires Post-9/11: The far back root threads of “re-thinking how we value public space” started when I was having a beer in an Abbotsford, BC tavern after work; watching the events of 9/11; getting an idea about how to better fight skyscraper fires. I still have the sketch. FEMA & NYC were not interested. The commercial driver & competitive edge is better property insurance rates.
    3. 2007-14: FinQM: Using Quality Values as a Profit-Driver: https://davehuer.com/wp-content/uploads/2018/10/hpg-finqm-investor-tool.pdf

Part 4) (2019-20) NEW FRAMEWORKS FOR ESG INVESTMENT

    1. Independent Accounting Innovation: An equation to calculate the financial $value of voter desires expressing la voix populaire – the popular will: [Link7of8] [Link8of8] 
    2. Watershed Aboiteaux: Proposing the use of reverse-engineered low-profile cascades of aboiteaux to capture upland surface water flows into local catchment areas, by slowing water flows (ex. edge of fields, etc.). Aboiteaux are part of an ancient sluice/dyke system used in colonial Acadia (now Nova Scotia) to recapture salt marsh fields for agriculture: [Link].

No related posts.