ResidenSea…stead: Ships Revisited

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There has been a long and active debate about the relative merits of different structures for seasteading, such as [spar platforms](http://seasteading.org/book_beta/Above%20Water.html#floatingsparplatform), [breakwaters](http://seasteading.org/book_beta/On%20The%20Water.html#breakwaters), SFS (ranging from SWATH to spars to Water Walkers), sailing ships, or retrofitted cruise ships. Seasteading is by its nature a diverse movement – of business models, governmental forms, and structure designs, as in [Wayne’s Venice Concept](http://www.seasteading.org/stay-in-touch/blog/3/2008/06/30/wayne-seastead-community)

Our initial research focused on the spar platform as the most promising structure. Now that development of our patented [ClubStead][] design is wrapping up, we are going to evaluate some of the other contenders. Breakwaters were extensively discussed in [this Weekly Research topic](http://seasteading.org/interact/forums/research/distributed-research-projects/drp-4-breakwaters#comment-4036), and we are considering how best to explore single-family seasteads. We are also going to investigate retrofitted cruise ships – starting with this blog post.

My previous opinion on ships is best summarized by the FAQ for [“Why not just buy a boat?”](http://seasteading.org/book_beta/Alternative%20Strategies.html#whynotjustbuyaboat), which concluded: _”Weighing these factors, we think a platform is a better approach if your goal is to create permanent ocean settlements. However, boatsteading is a pretty reasonable strategy as well. It may even be better in the short-term, but we think it is much less likely to transform the world.”_

It is part of our strategy to research and attempt to nourish both the residential and commercial sectors. Discussions with investors and entrepreneurs have indicated that seasteading-related businesses such as medical tourism need to be proven at a smaller scale than ClubStead (which costs ~$100M) in order for a spar platform business to have a chance to be funded. So ships seem a natural stepping stone along the path to larger commercial seasteads. And in the same way, ships seem a natural stepping stone along the path to larger residential seasteads. And in terms of business models, just as near-shore medical tourism is a small extension of medical tourism to distant countries, given that short-term travel on the ocean is a proven industry (cruise ships), it seems natural to extend it to long-term residency.

Additionally, some new information has come in since Wayne & I wrote our recommendations for spar platforms in the book alpha version 5+ years ago:

* Cost – Ships now appear relatively more cost-effective than we’d thought, for several reasons:
* Used ship prices have plunged with the global recession and shipping slowdown – the [Baltic Dry Index](http://en.wikipedia.org/wiki/Baltic_Dry_Index) reached a 22-year low in December of 2008.
* The industry is in a slowdown, and consolidating its fleets to larger vessels, so many smaller used cruise ships (~700 pax) are for sale right now.
* The cost of ClubStead seems to be a bit higher than we had expected ($400+/ft^2), based on preliminary estimates.
* Legal Status: Our legal research recently determined that while a ship is under the flag jurisdiction beyond 12nm, artificial platforms are regulated by the coastal state throughout the EEZ (200nm or more). Initial ventures will probably want to be near-shore, testing and proving seasteading at 12nm before we are ready to go to 200nm.

Cost and legal status are two of the most important criteria for a structure, so this argues in favor of ships as the first incremental step for the residential sector. I’ve been mulling over how retrofitted cruise ships could be made to work as a near-term business for the last month or so, and am ready to present an analysis for feedback.

#### Business Model

The obvious business model is a cruise ship condo, like [ResidenSea][] but priced for the middle-class. Size would depend on the level of interest, but I’m thinking something like a 700-pax ship, leaving small rooms for 200 (guests/staff/frugal) and converting 500 pax of rooms to condos for 100. The combination of permanent residents and timesharers/vacationers would travel the world on a retrofitted cruise ship, with an itinerary timed to catch major world events like the Cannes Film Festival, Carnival in Rio, Burning Man, and Olympics. The vacationers would be funded by dirtside jobs, while the residents would be a combination of retirees and telecommuters.

Initially, signups would be taken as a contingent contract, where people would sign: _”If a residential seastead can be built for < $200/ft^2, and 200 people (permanent residents and prorated timesharers) sign up, I will purchase at least AAA ft^2 for BB weeks/year”_ filling in their values for AAA and BB (52 for full-time).

#### Pros and Cons by Area

##### Structural (Ship-shape)

* (+) Proven over centuries. Minimum engineering novelty.
* (-) Doesn’t seem/feel new/different. This means it less PR, less feeling of pioneering, perhaps less attractiveness to customers.
* (-) Poor stability when stopped in deep ocean (turns beam and then rolls). Must spend time either traveling or in port.
* (-) Optimized for movement. Space and solar footprint are limited.

##### Location (Mobile)
* (+) Mobility is nice to grow a social movement – ship can give talks / host socials all over the world as it travels.
* (+) Shopping / resupply is easy due to frequent port visits.
* (+) Less likely to have political problems if only in/near each country for a little while. Can skip countries that are problematic.
* (+) Thanks to cruise industry, there are great dock facilities in many ports for cruise ships, often with good access to shopping and dining areas.
* (+/-) Mixed in attracting people. People like cruises to visit many places for vacation. But they also tend to like to stay in one place and build a network of friends for permanent living.
* (-) World travel limits onboard businesses / occupations – medical tourism is tough w/ no fixed location, for example. Phone/internet-based businesses may be all that works.
* (-) Being in domestic waters so frequently may pose significant legal challenges (varying laws for things like drugs & guns). Perhaps the ship can lock them up when in port? Might even have to leave a “pod” (ocean cache) outside territorial waters. Messy logistics there.

##### Legal (Ship flying a flag)
* (+) Ships have one of the best legal statuses. Outside 12nm, the flagging state has jurisdiction, and [flags of convenience][] for ships are standard. Whereas platforms are regulated by coastal state within 200nm EEZ. Also, we get to use the “legal shadow” of the cruise line industry (precedents set by their political power). Ship is less likely to have a path to sovereignty, but we should be building breakwater cities long before sovereignty is an issue.

(Note that this venture would be a separate legal entity from TSI)

##### Financial (Residents: condos / timeshares)

* (+) Ships are particularly cheap now due to recession and shipping volume decline (Baltic Dry Index).
* (+) As a proven, mass-produced technology, ships are relatively inexpensive. Purchase and retrofit may even be able to be financed by loans.
* (+) Condos / timeshares gives a clear funding model for both residents and guests.
* (-) Somewhat competing with the existing cruise industry, which has much more experience and economies of scale. Vacationers onboard are directly competing w/ cruise lines. And more may enter the market if we prove the model.
* (-) [ResidenSea][] was a failure financially.

##### Timescale
* (+) Can be done now with no new engineering. Once the venture has customers and funds, it should be able to buy and retrofit a ship in 1-2 years.

##### Modularity/Scaling
* (-) Not very modular – can’t expand incrementally. There is the possibility to expand by trading up to a larger vessel, or by adding ships, but this is not seastead-style expansion building a city one block at a time.

#### Unknowns

Some of the information that seems important to me in evaluating this strategy:

* Does this approach (business model and structure) appeal to our community? It will only work if there are customers, so this is important.
* How much does it cost? (price ships & retrofitting). What about relative to [ClubStead][]? What are the prospects for additional cost savings from improving the ClubStead design?
* How many people are needed for a [breakwater][] city to be cost-effective? The smaller the number, the less we should worry about non-seastead aspects of short-term strategies like ships. The larger the number, the more we want modularity in our pre-breakwater structures.

#### Conclusion

The cruise ship condo approach is a promising near-term strategy which bears further investigation. The tradeoffs are complicated, but at the core it comes down to a question of novelty and how big our first steps should be toward the long-term goal of seastead cities. The ship route is cheaper, easier, has a clearer place in the existing business and legal landscapes, and can be done sooner. But its lack of novelty means it is less interesting and exciting to potential seasteaders and the media, and more poorly suited to our long-term goals.

We must weigh the advantages of an easier start against the dangers of losing our unique vision. You are part of “We”, so your feedback here is welcomed.

[ResidenSea]: http://seasteading.org/book_beta/Current.html#residensea
[ClubStead]: http://seasteading.org/strategic-areas/engineering/clubstead
[breakwater]: http://seasteading.org/book_beta/On%20The%20Water.html#breakwaters
[breakwaters]: http://seasteading.org/book_beta/On%20The%20Water.html#breakwaters
[spar platforms]: http://seasteading.org/book_beta/Above%20Water.html#floatingsparplatform

11 comments

  1. crasch 1:18 am

    I think a condo cruise ship would be a good first step.  Although there are some residential cruise ships, they all target the high end of the market.  I would love to purchase a berth on a ship that provided a clean, comfortable living space, but without the high cost amenities of a ship like the Residensea.  High speed internet would be key though.

    You might also consider becoming a broker for residential suites on existing cruise ships.  That way, you don’t even have the start up costs of buying a ship at all, and you would be working with existing cruise lines, rather than against them.  However, I don’t know to what extent existing cruise lines would be interested in mixing residential suites with cruise suites.   

  2. vvagr 6:48 pm

    Probable I’m missing something, but what about the crew? Qualification and number of necessary crew members are sufficiently greater for a ship compared to the platform. Basically, a platform can be manned by inhabitatnts, a cruise ship travelling the globe – much less likely.

  3. Carl Pålsson 10:36 pm

    Cruiseships are allowed to enter other countries´ waters because they more or less conform to their laws, and because they carry people wo have a lot of maney to spend. A libertopian condo ship on the cheap might not be as welcome.

    Crasch makes another good point. Internet connectivity is key. I think it is in fact the most important issue for seasteading, all categories. Even structures is not that important; there are already plenty of at least reasonably efficient sesteads on the market, in the form of ships. Today, if you don´t have high-capacity and reliable internet pipe, you´re a caveman. Certain businesses might be able to get away with a reliable, but expensive and lower capacity connection. But for residential seasteads I believe inexpensive broadband is needed.

  4. Thorizan 11:43 pm

    Here, here!

  5. Wayne Gramlich 2:11 pm

    A used freigher is less expensive than a used cruise ship.  It provides a volume that can be outfited any way you want.  There are far more used freighers available than used cruise ships.  Lastly, freighers are designed to operate with minimal crews whereas a cruise ship is designed with the assumption of a large crew.

    I predict that a bunch of time will be wasted looking cruise ships and the conclusion will be that that they are still too expensive.

  6. dichro 6:31 pm

    I don’t think TSI’s time would be best spent costing cruise ship options. As I’m fond of saying, floating is a solved problem, and, in the form of cruise ships, so is living on the water. I’m not even sure that there’s all that much to be learned to designing a freighter conversion – it’s reasonably clear that it can be done (though it would probably be useful to find examples where it already has been, if any exist), and probably won’t require any exotic equipment. None of these things, IMHO, should be high priority research for TSI.

    The points of curiosity that would seem to better fit in TSI’s bailiwick are the pieces that mark the difference between a ragged assortment of converted commercial boats, cruise ships, and sailboats and a community. Things like – best ways to transfer between boats (ultralight aircraft for taxi transfer? Personal jetskis and winch services on every large boat?), strategies for resupplying the fleet without needing to go into port (maybe tenders that do ferry runs – or are directly chartered from port – and refuel/resupply at sea), maybe even a three-ring binder on fleet operations (what do you do in a storm? How do you deal with a disabled vessel?), minimum requirements that it imposes on member vessels (station keeping capabilities? Watch requirements?) and a cost model backing it all up.

    (And, incidentally: my favourite whimisical platform candidate of the past few years has been the car carrier – optimized for surface area rather than volume, with low decks available for utilities, transport, and storage; and high headroom decks for living area. My second choice is a mixed bulk cargo/container ship, for timeshare arrangements – buying in gives you a couple of containers, which you could sleep in if you wanted, but are best used for storing your goods while you’re away, and when you come in for a week or a month, you rent one of the larger living spaces that the open cargo holds were converted into).

  7. horton 1:34 am

    Ships here seem to be available for about $8,000 per pax.  I’m not sure if that’s with a person given a seat to sit on or some sort of bed accomodation.

    http://cruiseship.homestead.com/cruiseships.html

    Operating expenses would include:

    1. Expert labor including captain, mates, engineering crew, etc.  Maybe seasteading members could be trained?  Any estimates on requirements and costs?

    2. Fuel. Could be VERY expensive, but you wouldn’t need to run it all the time.  For instance this claims about $4,000 per hour when operating.  For a 500 pax ship, that’s $8 per hour per pax, family of 4, $32 per hour.  Idle is probably significantly less.

    http://wiki.answers.com/Q/How_much_fuel_does_a_cruise_ship_use

    3. Food – probably negligable.

    The key to making a cruise ship work would be:

    1.  Train as many crew as part of your org as possible.

    2. Be very sparse on actual cruising to save fuel.

    $8000 per person isn’t very high.  It’s the operating costs that could kill you, especially fuel costs.

     A group of coders plunking away at their laptops on the ship to make a living?  It would probably work.  You could almost be guaranteed some sort of revenue with a reality show that you’d definitely want to do as well.

     

  8. DanB 5:11 am

     

    I am a big supporter of this approach, so let me respond to some of the "cons" you listed:

    Structural:

    - lack of newness: this does not seem like a problem to me, going along with my overall suspicion of publicity. The people who you want to attract, will understand the newness. The people you want to keep away, won’t. Win/win.

    - poor stability: this might be attackable by cleverness. What if we park in calm waters? Can’t we rig up some sort of buoy system that enhances stability?

    - limited space/solar footprint: relying on solar energy in the short term seems like a fantasy. w/r/t space, note that frequent dockings will alleviate this problem substantially, giving people the ability to move around and stretch their legs.

    Location: 

    - legal challenges: the drug/guns problem seems like a nonissue to me. If I were the captain of the boat, I would certainly ban guns, and probably hard drugs as well. If you really need your fix, the cache idea seems relatively easy to implement.

    Financial: 

    - competition: the area in which we’re competing with the cruise ships is a side show. The main focus is long-term ocean based habitation. Your whole visionary goal is to prove this market, and get more entrants. So there is a plus side here as well: if you can prove that long term ocean based habitation has financial synergy with cruise ship vacationing, then the cruise ship industry will become part of the seasteading movement.

    Modularity/Scaling:

    - incremental scaling in the true sense of the word is hard, but scaling itself is just a matter of buying another ship.

    Anyway, I agree that this approach should be examined more closely. It is just much simpler.

    It looks like one central issue will be fuel costs. I had no idea the fuel costs for a ship were that expensive. It seems like saving on fuel will be the key.

     

  9. Jeff Chan 4:16 pm

    CondoStead is an excellent idea.  It’s doable now.  Like Chris, my only requirement would be Internet access.  Lots of information workers can do what they do any place that has Internet access.  Satellite Internet access is currently expensive, but perhaps that’s a cost of freedom.

    The permanent community would start with the people on board.  It would be fun to have a telepresence with folks on land or other condosteads also.

    Regarding guns, if you pull into port, you’re required to turn in your guns to the local government while you’re in port.  I’ve read that on many sailing/cruising forums, so it may be correct.  It’s a major part of the reason why merchant ships don’t have guns, and that in turn is probably a major part of the reason they’re easy targets for pirates.  Maybe use launches instead of pulling into port?  PITA though.

    Regarding crew size, if the number of paying passengers is 200, then the crew size would be that many or fewer, maybe 150 to 100.  Any cruise ship company could provide the crew and probably run the technical aspects of the ship under contract.

    CondoStead, like near-offshore medical tourism, is an excellent idea.  It’s a good steepping stone to seasteading.

    Regarding freighters, they feel like the fixer-upper house to me.  Cheap to buy, probably more expensive and less comfortable in the long run.  Theyr’e just not built to human habitation standards in the cargo areas.   On the other hand, some people do like living in converted warehouses, lofts, etc. so maybe they would feel at home in a cargo hold?  :(

    You’re probably much more likely to end up with something people would feel comforable in if you start with a cruise ship.  That said, it’s not clear to me that you can tear out bulkheads in a ship.  I assume they’re all structural.  I could be wrong about that, or it may be possible to add reinforcement elsewhere.  Residensea has large rooms, so it probably has reinforcement for the large open areas somewhere else in the design.

     

  10. wagiboy 7:57 pm





    To me the idea of long-term residency on a cruise ship is the most attractive incremental first step in the (hopefully) long and profound history of seasteading. From a business perspective I find it important to precisely define the customer target group. This precisely allows for creative ways of cost-saving. I would target the group of pioneering, libertarian minded and cost-sensitive professionals or small business owners who can provide services via the Internet. Is that perhaps even you?

    Pioneering: Excitement of exploring a new way of life. Pioneers are by definition ready to compromise on certain aspects of their citified lifestyle.

    Libertarian: Libertarians are deeply unsatisfied with the status-quo. They want to live in liberty and prosperity. Much like first pilgrims onboard the Mayflower were motivated to give up their status-quo in England, I believe that Libertarians are sufficiently motivated to give up some of their conveniences in search of their chosen goals.

    Cost-sensitive and Internet: My liberarian friends tend to be middle-class professionals of whom many work over the Internet. Me and my friends don’t have the necessary cash to live on board the "The World". Instead, we had to live on a value-oriented cruise ship that enables us to provide our services over the Internet.

    We already know the two main risk factors of early coastal seasteads are legal status and cost. As the legal status of a cruise ship under flag jurisdiction is low-risk it leaves cost as the major issue. Having targeted pioneering professionals, this enables the cruise ship business to implement a very cost-saving mode of operation: No frills cruise in closed loops often floating and anchoring in coves along the territorial waters of many different nation states.

    1. No frills: While the frills on board a cruise ship are fun, they get old after a couple of weeks. Professionals have to work most of the time anyways. But there is no shortage on low-cost recreational activities such as snorcheling, kayaking, sun-tanning and yoga on the beach. Yet the change of scenery, different cultures along the journey make the residency on board to be an adventure-on-a-budget. Moreover, long-term voyages allow for forcing of deeper relationships, especially with kindred spirits.

    2. Closed loops: Logistics becomes much more manageable and business partnerships can be more easily formed when travelling in closed loops. For example when traveling through the Caribbean on visiting the ports of Miami, Nassau and Panama City access to cheap supplies and equipment along with cheap flights can be facilitated.

    3. Floating: As fuel is a major contributor to operational costs, fuel can be saved by using wind and ocean currents. For example during the winter and spring season there is a stable North-East wind. A boat can leverage this wind by starting a voyage around Christmas in the Bahamans and then float or sail south along the Lesser Antilles. Also traveling with the tide saves fuel: http://sports.espn.go.com/outdoors/fishing/news/story?id=3441899

    4. Choice of ship: The size of the cruise ship depends on the number of initial sign-ups from the target group. For a very small group of 5-6 residents, I have found a suitable value-engineered yacht — The North Pacific 43. It costs only $369K, with financing available. The yacht is trawler which allows for more interior space and fuel savings. It is designed for living a board. http://www.northpacificyachts.com/43_intro.html

    5. Anchoring:  One lesson of the ResidenSea is that the condo owners wanted to say for several days in each port while tourist preferred to leave at the end of the day. This applies — of course — to residents on my value-oriented cruise. While a weekly anchor & float rhythm seems reasonable, one can consider of anchoring up to 3 months on one spot. Stays past the 3 months threshold necessitate dealing with immigration.  Long-term anchoring allows for tremendous fuel savings. But it also allows forging personal and business relationships the islanders. Volume and repeat business discounts could be negotiated.

    6. Taxes: Probably all European countries levy taxes to its residents only if they live for more than 6 months within their borders. Thus, the long-term seasteadler does not appear to be liable to income tax. Neither do seasteading residents fall in the category of a ship crew; they are residents not crew. Crew members originating from the U.S. are liable to a fixed 15% in income tax if he was an U.S. citizen. To my knowledge there has been no legal precedent of how to tax long-term residents on sea. I would not raise the issue with your tax authorities at all because of the nature of beaurocracy it will probably take them years to deal with the issue — if at all.

    Unfortunately, the US levies taxes even to its citizen regardless where they live. However, if you can show that you are for at least 330 days per annum the territorial waters of one or more other nation states then you could exclude up to $87,600 of your income. http://www.irs.gov/businesses/small/international/article/0,,id=96968,00.html http://usexpatriate.blogspot.com/2007/02/seamen-on-yacht-qualify-for-foreign.html

    7. Legal status improves: Residents could incorporate my business in a tax haven based on English Common law (such as Nevis or Panama). Further their legal residence is not fixed to any country; a plaintiff will have a very hard time litigating against residents. Especially those engaged in pornography, gambling or finance could gain a genuine competitive advantage.

     

    Some TSI members suggested the outsourcing model on board of cruise ships. While I am personally a free market supporter I have to admit there are circumstances when horizontal integration of business into a single organization is favorable. These situations are given when the transaction cost within a single organization are lower than that of the aggregate smaller businesses. And I think for at least small cruise ship operations a command-style approach is more effective. However, since nobody knows for sure how effective on-board outsourced operations are I find them worth experimenting.

    Yet other TSI members raised the idea of crew participation as another cost-saving technique. I think this is not a major contributor to cut costs. For one, on a pioneering boat participation is almost a given. And then can you imagine the stampede of multiple residents trying to fix his/her dinner in the same small galley at the same time?

    Bottom line: Without having been able to give exact numbers (yet), I have shown it is possible to provide residence on the seas that is profitable to both cruise operators and residents.

     

  11. George Elliot 10:20 am
    • "Used ship prices have plunged with the global recession and shipping slowdown – the Baltic Dry Index reached a 22-year low in December of 2008.
    • The industry is in a slowdown, and consolidating its fleets to larger vessels, so many smaller used cruise ships (~700 pax) are for sale right now."

     

    Those mentioned above are very good points. As the big cruise ship companies build bigger vessels, they will need to get rid of the smaller and older ones:

    http://workboatsinternational.com/cruise-ships-for-sale.html

    A quick inquiry will reveal that prices of the smaller and older luxury cruise ships are now within reach of the smaller players. This makes seasteading more feasible.

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