Land Preservation

Several state legislatures are considering enactment of tight zoning laws to preserve high productivity land for agricultural use. In the vernacular of the day, this land is referred to as "prime" (Raup, pp. 2, 3). Apparently, the myriad of tax preferential policies and other planning devices designed to protect agricultural lands from conversion to other uses have not been very effective (Hansen and Schwartz). Some of our best agricultural land continues to be converted to expanding urbanization, transport, utility easements, and for a variety of public purposes. So it is argued by those who advocate zoning for agricultural land that more drastic measures are now needed to stop this avalanche before "serious" agricultural land shortages occur. Of course, if social action is needed to retain prime land in agricultural use, the land market cannot efficiently allocate land resources among competing uses. The tax preference schemes were enacted to make it less costly to use land for agricultural purposes so that significant quantities of land would be kept in agricultural use that would otherwise shift. But use changes could still occur through the market if value differentials were great enough to offset the production cost advantage created by the tax preference. The crux of the proposed prime land preservation legislation is quite different; it removes the land allocation decisions from the market entirely by using productivity criteria to qualify land for preservation and by granting the power for exemptions and use changes to designated boards. This paper is largely concerned with the economic implications of this drastic policy shift. There must be substantial political pressure for retaining prime agricultural land since proposals are numerous and are being ma e in all sections of the country. It is the thesis of this paper, however, that the economic costs and benefits of such proposals have not been adequately explored and that it is the obligation of agricultural economists to do so. Not even the philosophical rationale for removal of the market from land use decisions has been adequately considered (Ervin et al.). This paper is more of an exploration of this issue than it is an empirical demonstration of ma ket efficiency. The next section discusses the perceived b nefits of prime land preservation; the third section discusses market failure and the alleged justification for social intervention; the fourth section treats the selection criteria that have been proposed to qualify prime land and how the program will be administered; and the final section highlights the major efficiency and equity implications of market removal from land allocation.

The preservation of land for working rural landscapes, wildlife habitat, urban parks, recreational trails, and protecting water supplies and floodplains is emerging as an integral component of smart growth programs. Both the general public and nonprofit organizations have been willing to spend billions of dollars on land preservation because of a perception that traditional land use planning and regulation are not successfully accommodating growth or protecting valuable natural resources. The literature on smart growth has largely overlooked the potential of land preservation to curb sprawl and to foster livable communities. The literature on land preservation has focused on the mechanics of conservation easements and land purchases rather than on how land preservation can fit in the comprehensive planning process to achieve community smart growth goals. More research needs to be done on the strategic use of land preservation in shaping and directing growth as part of a comprehensive planning effort.

This article examines relationships between willingness to pay for land preservation and policy process attributes. The approach departs from traditional welfare assessments in that it does not constrain attributes of the policy process to be utility-neutral. Results indicate policy process attributes may influence utility in some circumstances, even after controlling for the influence of land use outcomes often correlated with specific policy techniques. Results further imply that in some cases, even comprehensive specification of land use outcomes by stated preference instruments may be insufficient to prevent systematic shifts in willingness to pay related to unspecified, yet assumed, policy process attributes.

More than 110 state, county, and local governments have implemented agricultural land preservation programs to permanently preserve farmland. Assigning a value to the development is difficult and can be costly. Data was collected on 409 preservation transactions from 3 Maryland counties and supplemented with farm level spatial data via GIS. A hedonic price analysis is conducted to determine the marginal return to different farm characteristics using a spatial econometric model to correct for spatial correlation. Parcel characteristics such as distance to city and town, number of acres, prime soils and current land-use explain eighty percent of the variation in easement values. As expected, characteristics perform least well in explaining easement values in transfer of development right programs. This information can help formulate policy decisions and selection criteria to maximize the preservation of the agricultural economy and/or maximize public preferences. A supply curve is constructed using simulations that determine non-participant parcels' easement values. To preserve the remaining eligible acres in these three counties, $167 million would be needed. This method can support programs choosing to use a point system rather than the more costly and difficult to apply standard appraisal methods.

Abstract This paper reviews different approaches to using transferable development rights (TDRs) as a way to preserve rural lands in the face of development pressure. One TDR program is examined in detail, that of Calvert County, Maryland, which has had an active TDR market since the mid-1980s. This program uses TDRs as a key policy tool for achieving a total amount of preserved acreage in the county, and for providing incentives for preservation in some areas and development in others. The paper examines both the early difficulties in developing participation in the program, and the events that lead eventually to an active TDR market. It assesses the workings of the market including factors that influence the demand and supply of TDRs, the movement of prices over time, and the location of preserved areas and of additional developed areas. The study found that the program is achieving many of the county's land preservation goals because of the high level of activity in the TDR market. However, most of the additional density is being channeled into rural areas with underlying low-density zoning.

Landowner participation in the agricultural districting and development rights acquisition programs of the Maryland Agricultural Land Preservation Foundation (MALPF) is examined as the adoption and diffusion of an innovative agricultural land policy. Nine hypotheses of adoption behavior are tested using data obtained from interviews with 104 landowners at various stages of MALPF program participation. Predictive models of the decisions to enroll land in an agricultural district, propose a development rights sale to MALPF, and consummate a development rights sale are estimated using factor analysis and logit regression. The existence of and communication with neighbors, friends, relatives and near-by landowners who are MALPF program participants are associated with decisions to enroll land in a district as well as decisions to propose and sell development rights. The effects of MALPF program participation on property rights distribution, government involvement, and financial management are concordant with the attitudes and management styles of participating landowners. Geographic areas containing landowners most likely to gain relative advantages by participating in the programs contain high concentrations of participants. Communication and the flow of information within a social system and from external sources are important determinants of development rights sale. A generalized model of adoption behavior is presented and discussed in terms of its public policy implications.

In 1995, Wisconsin changed its agricultural land assessment policy from market valuation to use-valuation. The result is a significant reduction in property tax burdens for agricultural landowners. The goal of this legislation is to protect Wisconsin’s farm economy and curb urban sprawl by reducing the costs of retaining fringe land for agricultural purposes. However, agricultural property tax reductions must be compensated for by increases in property tax burdens of the rest of the community. The authors examine the effects of the new assessment policy on households in Muskego, Wisconsin. Specifically, the authors calculate property tax reductions for agricultural land-owners and property tax increases for nonagricultural landowners. The authors then compare actual household benefits (or costs) of this policy with household willingness to pay for land preservation. From this analysis, the authors determine which households receive a net benefit and whether the community as a whole enjoys a net benefit.

This study extends previous empirical research on land preservation by considering an actual land preservation scheme, the agricultural land reserve in British Columbia, Canada. The reserve was established in 1973 to ensure that development did not occur on the province’s most productive agricultural land. ‘To ensure that local food production is maintained,’ ‘the economic importance of British Columbia’s agricultural sector,’ and ‘to protect the environment’ are the most important factors that underlie support for the reserve. Aggregate, provincewide willingness to pay to maintain the land reserve is substantial, with our most conservative estimate being Can$91.18 million per year.

Like many areas in the Intermountain West, Utah experienced rapid population growth in the 1990s, resulting in the conversion of agricultural lands to various types of urban uses. The work described here is an examination of Utah agricultural operators' attitudes toward the most commonly used land preservation initiatives, including agricultural zoning, right-to-farm legislation, purchase of development rights programs (PDR), Greenbelt tax relief, and inheritance tax relief, in the context of substantial levels of agricultural land conversion. Interview and survey findings indicated that the most acceptable type of land preservation tool is tax relief programs, although farmers realized that these programs have not prevented the conversion of a great deal of farmland in the state. PDR is the least acceptable land preservation tool. However, most farmers did not have knowledge of PDR prior to interviews and the survey, and those that did have knowledge of PDR tended to view this program more favorably than those without any knowledge of PDR. This suggests that a well-constructed information campaign on PDR could be efficacious in increasing its acceptability. The implications of this research for developers are considered, and directions for future research are offered.

This economic study explores land market development and identifies contributing sources to incomplete markets--markets that do not operate efficiently or yield consistent price information. Using graphical and mathematical arguments, I discuss the positive externality from private lands that present public benefit, and the impact on efficiency and landowner rents. I present a comprehensive economic analysis of conservation easements (the policy tool most often used by the private land preservation movement) and I use this analysis to determine contributing sources to the incomplete market. I use a mixed methods research protocol that incorporates qualitative research in the first stage of the study to yield an economic model in the second stage of the project. In my economic model, I disaggregate the marginal private benefits curve to illustrate sources of market failure. I conclude that the private land preservation community is seeking to preserve a sense of place, rather than just specific attributes or features of the land, which yields implications for market efficiency. Although the market is evolving into a complete one, policy may expedite the process.