In the heady real estate boom of the 21st Century, land sold around suburban and exurban areas for record per-acre prices. Builders could buy it because homes were selling at ever-increasing prices, and speculators flooded the market, looking to flip land and houses for a quick profit.
As the economic crisis has shown the danger of sub-prime lending and complicated unregulated banking bets, American investors have learned their lesson, and aren't speculating on land anymore.
"Betting that housing is bottoming, money managers have amassed billions of dollars to buy builders' excess land for pennies on the dollar," Investor's Business Daily reports. "They plan to re-sell acreage back when demand for new homes rises, and they anticipate getting at least a 20% internal rate of return, or annualized effective compounded return, building industry advisers say."
While investors see a deal, so do local communities. Fast-growing regions saw farms, fields and forests replaced by suburban homes at an alarming rate in recent years. Often, local zoning laws and citizen activism hadn't reached sophisticated enough levels to adequately protect local interests, as speculative buyers, investors and savvy builders descended. Now, they know better. And now, local land trusts are, in many cases, primed and ready to take advantage of the sudden decline in land value. Communities that want to preserve important open spaces may not see a better time to act for some time.
Now communities have the breathing room to step back and set rules that will guide new growth into existing cities, villages and hamlets. There, proximity to shopping, schools and work cuts down on commutes, lessens pollution, promotes everything from good health-by-walking to community volunteerism, and preserves outlying open spaces so farms can supply local food, and forests can sustain both wildlife and our recreational pursuits.
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