How the U.S. Real Estate Slump Helps, and Hinders Land Conservation

Earlier this summer Rand Wentworth, president of the Land Trust Alliance, noted that the open space protected by land trusts in the United States last year exceeded the acreage lost to development. This statistic may be a result of the growth and increasing effectiveness of land conservation organizations across the country, the slumping real estate market or a combination of the two. In either case, those committed to safeguarding our working farms, habitat for endangered species and places of beauty for parks gave a cheer upon hearing the news.

So what effect is the depressed real estate market having on land preservation? The answer is a mixed bag.

First, the good news: Land-conservation organizations are having banner years acquiring properties once considered beyond their budgets. From Hawaii to Florida, developers are selling off prime land at a loss, preferring to make back a portion of their investments now instead of waiting for the crisis to abate – whenever that may occur. One conservation leader has called this a “green lining.”

For example, a recent Associated Press article described how The Nature Conservancy’s Florida chapter has been swamped with offers. In 2006, the chapter purchased 45,000 acres for $260 million. Just recently, it completed transactions for twice that amount of land – for $380 million. Per-acre prices have been slashed as much as 60 percent, meaning even once-untouchable Atlantic Ocean beachfront is being preserved, providing communities with spectacular new parks.

In Ann Arbor, Michigan, requests to sell land have risen by 100 percent (much of the increase coming from nervous developers), compelling the city’s Greenbelt Program to streamline its land-preservation application process. There, and elsewhere, more people are donating land for protection, cashing in on the annual federal tax deduction of up to 50 percent of adjusted gross income. More are likely taking this step in states that offer additional tax breaks.

Numerous groups have begun large-scale conservation efforts, taking advantage of this unanticipated, once-in-a-lifetime opportunity to save some of America’s most spectacular natural and historic treasures. For instance, the Civil War Preservation Trust is now waging a campaign to double the 25,000 acres of battlefield sites it has previously preserved. Scenic Hudson, the organization I head, is leading an ambitious collaborative initiative to protect 65,000 acres of land throughout the Hudson River Valley National Heritage Area that meets New York State’s highest standards for ecological, scenic and agricultural resources.

Land preservation organizations also have seen a jump in the number of farmers willing to sell them development rights to their land. This means these scenic acres not only will forever remain open space, but that the farmers can continue their livelihood, contributing to the economies of their rural communities and, in many cases, providing nearby residents with healthy local produce.

And what’s the bad news? The drop in home sales and prices means the coffers of Community Preservation Funds – the prime means for preserving land in many municipalities – are filling up less quickly. CPFs receive their revenues from a small tax on home sales involving higher-priced real estate. With fewer houses selling, and for less, taxes earmarked for CPFs have dropped, meaning communities have reduced resources to purchase threatened properties just when they’re ripe for the taking. For example in East Hampton, on New York’s Long Island, CPF revenues so far this year are down 50 percent over 2007 figures. Also on the down side, plunging stock values and turmoil in financial markets has reduced tax revenues to states like New York, which receives 20 per cent of its revenues from Wall Street. Land trusts that draw their acquisition funds from endowments also face falling capital, just at the moment when they would like to be ramping up purchases.

Our hearts go out to the people throughout the country who are suffering from the economic downturn. However, we know that investment of funds for land conservation will help local farms survive, and that added parks will make communities better places to live and work while strengthening tourist dollars. One more bit of good news: preserving forested land is a hedge against global climate change. And while the real estate market may have its ups and downs, the open spaces we are working to protect will be enjoyed forever.