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2014-0203 Study Session PACKET
CITY OF ASHLAND CITY COUNCIL STUDY SESSION . AGENDA Monday, February 3, 2014 Council Chambers, 1175 East Main Street 5: 30 p.m. Study Session 1. Look Ahead review 2. Discussion of granting a conservation easement on Imperatrice Property (Request of Councilor Lemhouse) 3. Discussion of an ordinance prohibiting the unlawful carrying of loaded firearms in public places and an ordinance to prohibit endangering a child by allowing access to a firearm (Request of Councilor Voisin) In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Administrator's office at (541) 488-6002 (TTY phone number 1-800-735- 2900). Notification 72 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to the meeting (28 CFR 35.102-35.104 ADA Title I). COUNCIL MEETINGS ARE BROADCAST LIVE ON CHANNEL 9 VISIT THE CITY OF ASHLAND'S WEB SITE AT WWW.ASHLAND.OR.US City of Ashland Council Meeting Look Ahead *****THIS IS A DRAFT AND SUBJECT TO CHANGE***** De Responsible 2117 2118 313 314 318 3112 3117 3/18 3131 411 4114 4115 5/5 516 5/19 5120 n lStud'ISe40tinlEanceledlP,[esidentsYRa,' ens ~Re ular Cou'ncillMeetin vae 1 Transportation Commission annual update to Council Mike PW PRES 2 Approval of a contract extension with TriStar Tina Admin CONS 3 Annual Risk Management Report Lee Finance CONS a Verde Villa eDevelopment Agreement Amendment Bill CD NEW s Job Council contract proposal Adam Admin NEW e Addendum Clarifying Mount Ashland Association Agreement with Legal NEW the City of Ashland Dave L 7 N. Mountain lot line ad ustment Don Parks NEW s Second reading of film & television policy ordinance Ann Admin ORD-2 9 First reading of ordinance updating Council rules and Legal ORD-1 ORD-2 Commissions Dave L. 3~a ~St'udTSession iZSiski ou Room' 3/3 10 Discussion of possible ordinance related to seismic requirements CD SS in new construction Bill 3/3 EnecutiveTSession after stud ssession ?C3 11 Pursuant to ORS 192.660(2)(i) - Performance Eval. EXEC 3/4 -Re'ulaTCounciIIMFeti~ 3/4 Review of Medford Water Commission's recommendation on PW 12 SDC's and approval of a water supply contract and SDC Plan NEW Mike 13 Second reading of ordinance updating Council rules and Legal ORD-2 Commissions Dave L. 3/a ~GoallSettfri 9e-Ssi0n 3/a 14 Review, consolidation and update of current biennial goals Admin GOAL 132 ~JointlP.arkslO00ncil meetin'T 71OOr m 3,i2 15 Joint meeting to discuss and finalize the MOU between the Parks Admin Parks NEW Department and the City Dave/Don 3rn ~Sttud'ISession lZSiski ouRoom~- 3r7 ins ~Re uularCouncillMeetin~ 3/ae 16 Tree Commission annual update to Council Bill CD PRES 17 Quarter) Economic Development Update Adam Admin NEW 18 Plastic bag ban recommendations Adam Admin NEW 3/31 ~Sttud'I$eSSlon iZSi'ski. ouRoom~011 IMI 3/31 18 6-Month report on code compliance Bill CD SS 42~Re'-uular Councilime'etin~ - 4/t 20 Public hearing on the Normal Avenue Plan Bill CD PH n ~Sttud'1"$esslon iZSiski ou Roo'm 4na One ~Re'-uularCOUnciIlMeeti54"1757 21 Historic Commission annual report to Council Bill Co PRES 22 Unified Land Use Ordinance (ULUO) update (Bill) CD ORDPH ORD-2 -1 23 Public Hearin on CDBG Grant Award Bill CD PH Page 1 of 2 1/29/2014 City of Ashland Council Meeting Look Ahead *****THIS IS A DRAFT AND SUBJECT TO CHANGE***** Departments Responsible 21V 2118 313 314 318 3112 3117 3118 3131 4/1 4114 4115 5/5 516 5119 W20 5/5 ~St'ud'ISession iZSi'ski .ou Room' ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ srs R ~He ular CouncilimFe-ing~ 576 24 Public Hearing and resolutions regarding utility rate increases PW/ Finance PH Mike/Lee RES 25 Unified Land Use Ordinance ULUO update Bill CD ORD-2 sn9 ttud'ISe ssIOn inTEiski o R:Fo'm5 9 26 AFN business plan Mark Electric/IT SS s/zo ~Re ularP.OUncdlMeetln'~ O O S120 n FireWise Commission annual report to Council John Fire PRES Commisslon Presentation Dates - 2014 February 18-Transportation Commission March 18 - Tree Commission April 15 - Historic Commission May 20- Fire Wise Commission June 3 - Band Board Jul 15 - Forest Lands Commission August 19. Conservation Commission Se tember 16-Airport Commission October 21 - Public Arts Commission November 18. Housing and Human Services Commission December 16-Planning Commission Page 2 of 2 1129/2014 CITY OF ASHLAND Council Communication February 3, 2014, Study Session Discussion of an ordinance prohibiting the unlawful carrying of loaded firearms in public places and an ordinance to prohibit endangering a child by allowing access to a firearm FROM: Dave Kanner, city administrator, dave.kanner@ashland.or.us SUMMARY Councilor Voisin has requested a Council discussion of two citizen-proposed ordinances for the purpose of determining whether to forward them to a business meeting agenda for Council consideration and action. One ordinance would make it a class A misdemeanor to endanger a child by failing to prevent access to a loaded or unloaded firearm by a minor without the permission of the person, a parent or guardian, when the person knew or reasonably should have known that a minor could gain access to the firearm. The other ordinance would make it a class A misdemeanor_ to knowingly possess or carry a fireann, in or upon a public place, including while in a vehicle in a public place, or recklessly having failed to remove all the ammunition from the firearm, unless the possessor holds a concealed handgun license or meets one of several exceptions. BACKGROUND AND POLICY IMPLICATIONS: Following the mass murder at the Navy Yard in Washington, DC, last September, an Ashland group calling itself "Citizens for a Safe Ashland," wrote to the Council to request that the City consider adopting gun control measures similar to those adopted by Beaverton, Portland, Salem, Oregon City, Newport, Astoria and others that prohibit carrying loaded firearms in public, subject to several exceptions mandated by state law. A second ordinance, modeled on an ordinance adopted by the City of Portland in 2010, would make it a class A misdemeanor to endanger a child by failing to prevent access to a loaded or unloaded firearm by a minor. These ordinances were drafted by Citizens for a Safe Ashland, not by City staff. FISCAL IMPLICATIONS: None. STAFF RECOMMENDATION AND REQUESTED ACTION: This item is scheduled for discussion only. Staff seeks direction on whether to schedule these ordinances for a future business meeting. SUGGESTED MOTION N/A ATTACHMENTS: Draft ordinances. Page I of I ORDINANCE NO. AN ORDINANCE PROHIBITING THE UNLAWFUL CARRYING OF LOADED FIREARMS IN PUBLIC PLACES WHEREAS, Article 2, Section 1 of the Ashland City Charter provides: Powers of the City. The City shall have all powers which the constitutions, statutes, and common law of the United States and of this State expressly or impliedly grant or allow municipalities, as fully as though this Charter specifically enumerated each of those. powers, as well as all powers not inconsistent with the foregoing; and, in addition thereto, shall possess all powers hereinafter specifically granted. All the authority thereof shall have perpetual succession; WHEREAS, ORS 166.170 and other laws of the State of Oregon limit the authority of the City to regulate possession, storage, transportation or use of firearms or any element relating to firearms and components thereof, including ammunition; WHEREAS, ORS 166.173 expressly authorizes the City toadopt ordinances to regulate, restrict or prohibit the possession of loaded firearms in public places; AND WHEREAS, it is in the interest of public peace and safety and the prevention of gun violence to limit the presence of loaded firearms in public places within the City, NOW THEREFORE, THE PEOPLE OF THE CITY OF ASHLAND DO ORDAIN AS FOLLOWS: SECTION 1. ORDINANCE NO. UNLAWFUL CARRYING OF LOADED FIREARMS IN PUBLIC PLACES A. DEFINITIONS. For purposes of this section, the following definitions apply: 1. FIREARM means a weapon, by whatever name known, which is designed to expel a projectile by the action of powder. 2. PUBLIC PLACE means a place to which the general public has access and includes, but is not limited to, hallways, lobbies and other parts of apartment houses and hotels not constituting rooms or apartments designed for actual residence, and highways, streets, schools, places of amusement, parks, playgrounds and premises used in connection with public passenger transportation. B. It is unlawful for any person to knowingly possess or carry a firearm, in or upon a public place, including while in a vehicle in a public place, recklessly having failed to remove all the ammunition from the firearm. Ordinance No. Page I of 2 C. It is unlawful for any person to knowingly possess or carry a firearm and that firearm's clip or magazine, in or upon a public place, including while in a vehicle in a public place, recklessly having failed to remove all the ammunition from the clip or magazine. D. The prohibitions of subsections (B) and (C) of this section do not apply to or affect: 1. A law enforcement officer in the performance of official duty. 2. A member of the military in the performance of official duty. 3. A person licensed to carry a concealed handgun. 4. A person authorized to possess a loaded firearm while in or on a public building or court facility under ORS 166.370 (Possession of firearm or dangerous weapon in public building or court facility). 5. An employee of the United States Department of Agriculture, acting within the scope of employment, who possesses a loaded firearm in the course of the lawful taking of wildlife. 6. A government employee authorized or required by his or her employment or office to carry firearms. 7. A person conducting an athletic contest who fires blank ammunition in a plugged firearm toward the sky. 8. A person authorized by permit of the chief of police to discharge blank ammunition or a weapon for a lawful purpose (e.g. ceremony). 9. A person discharging a firearm or weapon on a licensed public or private shooting range, shooting gallery or other approved area designed or built for the purpose of target shooting, when such person is a member or guest of said range or area. E. It is unlawful for any person who knowingly possesses a firearm, clip or magazine in or upon a public place, or while in a vehicle in a public place, to refuse to permit a peace officer toinspect that firearm, clip or magazine after the peace officer has identified himself or herself as such, unless the person who knowingly possesses the firearm, clip or magazine immediately provides the peace officer with verifiable documentation that the person is not subject to this section under one of the exceptions described above in subsection (D). F. Violation of any portion of subsections (B) (C) or (E) is a Class A misdemeanor. Ordinance No. Page 2 of 2 ORDINANCE NO. AN ORDINANCE TO PROHIBIT ENDANGERING A CHILD BY ALLOWING ACCESS TO A FIREARM WHEREAS, Article 2, Section 1 of the Ashland City Charter provides: Powers of the City. The City shall have all powers which the constitutions, statutes, and common law of the United States and of this State expressly or impliedly grant or allow municipalities, as fully as though this Charter specifically enumerated each of those powers, as well as all powers not inconsistent with the foregoing; and, in addition thereto, shall possess all powers hereinafter specifically granted. All the authority thereof shall have perpetual succession; WHEREAS, ORS 166.170 and other laws of the State of Oregon limit the authority of the City to regulate possession, storage, transportation or use of firearms or any element relating to firearms and components thereof, including ammunition; WHEREAS,State law does not prohibit the City from enacting ordinances protecting the welfare and safety of minor children, e.g., ORS 419C.680; AND WHEREAS, it is in the interest of public peace and safety and the prevention of gun violence to limit minor children's unauthorized access to firearms, NOW THEREFORE, THE PEOPLE OF THE CITY OF ASHLAND DO ORDAIN AS FOLLOWS: SECTION 1. ORDINANCE NO. ENDANGERING A CHILD BY ALLOWING ACCESS TO A FIREARM A. DEFINITION. For purposes of this section, the following definition applies: 1. FIREARM means a weapon, by whatever name known, which is designed to expel a projectile by the action of powder. B. A person commits the offense of endangering a child if a person fails to prevent access to a loaded or unloaded firearm by a minor without the permission of the person, a parent or guardian, when the person knew or reasonably should have known that a minor could gain access to the firearm. C. Violation of subsection (B) is a Class A misdemeanor. D. DEFENSES.This section shall not apply if any one of the following circumstances exists: Ordinance No. _ Page 1 of 2 1. The minor obtains the firearm as a result of an illegal entry into any premises under the person's custody or control 2. The firearm is kept in a locked container or in a location that a reasonable person would believe to be secure from entry by the minor. 3. The firearm is locked with a device that has rendered the firearm inoperable and is designed to prevent minors and unauthorized users from firing the firearm. The device may be installed on the firearm, be incorporated into the design of the firearm, or prevent access to the firearm. Ordinance No. Page 2 of 2 CITY OF ASHLAND Council Communication February 3, 2014, Study Session Discussion of granting a conservation easement on the Imperatrice property FROM: Dave Kanner, city administrator, dave.kanner@ashland.or.us SUMMARY Councilor Lemhouse has requested a discussion of granting a conservation easement on the City's Imperatrice property, an idea that has been proposed by the Southern Oregon Land Conservancy. A conservation easement is a legal agreement between a landowner and a land trust or other government agency that permanently limits uses of the land in order to protect conservation and environmental values. A conservation easement does not prohibit use or development of the land, but limits use and development to only those things permitted under the easement. Land owners can also sell, lease or bequeath land that has a conservation easement. For a private property owner, a conservation easement can provide certain tax breaks. BACKGROUND AND POLICY IMPLICATIONS: The 846 acre "Imperatrice Ranch" property was acquired in 1996 as a receiving site for effluent from the City's waste water treatment plant. The City used food and beverage tax proceeds and paid $950,287.98 for the property. The plan to land-apply the treated effluent was ultimately rejected by the Council and the land has never been developed or utilized by the City. Since 1996, the property has been used for cattle grazing under a lease (since expired) to Ron Anderson, an Eagle Point rancher, and for a composting and small livestock-raising operation under a current lease with Standing Stone Brewing Company. The property consists primarily of grasslands. There is a wetland swale on the southern portion of the property. The property is traversed by a Talent Irrigation District irrigation canal and the portion of the property below that ditch has irrigation rights, making it valuable for agricultural purposes. The property is also traversed by a Pacific Power transmission line and an Avista gas line. Much of the vegetation on the central portion of the property consists of non-native invasive plant species (see attached map). The Southern Oregon Land Conservancy (SOLO) has, for several years, pursued the idea of having the City grant a conservation easement on the Imperatrice property. (Background information about the Southern Oregon Land Conservancy is attached.) A conservation easement is a legal agreement between a landowner and a land trust or government agency that permanently limits uses of the land in order to protect its conservation values. It allows the landowner to continue to own and use the land and to sell it or pass it on to heirs. When someone donates a conservation easement to an organization such as SOLC, they give up some of the rights associated with the land. For example, they might give up the right to build additional Page 1 of 3 Mme, CITY OF ASHLAND structures, while retaining the right to grow crops. Future owners will also be bound by the easement's terms. The grantee of the easement is responsible for making sure the easement's terms are followed. An easement may apply to just a portion of the property and does not require public access. A conservation easement can also qualify the property owner for a number of tax benefits, but as a public entity, such tax benefits would not apply to the City. The City has already granted conservation easements for Siskiyou Mountain Park and the Todd/Oredson Woods. There are a number of pros and cons associated with conservation easements. Opposing viewpoints are offered in the attached documents from the Trust for Public Land, which actively promotes land conservation, and the National Center for Public Policy Research, a conservative think tank based in Washington, DC. The pros and cons can be summarized as follows: PROS • The easement would effectively protect valuable natural, scenic, and open space values. • The easement may be specifically crafted to allow those uses which the City deems desirable, such as the land application of wastewater plant effluent, agricultural uses, energy production, parks uses and even rural residential development if the easement is tailored to allow less sensitive parts of the property to be developed. • The Southern Oregon Land Conservancy will be the grantee of the easement and will have legal authority to enforce all aspects of the easement. The Conservancy is a neutral third party and has no interest apart from the easement itself. • The easement could effectively protect the City's viewshed. CONS • It is very difficult to terminate the easement. It is effectively permanent. • The easement may reduce future value and salability of the property. Should the City wish to sell the property in the future, the easement, including all its restrictions and requirements remains in place. • Future uses of the property must be thought through, identified and listed as authorized uses on the easement. • The City would be legally liable for uses of the property that are inconsistent with the terms and conditions of the easement while we own the property. FISCAL IMPLICATIONS: N/A STAFF RECOMMENDATION AND REQUESTED ACTION: Staff has no objection to granting a conservation easement for the Imperatrice property, but before doing so, we strongly recommend carefully thinking through which uses and activities should be restricted and which should be permitted. Such a list of allowed or restricted uses could be developed by staff, by a Council subcommittee, an ad hoc advisory committee or one of the City's standing boards or commissions. The final determination would, of course, rest with the full Council. In addition, the Parks Department has expressed an interest in developing a trail system through the Imperatrice property to neighboring private and federal properties to create a path to the top of Grizzly Page 2 of 3 Ir, CITY OF ASHLAND Peak. The Parks Department was engaged in an effort to identify potential trail easements in 2005 (which are shown on the attached map) and it would seem prudent to engage Parks in this effort and create trail easements that the City would grant to itself, thus ensuring that such a system could be developed regardless of future uses on or owners of the Imperatrice property. SUGGESTED MOTION: N/A. This item is scheduled for discussion and Council direction to staff only. ATTACHMENTS: Aerial photo of Imperatrice property, including lot lines and property features Background information on Southern Oregon Land Conservancy Memo to Council from Southern Oregon Land Conservancy Memo from Southern Oregon Land Conservancy re: Imperatrice Property The Trust for Public Lands: "The Economic Benefits of Land Conservation" The National Center for Public Policy Research: "Conservation Easements: The Good, The Bad and the Ugly" Page 3 of 3 ~r, f I...rr~ Y, Z Potential Conservation values i 4- 77- e. J . 7 - e, . _ ' r ~ ' .,I~!A i •'ir.~,y .r4 '.Y.j!M 1~ Zw+' r!•,~,. ~ 'a ~r`r' \ .3y.~L, r ~ZPI':~,4. ~ ~.!¢3~ ? ~ /~~I,r4~~ ry, + ~ I- °i~ - 1"sA g r'R•t r'~ ±i w~i ti ~a+; :a" i r .llyf.~ t il~~:~- {.a~~ ! ,~Y , a ~ h 1 a•tA q •--„4~"~7'~,i~ ~4~~..i .s -•,y: "e: 7f,..: 4~;.,'. ..d 'S~'1 f `z~~ '+O~ J"R. • ~ ; - 1 t,~Fii~~.. - Ly` i ~i.,-~'• 4 r. r ..l p. -'r. 4 t a.,; •S ! ~ - ' ,'s•~+ ~^i► + '✓>m 4B4F p'y ~,s t ~.IC`.1 M .~~~r •.d'+ vs t~' - j:.~.3.. ~4 z 0 + r~ a „ „ . , Southern Ore On Butter CU - ~ o r. r t'om' rf'r ML"• .ty"'°~'°'+'.:l'" .r. Q • 4 - , r ~ i `,il ; ~1:, tl~,'.f ~ iw .~'y.n'~ as^uhv~'•i rf,~° •4 ^ • ~ - /Vj•' 'y•~ '°l~+'~ y ! ~ r, - ,a i ;.ti,.'`+.;~;,'~,.,,''•.-;.; ;iArea'of'exce ~tional native \ ,Ir • ~ ~:'4 •y'r .F' •rr'n fiti_. w'1 ^ .1, I , _ r`1` ~w^.r*. n , r y .-i implant presence and diversity i+• a• _•y, f -r.w „3 nr sa • r "N' + ti'"` a - w r.. ~ Y! ri . _ . per ~s, _ A .iN Y 1 ti i v •i ti ~a 1 r + l S; °4r W: - iq \r.,. O"I i ti y n. i Moderate native plant'species presence; r*R ' u high non-native invasive plant cover Legend . r ~ . PPL Power Lines 40Approximate Avista Gas Line Old patch~f,willows, Proposed Trail Easement k'x7_ Imperatrice Property Lrl Ashland City Limits Taxlots top Imperatrice Special Features Imperatrice Grassland A Imperatrice Grassland B r u O Access Points A Scale: 1:9,6oo s 0 8oo 1,6oo 2 ,4oo FT I I I I f ! I ! I I I i , History of the Southern Oregon Land Conservancy I Southern Oregon http://www.landconserve.org/content/history-southern-oregon-land-c... SOUTHERN OREGON, HOME ABOUT US HOW WE WORK GETINVOLVED GIVE NOW NEWS d PUBLICATIONS PHOTO GALLERY History of the Southern Oregon Land Conservancy The Southern Oregon Land Conservancy was founded in 1978 when a group of local conservation-minded folks met at the Ashland Public Library. They were concerned about the rapid growth of rural communities in the Rogue Valley and were interested in saving the best places for future generations. •':}'4 t t ti By November of 1978, the group was t moving along on their first project: helping i The Nature Conservancy buy a section of t Lower-fable-Rock(Uh, ((www nature.om ( 'Y~ p ~r•I /wherewework/norlhamerica/states/oreoon L ~ /oreserveslart6805 html), a local landmark. In the early years, the Land Conservancy acquired two properties: The +Yt Oredson-Todd Woods (oredsonBadd-woods) in Ashland and an acre next to the Rogue River. We also began working with t landowners to conserve their land using conservation easements. Volunteers also worked with other groups on fundraising efforts for public open space, like the Bear Creek Greenway (hito ((www bearcreekareemyay coma . ¢n"H",~y71 yR. In 1991, the Land Conservancy joined with the City of Ashland to raise funds for the y - °~I~ ~ ( r ~ r t t to purchase of the Siskiyou Mountain Preserve y+.ry{ m (siskiyou-mountain-oark), a 271-acre parcel bordering Ashland and the Oredson-Todd d Woods. The success of this project led to other public lands projects and the hiring a of the Land Conservancy's first executive director. Throughout the 1990s, the Land 444""" .1 y Conservancy continued its outreach y t s?~y'~3~~~ efforts, increasing the number of conservation easements held and protecting more land within a 5 county region. In 2000, the Board of Directors drafted a 5 year strategic plan, added more staff, and prepared to move forward as the need for land conservation continued to rise. Today, the Southern Oregon Land Conservancy holds conservation easements on 54 properties and owns 1 in fee simple title, encompassing 9,000 acres of land. Staff consists of a full-time executive director, a part-time office manager, a full-time land steward, a full-time development director, a full-time conservation project manager, and a part-time attorney. A 14-member Lands Advisory Board provides technical assistance on an as-needed basis. Together, the staff and Board, Trustees, conservation easement partners, members, volunteers, grantors and community partners have created a thriving conservation organization that plays a vital role in preserving the unique and beautiful lands of Southern Oregon. 1 of] 1/24/2014 11:31 AM Our Mission Southern Oregon Land Conservancy http://www.landconserve.org/content/oLir-mission Ram SOUTHERN OREGON D LAND HOME ABOUTUS HOW WE WORK GETINVOLVEO GIVE NOW NEWS B PUBLICATIONS PHOTO GALLERY Our Mission The Mission of the Southern Oregon Land Conservancy is to work cooperatively with landowners, partners, and communities to protect high priority lands in the Rogue Basin for current and future generations. Since 1978 the Southern Oregon Land Conservancy has been dedicated to the permanent protection of forests, working farms and ranches, rivers, streams and the beautiful natural setting of the Rogue River region. Our work is accomplished through the efforts of a vibrant Board L.1board or dlrecmrO, knowledgeable sgf. slat , a volunteer Lands Advisory Board (Iands-advlsorv-board) and Trustee Council (/Irusteea, and a diverse group of members and community partners dedicated to preserving this beautiful land for future generations. I oft 1/24/2014 11:58 AM What is a Conservation Easement? I Southern Oregon Land Conservancy http://www.landconserve.org/contenVwhat-conservation-easement IMAI SOUTHERN OREGON LAND HOME ABOUT US HOW WE WORK GETINVOLVED - GIVE NOW NEWS B PUBLICATIONS PHOTO GALLERY What is a Conservation Easement? A conservation easement is a legal agreement between a landowner and a land trust or government agency that permanently limits uses of the land in order to protect its conservation values. It allows the landowner to continue to own and use the land and to sell it or pass it on to heirs. When someone donates a conservation easement to us, she gives up some of the rights associated with the land. For example, she might give up the right to build additional structures, while retaining the right to grow crops. Future owners will also be bound by the easement's terms. We are responsible for making sure the easement's terms are followed. Conservation easements offer great flexibility. An easement on property containing rare wildlife habitat might prohibit any development, for example, while one on a farm might allow continued farming and the building of additional agricultural structures. An easement may apply to just a portion of the property and does not require public access. A landowner sometimes sells a conservation easement, but usually easements are donated. If the donation benefits the public by permanently protecting important conservation resources and meets other federal tax code requirements, it may qualify as a tax-deductible charitable donation. The amount of the donation is the difference between the land's value with the easement and its value without the easement. Placing an easement on your property may or may not result in property tax savings. Perhaps most important, a conservation easement can be essential for passing land on to the next generation. By removing the land's development potential, the easement may lower its market value, which in turn may reduce estate taxes. Whether the easement is donated during life or by will, it can make a critical difference in the heirs' ability to keep the land intact. I of l 1/24/2014 11:27 AM Why should I grant a conservation easement to the Southern Oregon L... http://www.landconserve.org/content/why-should-i-gant-conservatio... SOUTHERN OREGON LAND HOME ABOUT US HOW WE WORK GET INVOLVED GIVE NOW NEWS It PUBLICATIONS PHOTO GALLERY Why should I grant a conservation easement to the Southern Oregon Land Conservancy? People execute a conservation easement because they love their land and want to protect it from inappropriate uses, while keeping their private ownership of the property. Landowners voluntarily enter into a conservation agreement usually because they want to make sure that the conservation values of their land (wildlife habitat, scenic views, natural areas, working farms and ranches, etc.) don't change in the future. Additionally, granting an easement to an organization like the Southern Oregon Land Conservancy may yield income and other tax savings. Moreover, we bring over 30 years of expertise and experience working with landowners to ensure that your land will remain as a permanent natural area. I of 1 1/24/2014 11:27 AM Frequently Asked Questions I Southern Oregon Land Conservancy http://www.landconserve.org/faq SOUTHERN OREGON LAND HOME ABOUT US HOW WE WORK GETINVOLVED GIVE NOW NEWS B PUBLICATIONS PHOTO GALLERY Frequently Asked Questions We have compiled a list of questions that we are asked often, listed by category. Click on the category below and the list of questions will expand for you. If you have any other questions that are not answered below, please send us an email or give us a call at 541.482.3069. Land Conservation (/fagnand- onservation) Benefits of Conservation (/fmroenefitsr nervation) Conservation Easements (Rag/conservationeasements) What is a Conservation Easement? pcontenUwhatconsemationeasemenn Why should I grant a conservation easement to the Southern Oregon Land Conservancy? ecor ni Ashy-should-Fgra nervation wemem-souBwe mgon4andcDmelvancvl Are conservation easements popular? (/content/arecomerv io"mements-oopuWI They are very popular. In the 5 years between 2000 and 2005, the amount of land protected by local and state land trusts using easements doubled to 6.2 million acres. Landowners have found that conservation easements can be flexible tools, and yet provide a permanent guarantee that the land's important conservation features will remain intact. Conservation easements are used to protect all types of land, including coastlines; farm and ranchland; historical or cultural landscapes; scenic views; streams and rivers; trails; wetlands; wildlife areas; and working forests. How long does a conservation easement last? (/comentbow-long-does-conservatio"asement-last) Most easements "run with the land," binding the original owner and all subsequent owners to the easement's restrictions. Only gifts of perpetual easements can qualify for income and estate tax benefits. The easement is recorded at the county or town records office so that all future owners and lenders will learn about the restrictions when they obtain title reports. Why should I support conserving someone else's private land? /contentAM should Fsu ortaonservin someone-else%E2%80%99s-pdvate-land) The most productive land in the west is privately owned. The western U.S. is growing twice as fast as the rest of the nation and the fastest developing parts are rural, not urban areas. The conversion of land from agriculture to residential, commercial and industrial use is taking place at an even faster rate than population growth. If we don't invest in conserving private lands now, they will be lost forever. Why do we need to conserve more land in Oregon where 60% of the land is publicly owned and managed? (/conten4Whv4o-sve-needconserve-mare-landemgon-where-50-land-publiciv v"ed-and-manmedl Federally managed lands are primarily in the higher elevations. The private lands are in the valley bottoms, along rivers and streams, where water is plentiful. These are the lands we most often see and use. Natural areas in these areas are quickly disappearing and they may soon be lost forever. Don't Oreg Ones land use planning laws and zoning restrictions protect land?(1oomenUdon%E2%80%99t- omgon%E2%80%99s-land-use-planning-laws-and-zoning-restrictions-protect-land) In 1973, Governor Tom McCall made a famous speech to the Oregon Legislature that set off a decade of new environmental protections, including a statewide land use policy and standards for planning and zoning for all cities and counties. What steps do I take to place a conservation easement on my land? OcontentAvhat-steps-do-i-take-viMe- oonservationeasemenu First, contact us to become acquainted with our organization and the services we provide. Explore with 1 of 2 1/24/2014 11:29 AM Frequently Asked Questions Southern Oregon Land Conservancy http://www.landconserve.org/faq us the conservation values present on your land. Let us know what you hope to accomplish and what rights you may want to retain. For example, you may already have one home on your property and want to reserve the right to build another home. Our staff will work with you to determine what the best tool for conserving your land is and how the Land Conservancy can assist you. How can a conservation easement be tailored to my needs and desires? (/coment/howca onservation- easement-be4ailomd4ny-needs-and-desims) A conservation easement restricts uses on the land to protect the significant conservation values of that particular property. Landowners, working together with the Southern Oregon Land Conservancy, can create conservation easements that reflect both the landowner's desires and the need to protect conservation values. Uses that could degrade the unique conservation values present on the land will be restricted, while other uses will be permitted. A conservation easement is written in a collaborative process between the landowner and the Land Conservancy. What happens when the property sells? (/contentA"-happens-Menpmperty-sells) The terms of the agreement are binding on ALL future landowners. The agreement runs with the land in perpetuity. What is the Southern Oregon Land Conservancy's role after a conservation easement is written? (/Content /what-are-soulhem reaonlandconsemwcv°hE2%80%99s-responsibilities-mgarding- nsemmio"asement) The Southern Oregon Land Conservancy is responsible for enforcing the terms that each easement document spells out. To do this, our conservation staff monitor the property on a regular basis - typically once a year - to ensure that no violations have occurred. We maintain written records of these monitoring visits, which also provide the landowner a chance to keep in touch with the Land Conservancy. In addition, we review management plans and assist the landowner in making management decisions when needed. What Can I Do? (nagmhat-car Eqc) 2 of2 1/24/2014 11:29 AM SOUTHERN OREGON LAND 4:~L CONSERVANCY Board of Directors Pat Acklin President Donna Rhee Vice-President To: Ashland City Council Bill Mannish Chairman/Treasurer From: Diane Garcia, Executive Director, Southern Oregon Land Conservancy Donald Rubenstein Sub: Study Session on the Imperatrice Property Secretary Tom Atzet Charles Bennett As the Executive Director of the Southern Oregon Land Conservancy, I am writing Dan Kellogg regarding the upcoming discussions on future uses of the Imperatrice Property. The Julie Lockhart Dan O'Connor Southern Oregon Land Conservancy, the regional land trust serving Jackson and Dave Picanso Josephine Counties, has a long history of conservation leadership in our valley. Part Trustee of that history includes our partnership with the City of Ashland which began in the council early 1990s and continues to this day. AI Buck Karen DeBoer Dr. Paul Imperia Among the nearly 10,000 acres we protect, we hold conservation easements on two Kara Olmo parks in Ashland: the Oredson-Todd Woods and the Siskiyou Mountain Park. We Judson Parsons Sarah Sameh have had a very positive relationship with the City and Parks Department staff over Karen Smith the past two decades. Nancy Tait Jeanne Taylor Sam Whitford We also hold seven conservation easements in partnership with the City of Jacksonville and one in Central Point that is managed as a park by the City of Central Advisory Board Point. These partnerships ensure that land set aside for public recreation will be Max Bennett reserved for that use forever. Greg Clevenger Eric Dittmer Chuck Fustish We believe the Imperatrice property contains high conservation values (see Craig Harper accompanying descriptions, maps and photos). It serves as an important view shed Kate Jackson Marty Main for the Ashland and Rogue Valley communities and also contains considerable Su Maiyo agricultural and open space values. It could also provide excellent public access Jim Pendelton opportunities. Additionally, some ecologically important qualities found in the oak Dennis Vroman Lee Webb woodland and grasslands make those habitats worthy of protection. Randy White Our region is increasingly becoming recognized for its high geologic and biological diversity. In fact, the nearby Cascade-Siskiyou National Monument received its PO Box 954 Ashland OR 97520 541.482.3069 landconserve.org designation primarily because it contains an incredible diversity of habitat types over a relatively small area. The landscape surrounding Ashland is no different. It is easy to see that the open grasslands and oak savanna of the Grizzly Peak foothills are quite different than the densely forested slopes west of I-5. Expanding the City's network of parks to include a more representative sampling of the natural diversity surrounding Ashland will showcase this variety and provide a network of natural places where people can see and experience this diversity first hand. It would promote Ashland as a community that recognizes and invests in its unique natural heritage through its park system. Conservation of the Imperatrice property is also the most equitable use of the land, as it allows for many uses including agriculture, trails, public recreation, etc., in a non-exclusive manner, which benefits many different constituents while also protecting the open space values for the general benefit of the entire community. Conservation easements are flexible enough to allow for a variety of uses, yet firm enough so that incompatible uses will not degrade the property in the future. They provide communities with security against the winds of political change, yet offer enough flexibility to meet the City's future needs. A conservation easement on the Imperatrice property would provide a framework from which the City could assess future uses while ensuring that the City's vision is permanently retained. As a private, non-political conservation organization, the Southern Oregon Land Conservancy is a neutral third party that can offer expertise and assistance in a variety of areas relevant to the future use of the Imperatrice property. Working with the Land Conservancy can also open up funding opportunities from private and public grantors for habitat restoration, trail development and maintenance and other compatible uses on the property. We also have a large pool of volunteers to assist in these projects. We hope that the Ashland City Council will determine that the Imperatrice property is an important community resource worthy of protection, and that the Southern Oregon Land Conservancy can work with the City to develop a carefully crafted conservation easement that guarantees the property's permanent protection to benefit the Ashland and greater Rogue Valley communities. PO Box 954 Ashland OR 97520 541.482.3069 Iandconserve.org Imperatrice Property: Natural and Open Space Characteristics Southern Oregon Land Conservancy, January 28, 2014 Viewshed - This 824-acre property, zoned EFU and located just outside the Ashland UGB, comprises a substantial portion of the viewshed for the City of Ashland. It provides an uninterrupted view of a natural landscape from town, forming the foreground of the Cascade foothills viewshed. Public Access/Trails -This hillside property has the potential to become the only public access open space on the slopes east of the interstate between Emigrant Reservoir and Roxy Ann Peak. The hilltop presents incredible 360 degree views of the valley, the city of Ashland and the surrounding hills and mountains. It is an area with full sunlight late into the day, an aspect that is in short supply in the City's current parks network. Creating public recreation opportunities on this property, such as a loop trail from town, would create one of the best and most accessible public spaces to view the valley and the sunset. Agriculture -The extreme limitations of the Carney Clay soils underlying much of the property constrain crop production on the upper slopes of this property. The dry rangeland for cattle is an appropriate and historic use for the upper slopes. Pastures on the lower slopes are irrigated for grazing. Regional Conservation and Natural Area Significance - Much of the Imperatrice Property consists of open grassland with oak woodlands growing at the top of the property. Although the eastern slopes of the Bear Creek valley are an area where these habitat types are well represented, these habitats are primarily private lands, and are diminishing as valley slopes are developed. Many unique plants and animals reside in open grasslands and oak woodland habitat. Less than 10 percent of oak woodlands remain in the Rogue Valley and this globally threatened habitat supports more animal species than other habitats. In the more developed Willamette Valley where oak woodlands and grasslands were once more common, common species like the western meadowlark are now threatened. Our region is the last bastion of meadowlarks and other animals that are locally extirpated and declining in the Willamette Valley and Puget Trough in Washington. The heavy clay soils, along with intense solar exposure, low rainfall and past disturbances like fire have resulted in this property being nearly devoid of trees with the exception of the oaks on the north facing slope. This is likely the historic condition of the Imperatrice property. General Land Office surveys from the 1870s depicted the area as open grassland. In the Rogue Valley, remaining low elevation grasslands are heavily invaded by non-native annual grasses and yellow starthistle. However, the grassland on the Imperatrice property above the irrigation canal contains many native grass species and a high i percentage of native flower cover. The oak woodland retains a diversity of native understory plant species as well, including an excellent cover of native bunchgrasses. Flora: Over 70 species of plants were documented on recent site visits. There are likely many more present. A rare plant endemic to Jackson County, Southern Oregon Buttercup (Ranunculus austro-oreganus), grows in the oak woodland. It is a Candidate for listing in Oregon and is on the Oregon Biodiversity Information Center's List 1, which contains taxa that are endangered or threatened throughout their range or that are presumed extinct. Fauna: Heavy elk use has been reported on this property. The northeast corner is designated as Very Sensitive Winter range for deer and elk. This gradual toe slope descending from the high county makes it a prime corridor for animals moving through the landscape. Several bird species indicative of grassland and savanna habitats have been observed on the property, including Oregon's state bird, the Western Meadowlark. Two other interesting species seen on the property, the Black-billed Magpie and the declining Grasshopper Sparrow, are typically found east of the Cascades. This is the most southern-known population of Grasshopper Sparrow in the Rogue Valley with the only known populations around Highway 140. This grassland bird species is listed as Sensitive Vulnerable by the Oregon Department of Fish & Wildlife (ODFW). Golden eagles and other raptors hunt this property as well as common nighthawks, listed as Sensitive Vulnerable by ODFW. In the spring this property is also notable for the sound of buzzing: the abundant grassland flowers provide abundant nectar and pollen resouces for honeybees and native bees. Conservation Purposes - To conserve a large area of open space and a significant portion of the City of Ashland's viewshed. To ensure future public access and recreational opportunities. To maintain the property's agricultural use potential. To protect the existing native habitat values. I Ldited by Constance T.P. de Brun I ~I(II 1i j't K L:n J4 ~ ~ t/L_ ~ I. THE ECONOMIC BENEFITS Of LAND CONSERVATION 0 THE TRUST for PUBLIC LAND C O N S E R V I N G L A N D F O R P E O P L E About The Trust for Public Land The Trust for Public Land (TPL) conserves land for people to enjoy as parks, communi- ty gardens, historic sites, rural lands, and other natural places, ensuring livable communi- ties for generations to come. TPCs Conservation Initiatives • Parks for People: Working in cities and suburbs across America to ensure that everyone-in particular, every child-enjoys close-to-home access to a park, playground, or natural area • Working Lands: Protecting the farms, ranches, and forests that support land-based livelihoods and rural ways of life. • Natural Lams: Conserving wilderness, wildlife habitat, and places of natural beauty for our children's children to explore. vF Heritage Lands: Safeguarding places of historical and cultural importance that keep us in touch with the past and who we are as a people. qF Land d Water: Preserving land to ensure clean drinking water and to protect the natural beauty of our coasts and waterways. TPLS Conservation Services • Conservation Vision: TPL helps agencies and communities define conservation priorities, identify lands to be protected, and plan networks of conserved land that meet public need. • Conservation Finance: TPL helps agencies and communities identify and raise funds for conservation from federal, state, local, and philanthropic sources. • Conservation Transactions: TPL helps structure, negotiate, and complete land transactions that create parks, playgrounds, and protected natural areas. • Research d Education: TPL acquires and shares knowledge of conservation issues and techniques to improve the practice of conservation and promote its public benefits. Since 1972, TPL has worked with willing landowners, community groups, and national, state, and local agencies to complete more than 3,000 land conservation projects in 46 states, protecting more than 2 million acres. Since 1994, TPL has helped states and com- munities craft and pass over 33o ballot measures, generating almost $25 billion in new conservation-related funding. © zoo7 by The Trust for Public Land Visit TPL on the web at wwwtpl.org All rights reserved Cover photos: Jerry and Marcy Monkman The Trust for Public Land conserves landfor people to enjoy as parks, gardens, and other natural places, ensuring livable communities forgenerations to come. wwwtpl.org Contents Foreword ii Will Rogers, The Trust for Public Land Preface iii Constance T.F. de Brun, The Trust for Public Land Chapter t: The Impact of Parks and Open Spaces on Property Taxes I John L. Crompton, Texas AdM University Chapter z: Economic Benefits of Farmland Preservation 13 Lori Lynch, University of Maryland Chapter 3: Protecting the Source: Conserving Forests to Protect Water 24 Caryn Ernst, The Trust for Public Land Richard Gullick, American Water Kirk Nixon, San Antonio Water System Chapter 4: Environmental and Economic Benefits of Preserving Forests 28 within Urban Areas: Air and Water Quality DavidJ. Nowak, USDA Forest Service, Northern Research Station Jun Wing, South Florida Water Management District Ted Endreny, S UNY College of Environmental Science and Forestry Chapter s: Competitiveness: Parks and Open Space as Factors Shaping a 48 Location's Success in Attracting Companies, Labor Supplies, and Retirees John L. Crompton, TexasAdM University i Foreword Too often we hear that communities can't afford to create parks, preserve farms, con- serve open space, and protect watershed landscapes. But at The Trust for Public Land we know conservation is not an expense, but an investment that pays many dividends, including economic ones. Government officials and business leaders want to know how conserving land affects a community's finances. And volunteer conservationists are hungry for informa- tion that will help them make the case for conservation as a solid economic choice. How will land conservation affect government revenues and expenses? Is setting aside land for parks and open space good or bad for business and employment? TPL is proud to share research that answers those questions. The five research studies in this report come from acknowledged experts in their fields. Taken together, the papers con- firm that strategic land conservation promotes sound economic growth. This is one of several TPL publications making the case for the many benefits of parks. Please visit our wcbsitc at wwwtpl.org for the very latest reports, information, and publications. We hope you find this report helpful in your work Conservation is good for com- munities in so many ways. Here is specific evidence that, in particular, it is good for the bottom line. Will Rogers President, The Trust for Public Land ii Preface Does land conservation protect the bottom line? Leading experts in the field assert that it does. This book presents their quantitative and authoritative research on the economic benefits of land conservation. It brings together for the first time scientists, economists, and researchers from all sectors-academia, government, nonprofits, and industry-to summarize the best current studies, to present new original research, and to suggest areas for further inquiry into the economic benefits of land conservation. This book grew out of the success of The Trust for Public Land's (TPL) 1999 report, The Economic Benefits of Parks andopen Spaces, which offered case studies of how land conser- vation has helped communities grow smart, attract investment, revitalize cities, boost tourism, protect farms and ranches, prevent flood damage, and safeguard the environ- ment. Eight years later, the report is still the number one downloaded item from our website, as elected officials and citizens demand information on land conservation as a sound investment strategy. In Chapter t, John Crompton illustrates that parks and open space generate increased property tax revenue and yield a better return on investment than develop- ment In Chapter z, Lori Lynch reviews the economic benefits of farmland preservation, including maintaining viable local economics and protecting rural and environmental amenities. In Chapter 3, Caryn Ernst, Itlchard Gullick, and Kirk Nixon find that forest cover decreases the cost of treating drinking water. In Chapter David Nowak, Jun Wang, and Ted Endreny enumerate the economic value of urban trees, which improve air and water quality. In Chapter S, John Crompton examines the role of parks and open space in attracting businesses and affluent retirees. In sum, the contributors to this book demonstrate that a strategy of land conserva- tion is integral to economic health, from maintaining parks and open space to preserving farmland to protecting urban trees and forests around drinking water sources. TPL gratefully acknowledges the Surdna Foundation, without whose generous finan- cial support this book would not have been possible. I would also like to recognize and thank the following for their invaluable contributions to this project: Ernest Cook, Karen Foster, Kelley Hart, Brian Lehman, Jeremy Morgan, Amy Mullen. Janet Pawlukiewicz, Edith Pepper. Matthew Shaffer, Debra Summers. David Sweet, and Matt Zieper. Constance T.F. de Brun manager of Program Development, The Trust for Public Land March 2007 iii Chapter L The Impact of Parks and Open Spaces on Property Taxes John L. Crompton, Texas A&M University FORMULATION OF THE PROXIMATE PRINCIPLE The proximate principle states that the market values of properties located near a park or open space (POS) frequently are higher than those of comparable properties located else- where. The higher value of these properties means that their owners pay higher property taxes. The increment of those taxes that is attributable to the POS may be used to retire bonds issued to acquire, develop, or renovate it. In some cases, the increment is sufficient to fully meet these debt charges. The proximate principle is illustrated in figure 1.1. Figure I.i Layout of a 50-acre Natural Park Zone C Zone B Zone A 3,630 feet 0 0 5o-acre park a Scenario 1. If properties around the park were 1,ooo-square foot townhouses on lots sized 6o feet by go feet w4th the 6o-feet frontages on the park, then there would be too lots in Zone A (6o lots along each of the 3,630-feet perimeters and to lots along each of the boo-feet perimeters). Assume there are also 140 lots in Zones B and C. . 1. Assume total property taxes payable to city, county and school district are 1 percent of the market value of the property. 3. Assume the market value of similar properties elsewhere in the jurisdiction beyond the immediate influence of this park is $100,000. 4. Assume the desire to live close to a large natural park creates a willingness to pay a premium of 10 percent for properties in Zone A, to percent in Zone B. and 5 percent, in Zone C. A review of empirical studies (Crompton 1004) suggests these values are a reasonable point of depart t Figure 1.2. Proximate Impact on the Neighborhood Zone Market Value Incremental Value Total Property Incremental Property Aggregate Amount of Each Home Attributed to Park Taxes at 2% Taxes Attributed to Park of Property Tax Increments Given too Home Sites A $240,000 $40,000 $4.8oo $800 $112,000 (20% premium B $220,000 $20.000 $4400 $400 $56,ooo (im premium C $210,000 $10,000 $4.200 $200 $28,ooo (5% premium Outside park's $200,000 $o $4,000 $o $o influence Total $196,ooo Figure 1.1 shows a hypothetical 5o-acre park situated in a suburban community and sur- rounded by townhouses. It is a natural resource-oriented park with some appealing topogra- phy and vegetation. The cost of acquiring and developing it (fencing, trails, supplementary planting, some landscaping) is $20,0oo an acre, so the total capital cost is $1 million. The annual debt charges for a 20-year general obligation bond on Si million at 5 percent are approximately $9o,ooo. Figure 1.2 develops the annual income stream attributable to the presence of the park that would be available to service the bond debt. The annual incremental property tar pay- ments from the premiums attributable to the presence of the park amount to $196,ooo, which far exceeds the amount needed to pay the annual debt charges. In the formative years of urban park development in the United States, from the 185os through the 1930s, many elected officials authorized this investment of public resources believing that such an investment paid for itself. Officials observed that people frequently were willing to pay a larger amount for a home located close to a POS. This observation was bolstered by empirical evidence provided in the early annual reports published by the Central Park Commissioners in New York City about the change in land values that occurred when the park was constructed. The commissioners reported in 1873 that after paying the annual debt charge of $830,000 for the acquisition and development of Central Park, the city of New York received a net profit of $4.4 million from the increments in tax revenues attributa- ble to the park. These remarkable results were confirmed and reinforced by other anecdotal and empirical evidence in these early years of urban park development. Landscape architect Frederick Law Olmsted developed Central Park, and his firm subse- quently designed 3,000 parks over the next 9o years, so its influence was widespread. The firm's advocacy of the proximate principle was consistent and pervasive. Thus, in 1868, writ- ing to the future developers of Riverside, Chicago, Olmsted spoke of the "vast increase in value of eligible sites for dwellings near public parks" (Miller 2001). More than 5o years later in 1919, his son Frederick Law Olmsted, Jr. continued to espouse the mantra `It has been fully established that a local park of suitable size, location and character, and of which the proper public maintenance is reasonably assured, adds more to the value of the remaining land in the residential area which it serves than the value of the land withdrawn to create it (Olmsted 1919). 2 Figure 1.3. Early Examples of the Perceived Influence of the Proximate Principle on Property Values sF In Madison, Wisconsin, a citizens committee appointed to investigate and report on the amount of increase in the city's assessed value of property attributable to parks concluded: In our judgment, from ten to fifteen percent of the increase in the value of taxable property in the city of Madison during the period mentioned is attributable to the establishment of parks, drives, playgrounds, and open spaces in and around the city of Madison, by and through the activities of the city, its citizens and the Park and Pleasure Drive Association. When translated into dollar terms, the committee concluded that the increased tax revenues the city received from the presence of its parks "are meeting all the expenses of their maintenance, and all interest charges on the investment, and, in addition, are paying into the city treasury at least S1o,ooo to be expended by the city for other municipal purposes." sF The Hartford Park Commission, Connecticut, reported: A careful examination shows that the parks constructed during the last ten years have increased the ground list by a sum equal to that expended by the city in their purchase and development, and have gone far toward making up that which has been taken from the tax list. This increase will continue for years. sh The park superintendent of Keney Park in Hartford reported: "If the influence of Keney Park is considered to exist only one thousand feet from its borders, then the value of the lands abutting it is probably four times the value they were sixteen years ago." • The superintendent of parks in Kansas City stated: Any wide awake city can establish its park system without one cent of general indebtedness to the city. In other words, the enhancement in values of benefited lands will be more than suffi- cient to pay the cost of the acquisition and improvement of the park system. Tills will impress you as being a too optimistic view, yet in our own city it is a fact recognized and not disputed with reference to boulevards, and to a somewhat lesser degree with ref- erence to parks and parkways.... In Kansas Cit}; at least, the effect of park and boulevard improvements has been the enhancement of land values far in excess of the whole cost of the acquisitions and improvements of their park system.... Wherever this work has been properly executed and maintained, it should be considered an investment and not a tax. source: Nolen (1913). 3 In a 1913 article published in Landscape Architecture entitled "Some Examples of the Influence of Public Parks in Increasing City Land Values," a Harvard professor provided mul- tiple illustrations of cities and park commissions, using the proximate principle to justify their investments in urban parks, sonic of which are reported in exhibit 1.2 (Nolen 1913). Thus, from the 185os to the 1930s, there was an insistent, almost inviolate conviction in the legiti- macy of the proximate principle, not only among park and open space advocates, but also among planners and elected officials. However, the rudimentary studies that provided the empirical evidence verifying the y principle were naive, reflecting the underdeveloped nature of the statistical tools and research designs available in that era. The evidence was limited to simple calculations of increased tax i x receipts accruing from properties in proximity to parks. This ignored the array of other far tors that could have influenced property values in addition to parks. CONTEMPORARY EVIDENCE Between the 1930s mid the 1970s the proximate principle virtually disappeared from main- ~iri•,. stream discussions of parks and open space, in part because of skepticism stemming from an awareness of the naivete of the early studies that purported to verify the principle. Its resur- rection in the last two decades has coincided with the increased capability of computing, ;.f which has made feasible more complex analyses enabling the economic contributions of parks and open space to property values to be quantitatively identified and distinguished from those attributable to other possible contributions. Approximately 20 studies investigating the issue have appeared in the past two or three a Y decades. Most of the results have been published inpeer-reviewed journals, which suggests that the studies meet the standards of good social science research. They overwhelmingly ver- rx * k ified the legitimacy of the proximate principle. Figures 1.4,1.5,1.6, and 1.7 illustrate the results reported by these studies (for a detailed review of them, see Crompton [2004]). The studies demonstrated that the proximate effect is substantial up to 500-6oo feet away from the ' park (typically three blocks). In the case of community-sized parks over, say. 30 acres, the u effect may be measurable out to 1,500 feet, but 75 percent of the premium value generally a¢ y occurs within the 5oo-6oo-foot zone. The studies suggested that a positive impact o£20 percent on property values abutting or fronting a passive park area is a reasonable point of departure for estimating the magnitude of the impact of parks on property values. A series of studies (Ernst and Young 2003) conducted in New York City reported that similar positive impacts emerged when substantial capital investment was made in renovating existing parks that had deteriorated. t v €a d 4 gg f ,1 P #f.-i %H g a gr 3{ s 6 ~ { 4 ap Yw..' ~=ik i . I Figure t.4. Impact ofa Greenbelt on Boulder, Colorado A frequently cited study examined the effect of greenbelts on property values in three differ- ent areas of Boulder, Colorado. A total of 1,382 acres of greenbelt had been purchased adja- cent to residential developments. The study's results showed that, other things being equal, there was a $4.2o decrease in the price of residential property for every foot one moved away from the greenbelt. This suggested that if other variables were held constant, the average value of properties adjacent to the greenbelt was 32 percent higher than those located 3,200 walking feet away. One of the three neighborhoods had been able to take much greater advantage of the open space amenity in its planning than the other two neighborhoods, so the authors initiat- ed further analyses on it. In this neighborhood, price decreased s1o.2o for every foot one moved away from the greenbelt. This resulted in the aggregate property value for the neighborhood being approxi- mately $5.4 million greater than it would have been in the absence of greenbelt. This increment resulted in an annual addition of approximately $500,000 to the potential neighborhood property tax revenue. The purchase price of this greenbelt for the city was approximately $1.5 million, and thus, the potential property tar revenue alone would allow a recovery of initial costs in only three years. Source: Correll et al. (1978. z Figure 1.5. Impact of 14 Neighborhood Parks on Adjacent Neighborhoods in Dallas-Fort Worth The 14 parks were between 2.5 acres and 7.3 acres except for two that were 0.5 and 0.3 of an acre. They were `intermittently maintained' and were selected because of their ordinariness rather than their excellence. The parks were in neighborhoods of single-family houses. The analysis was based on 3.200 residential sales transactions. The price effects compared against home values a half mile from the parks are shown below Homes adjacent to parks received an approximate price premium of 22 per- cent relative to properties a half mile away. Approximately 75 percent of the value associated with parks occurred within boo feet of a park. 25% 20% E 7 E 15% u . 4. r Io% w ±e(i 0.v SA o% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 M l\ M C ti M N N N N Travel distance to park (in feet) Source: Miller (2001). a P d' Figure 1.6. Impact of Open Spaces on Residential Property Values in Portland, Oregon A study in Portland, Oregon, was based on a sample of 16,747 single-family home sales. Parks were classified into three different categories: urban parks, natural-area parks, and specialty parks facilities. The results showed that being within 1,500 feet of a natural-area park on average accounted for 16 percent of a home's sale price holding all other factors constant. The impacts of urban parks and specialty parks/facilities were z percent and 8.5 percent, respec- tively The relatively low premium for the urban parks may be attributable in part to urban parks often having greater variations in quality. When the results are averaged across all parks in the city like this, they do not differentiate between good parks, which people will pay a high premium to live close to, and mediocre parks, which don't attract high premiums. The impact of distance from each of the three types of area on home values is reported below. For example, a home located 401-6oo feet away from a natural area park on average had a $12.621 premium (19.1 percent), while the average premium for a house adjacent to an f urban park was $1,926 (2.9 percent). These data suggest that there are relative disadvantages ' to being located next to the facilities, since the largest premiums for the urban park, natural- area park, and specialty park/facilities were in the 201-400-, got-Goo-, and 40i -6oo- foot-distance bands, respectively. Variations in Proximate Values at Different Distances for Each Open Space Type (1990$)' Distance Variable Urban Park Natural Park Specialty Park/Facility 5200 ft. $x,926 $11,210 $7.396 201-400 ft. $2.o6i $10,216 $5,744 401-6oo ft. $1.193 $12,621 $10,283 6oi-8oo ft. $817 $11,269 $5,661 801-1,000 ft. $943 $8,981 $4.972 1,001-1,200 ft. $1,691 $8,126 $4,561 1,201-1,400 ft. $342 $9,980 $3,839 'Number of observations: 16,747; average home sale price: $66,198 Source: Lutzenhiser & Netusil (2001) x G'=f' 6 Figure 1.7. Impact of Greenbelt on Neighborhood Property Values in Austin, Texas The Barton Creek Greenbelt in Austin, Texas, is a linear 171-acre natural area that stretches for more than seven miles west of downtown. Three neighborhoods abut it: Barton, Lost Creek, and Travis. Single-family home sales of 224, zoo, and 236 dwellings, respectively, were used to measure the greenbelts impact on property values. As shown below, the premium for adjacency to the greenbelt was highest in the Barton neighborhood, representing 20 percent of the average price of all homes in that neighborhood. The comparison criterion is impor- tant because all the homes impacted by the greenbelt are included in the average price. If the comparison criterion had been with houses beyond the direct impact of the greenbelt (say, 1,500 feet or more away), then it is likely that the premiums shown would have been substan- tially longer. The lack of positive impact in the Lost Creek area was attributed to the different charac- ter of the greenway at that point. Homes directly adjacent to the greenway in Lost Creek were located on the edge of deep, thickly vegetated ravines that offered neither recreational access nor attractive views. The vegetation inhibited recreational access, and the views were of other properties across the ravines rather than of the green space. In the Travis area, where the proximate premium was relatively low the topography of the land did not allow for non- adjacent properties to enjoy a greenbelt vista, so the premium was primarily a reflection of the value accorded proximate access. The last column in the figure shows the decline in value with each foot of distattce away from the greenbelt. Neighborhood Home Sale Prices Adjancency Adjancency Decline in Value Premium Premium % per Foot from High Low Mean Greenbelt Barton $550,000 $105,000 $220,000 $44,000 20% 513.51 Lost Creek $899,000 $179,000 $356,ooo $0 0% 53.97 Travis $392,000 $130,000 $233,000 516,ooo 6% Sio.6i Source: Nicholls & Crompton (2oo5a) 7 Figure I.B. Alternate Scenarios Reflecting the Range of Impacts That Parks and Open Spaces May Exercise on Property Values a Increase in Property Value ~b in Normality Line 7 c d ~ Decrease in Property Value Distance from Park Both positive and negative impacts on property values are possible. The figure shows four alternate scenarios reflecting the range of impacts that parks and open spaces may exercise on proximate property values: a) A large, high-quality, natural resource-based, signature park that is well maintained to which residents are passionately attached. The measurable positive impact on property value may extend out to 1,000 feet. b) A smaller high-quality, natural-resource based, community-level park, with some charm and dignity that is well maintained and regarded with affection by the community. The measurable positive impact on property values may extend out 50o feet. c) A large, intensively used park with athletic facilities, floodlights, noise, congestion at the entrances, and extensive traffic. These factors lead to negative values on properties in close proximity to the park, but benefits accrue to those living away from the immediate nuisance but within easy access, typically two or three blocks away d) A dilapidated, dirty; blighted park with decrepit facilities and broken equipment in which undesirable groups congregate. The community rejects it and regards it with disgust. The negative impact does not extend as far as the positive impact of scenario (a) because people avoid it. In scenarios (a) and (b) property value benefit increments associated with proximity and accessibility decay as distance from the park increases. Scenarios (c) and (d) suggest that any negative values are likely to be limited to properties in close proximity to the park, and these will decay more rapidly than positive impacts as distance from the park increases-that is, the positive curve is likely to be flatter than the negative curve. The evidence shows that the type of park also influences the premium: passive parks generate the greatest premium, while properties adjacent to an active park may decline in value. Figure 1.8 presents four alternate scenarios in a generalizable model illustrating the range of impacts that parks and open spaces may exercise on proximate property values. In addition to the noise and congestion emanating from active-use parks, other condi- tions that negated any positive impact included (1) poorly maintained parks, (1) lack ofvisi- 8 r', biliry from nearby streets, which provide better opportunities for antisocial behavior, and (3) properties whose privacy was compromised from backing onto linear parks. Like all other goods, the premiums that people are prepared to pay to be proximate to a park or open space are influenced by the available supply: If such amenities are relatively abundant, then the premiums will likely be relatively small or nonexistent. Thus, in rural areas where there is plentiful open space, the incentive to pay a premium to be close to a park is likely to be lower than in densely populated urban areas where open space is rare. Similarly, if homes in an area have large private yards, then it is likely that premiums will be lower than in areas with little private space because privately owned yard space may act as a partial sub- stitute for public park space. Three additional points are worth noting: i. If state or federal grants are available to pay for part of a park's construction and development, then the probability increases that the revenue stream from the incremental increases in taxes will cover the local community's capital investment in the park z. Incremental property tax income attributable to a park continues to accrue to a community after the debt charges are repaid, at which time the net return to the community will be substantially greater. 3. The proximate principle captures only the "private" benefits that accrue to proximate homeowners. It does not capture the economic value of. a) "public" benefits that are received by the whole community such as reduced soil erosion, wildlife habitat enhancement, and improved water quality; or b) users of the park who live outside the proximate area whose home prices are, therefore, not influenced by the park. THE GOLF COURSE ANALOGY The approximately t.ooo residential golf communities that have been developed in the United States in the last decade offer ipso facto evidence of the proximate principle (Mulvihill et al. zoo[). Design and construction of an t8-hole golf course is likely to cost between $3 million and $8 million, but in addition a developer's investment includes lost rev- enue from lots that could have been sold on the go-too acres of land used for the golf course. If the average density of the development is three lots per acre, this means that the developer forgoes the revenue from 45o-6oo lots, which at, say, $40,000 each amounts to between Sig million and S24 million. Thus. the developer's total investment may be on the range of $zo million to $30 million. Typically, in golf course communities, approximately 30 percent of households contain a member who plays golf on the course (Nicholls and Crompton 2005b). There may be many reasons why the other 70 percent purchase homes in a golf course community, but a primary factor is likely to be the green space, ambience, and aesthetic appeal the extensive green area of the course offers. Since developers are profit oriented, it is clear that premiums generated from properties in the subdivision exceed the cost of their substantial investment in open space. In this respect, the private market place offers further validation of the legitimacy of the proximate principle. THE ROLE OF PARK AND OPEN SPACE LANDS IN REDUCING TAXES The empirical evidence overwhelmingly supports the proximate principle. However, in urban/suburban contexts where land is in relatively short supply, the question may not be whether to invest in parks and open space per se, but rather whether such an investment is likely to yield a better return than if the land were to be used for development. The conventional wisdom among many decision makers and taxpayers is that develop- ment is the "highest and best use" of vacant land for increasing municipal revenues. The 9 belief is that development increases the tax base and thereby lowers each individual's property tax payments. Hence, larger property tax revenues are likely to accrue to communities if land is built out with homes rather than used as parks or open space. In most situations, this conventional wisdom is erroneous. When open space is trans- formed into homes, the taxes of existing residents invariably increase because while develop- ment generates tax revenue, the cost of providing public services and infrastructure to that development is likely to exceed the tax revenue emanating from it. This conclusion emerges from a review (Crompton 2004) of cost of community services studies reported by more than 5o research teams in 21 states. Figure 1.9. The Median Cost to Provide Public Services to Different Land Uses per Dollar of Revenue Raised' $1.40 $1.20 SI.00 S.80 a x $.40 0 q $.20 $O Commercial & Farm/Forest/ Industrial Open Space Residential it = 98 communities. Source: Crompton (2oo4) Figure 1.9 provides a summary of these results, showing the median cost among almost too studies of per dollar of revenue raised to provide public services to each of three different land uses. Thus, for every Si million in tax revenues these communities received from com- mercial/industrial uses and from farm/forest/open space uses, the median amount they had to expend was only $270,000 and $350,000, respectively, to provide them with public services. In contrast, for every Si million received in revenues from residential developments, the median amount the communities had to expend to service them was $t,t6o,ooo. The results of these studies indicate that favoring residential development at the expense of open land does not alleviate the financial problems of communities. Indeed, it is likely to exacerbate them. 10 Figure T.10. Using Open Space to Reduce Taxes * The city of Naperville, Illinois was almost built out. The remaining undeveloped area was in the southwest of the city. The city's planners reported that if the area were developed as projected in the existing master plan, then it would attract an additional 7,711 people, of whom 1,820 would be school age. Within this undevel- oped zone, the city master plan showed that 125 acres would be parkland or open space. The city was concerned about the cost of servicing this new population, espe- cially the costs associated with providing schools for it. Accordingly, the city revised the master plan, expanding the open space acreage to 205 acres. The revised plan projected the school-age population would be 1,104, a reduction of 716 from the original plan. This meant that the residents of Naperville would save the costs of building, staffing, and operating one new school. This cost was much greater than the tax that would have accrued from the additional residences that would have been built in the original plan. The cost of acquiring and maintaining the additional park- land was projected to be much lower than the ongoing net deficit associated with building and operating the additional school. * Yarmouth, Maine, a community on the state's rugged Atlantic coast, chartered a citizens' committee to examine the pros and cons of developing a parcel of land out- side the town. The committee found that (1) if the property were developed, service costs would be 5140,00o a year greater than the tax revenue the project would gen- erate and (2) the city could purchase the entire property for S76,ooo a year over a 20-year period. As a result, residents overwhelmingly approved a referendum to issue s1.5 million in bonds for open space acquisition- * In Wayland, Massachusetts, it was found that development of 1,25o acres of open space would cost taxpayers 5328,35o a year more than they would receive in added tax revenues from new homes. This represented a 5775 increase in the tax rate. On the other hand, purchasing the property would only add $4.25 to the tax rate. Saurcep. Crompton (2004). Howe and Papst (1997). Todd (n.d). The evidence clearly indicates that preserving open space can be a less expensive alterna- tive to development. Hence, a number of communities have elected to purchase park and open space land, rather than allow it to be used for residential development, because this reduces the net tax deficit for their residents, which would occur if new homes were built on that land (figure 1.9). The conclusion is that a strategy of conserving parks and open space is not contrary to a community's economic health, but rather it is an integral part of it. I1 REFERENCES Correll, M., J. Lillydahl, 1-1. Jane, and L. D. Singell.1978. The effect of green belts on residential property values: Some findings on the political economy of open space. Land Economics 54 (2): 207-217 Crompton, J. L. 2004. The proximate principle: The impact of parks, open space and waterfeatures on residential property values and the property tar base. Ashburn, VA: National Recreation and Park Association. Ernest and Young. 2003. Analysis ofsecondary economic impacts of New York city parks. New York: New Yorkers for Parks. Lutzenhiser, M., and N. Noelwahc2ool. The effect of open spaces on a home's sale price. Contemporary Economic Policy 19 (3): 291-298. Miller, A. R. 2001. Valuing open space: Land economics and neighborhoodparks. Cambridge, MA: Massachusetts Institute of Technology Center for Real Estate. Mulvihill, D. A. et al. 2001. Go (course development in residential communities. Washington, DC: Urban Land Institute. Nicholls, S. and J. L. Crompton. 2005a. The impact of greenways on property values: Evidence from Austin, Texas. Journal of Leisure Research 37 (3): 321-341. 20056 Why do people choose to live in golf course communities? Jmtrnal of Park and Recreation Administration 23 (1): 37-52. Nolen, J. 1913. Some examples of the influence of public parks in increasing city land values. Landscape Architecture 3 (4): 166-175. Olmsted, F. L., Jr. 1919. Planned residential subdivisions. Proceedings oftheEleventh National Conference on City Planning. Cambridge, MA: Harvard University Press, 14-15. 12 Chapter 2 Economic Benefits of Farmland Preservation Lori Lynch, Unwersity of Maryland Many people support the preservation of farmland for food security, local economic viability, and amenity benefits. As early as x977. Gardner proposed four economic benefits that can be derived from the protection of productive agricultural land: (1) a viable local agricultural industry with employment opportunities, (2) protection of rural and environmental ameni- ties, (3) local and national food security, and orderly and fiscally sound development of urban and rural land. Rural and environmental amenities could include views of cows in the meadow or fields of flowing wheat, open fields where rainfall lands to recharge the ground- water, and areas where wildlife can find habitat. Researchers used surveys to determine which of these benefits were important to indi- viduals and local communities considering a farmland preservation program (figure 2.1). In general, the public favors a mix between agricultural objectives, such as local food production and a rural way of life, and environmental objectives, such as water quality and wildlife habi- tat. Also frequently mentioned are rural amenities that can incorporate both agricultural and environmental objectives as well as include attributes like scenic quality. Farmland preserva- tion programs themselves have sought to preserve a productive land base for the agricultural economy, preserve the amenity values of open space and rural character, slow suburban sprawl, provide wildlife habitat, and provide an opportunity for groundwater recharge in areas where suburban development is occurring (Bromley and Hodge 1990; Fischel 1985: Gardner 1977; McConnell 1989: Wolfram t981; Lynch and Musser 2001). Figure z.1. Characteristics People Consider Most Important When Preserving Farmland Papers Most Important Characteristic of Farmland Preservation Kline and Wichehis (1996) Environmental objectives Protecting groundwater Wildlife habitat Preserving natural places Aesthetic objectives N a Rural character Scenic quality Krieger (1999) Local food supply Family farms Control development Duke and Aull-Flydc (2oo2) Agricultural way of life Local food supply Water quality Bastian et al. (2002) Land with wildlife habitat Fishing opportunities Scenic views a Nickerson and Hellerstein (2oo3) Rural amenities Rural character Scenic beauty Wildlife habitat Food Security r e Environmental Objectives 13 ~3, Specifically, Kline and Wichelns (1996) found that Rhode Islanders favored environ- mental objectives, such as protecting groundwater, retaining wildlife habitat, and preserving natural places, and aesthetic objectives, such as preserving rural character and scenic quality. In another paper by Kline and Wichelns (1998), respondents specified that preserving fruit and vegetable farms and woodlands was most important, followed by cropland and land adja- cent to water, but the rankings varied according to the objectives of the individual. For exam- ple, environmentalists favored forests. rural amenity seekers favored crop and pasture farm- land, and agrarian people favored fruit and vegetable farmland. Krieger (1999) found that people outside Chicago supported farmland preservation to ensure local food supply, protect family farms, and control development. The most important aspect of preserving open space was its role in slowing growth and reducing sprawl. To the Illinois respondents, continued sprawl meant the loss of scenic beauty, increases in air and water pollution, and loss of wildlife habitat. Duke and Atdl-Hyde (aooz) found that Delawareans supported maintaining an agricul- tural way of life, having access to local produces, and protecting water quality. People favored growth controls that preserved rural character rather than just controlled growth. Bastian et al. (zooz) found that people would be willing to pay more for agricultural land that pre- served wildlife habitat, offered angling opportunities, and provided scenic views in addition to agricultural production. Many of the states mention these benefits when passing the laws to create the farmland preservation programs. Examining these laws, Nickerson and Hellerstein (2oo3) found that protection of rural amenities such as rural character, scenic beauty, and wildlife habitat is the most frequently mentioned objective, followed by food security and environmental services. The preservation programs ranked soil productivity/traditional agricultural uses and parcel size/contiguiry as the most important. Thus, the programs favor preserving cropland, which in principle could provide the rural amenities that the public wants to preserve. While the ranking of objectives may vary from place to place, most individuals indicate the economic benefits outlined by Gardner as important reasons to preserve farmland. So what is the evi- dence concerning these benefits? Do local communities actually obtain what they think is important when preserving farmland? A VIABLE LOCAL AGRICULTURAL INDUSTRY WITH EMPLOYMENT OPPORTUNITIES Preservation does not mean that economic development stops. In fact, farmland preservation programs can signal a commitment to an industry that then stimulates the industry to invest and work to be successful rather than waiting to "sell out" A survey of farmers in four Maryland counties examined the difference in behavior between those who had participated in farmland preservation and those who did not. We found that farmland preservation par- ticipants were more likely to have invested in their farm in the last five years-66 percent compared with 55 percent for nonparticipants (figure 2.2). In addition, the owners of the preserved farms were more likely to attend workshops to learn new technologies and enhance their farming skills (figure 2.3). Sixty percent of those farmers who had preserved their farms had attended workshops at least once compared with 38 percent of nonparticipants. Seventy-eight percent of participants said they preserved their farm to keep it in the family and 42 percent said they wanted the money for their farm operation. Participants used the money they were paid to preserve their land in ways that may benefit the local economy (figure 2.4). For example, thirty-five percent of farmers used the money to reduce debt, thus making their operation more solvent. Another 28 percent saved the money or invested it in the farm. Eighteen percent used it to finance their farming operation. Twelve percent used the money to finance their retirement instead of selling the land to do so. Some bought addi- tional land or farm equipment for their operation. 14 Figure 2.2. Investment Behavior of Farmland Preservation Participants and Nonparticipants 70% 65.6% 60% 54.8% 50% 45.2% 40% 344% 30% 20% 10% 0% Did not invest invested SParticipant ❑ Non-participant Figure 2.3. Workshop Attendance of Farmland Preservation Participants and Nonparticipants 70% 62.2% 60% 50% 42.7% 40% 39'7% - 30.5% 30%- - 20%- 17.55" 10%- V-7.3-- 0%- Never Once or twice More than 3 times a year ■Participant ❑Non-participant 15 Figure z'.4. How Farmland Preservation Participants used their Easement Payments Paid family expenses _ 7.6% Bought farm equipment _ 76% • Remodeled house _ 10.8% Bought more land 11.2% Financed retirement - 11.6% t Financed family operation - 18.4% * Saved or invested . 28.o% R? Reduced debt 35.2% a o% 10% 20% 30% 40% Participants were also most likely to have productive operations and planned to continue hx x„ farming, according to Lynch and Lovell (2oo3). Growing crops, owning a larger farm, earning a high percentage of fancily income from farming, and having a child who plans to continue m; farming increased the likelihood of enrolling a farm in the preservation program. In more t recent research on the mid-Atlantic states, we find that counties with farmland preservation s2* programs have lower rates of farmland loss than similar counties without such programs. Therefore, investment in these types of programs helps to slow the rate of loss and ensures an ongoing industry. This begs the question of how much land must be preserved to ensure a viable industry; that is, is there a critical mass threshold for the agricultural industry. While Lynch and Carpenter (2003) did not find strong evidence that a critical mass exists, they did find that 2 ,4 { counties with fewer than 5o,ooo acres of farmland had an annual rate of farmland loss of gel 2.36 percent compared with an average rate of 1.57 percent for all counties; comities with between 5o,ooo and 15o,ooo acres had a rate of farmland loss of 1.88 to 1.98 percent. They also found that 42 percent of the study's comities derived their largest share of income from a ` s } different commodity or animal source in 1997 than in 1949 (figure 2.5). They concluded that ,f 3 some agricultural sectors did not survive as agricultural land was lost but that counties could stem the tide of farmland loss if they adjusted their crop and/or livestock mix. j It is still possible that a critical mass for certain sectors may exist. For example, Adelaja, d Miller, and Taslim (1998) indicated that because New Jersey no longer has a critical mass of .Y ~Ga dairy farmers, it does not offer all the extension programs and services to dairy farmers that the neighboring states provide, which can impact input costs and management quality. ~ r '7 r fi+k. w ~ t 16 ti ~ rz ~ a Figure 2.5. Changes in Mid-Atlantic Counties' Highest Income Crop and/or Livestock between 19¢9 and 1997 INCOME CATAGORIES -Same suura oFinco~nc C6engc lugnt income source / sours Lynch and Carpenter (2oo3). In addition, preserving the agricultural industry provides open space attributes and rural amenities that can attract tourists and new residents to an area. Contrary to many communi- ties' concerns that the conservation and preservation policies may have negative effects, Lewis, Hunt, and Plantinga (2oo2) found that communities that managed land for conserva- tion purposes did not have lower employment growth rates. In fact, they found that when forestlands were managed for preservation uses rather than multiple uses (including extrac- tive uses such as timbering), more people moved into the counties with more conservation land than moved out possibly because of the additional amenities such lands provided, although this effect was relatively small. Furthermore, Lewis, Hunt, and Plantinga (2oo3) concluded that preservation policies do not cause the local community to shift from high-wage to low-wage jobs. Wage growth rates were not affected by the amount of land in conservation (nonextractive) uses compared to multiple (including timbering) uses. While these authors do not suggest that preservation or conservation policies are necessarily the best economic development stimulators, they clearly show that the impacts of these policies do not differ from those of resource extraction poli- cies. Similarly, Duffy-Deno (1997) found no effect from land preservation for wildlife habitat purposes on employment levels or growth rates. Examining 333 nonmetropolitan counties, he 17 found that employment growth after the listing of endangered species and limits on develop- ment occurred was similar between counties that had listed endangered species habitat and those that did not. Lynch and Carpenter (2oo3) found that the health of the local economy impacted the rate of farmland loss. Healthy local economies (higher employment rates and higher incomes) had lower rates of farmland loss, all else the same. PROTECTION OF RURAL AND ENVIRONMENTAL AMENITIES For many economists, rural and environmental amenities are the main reason why local com- munities might consider farmland preservation programs. Food supply/security and the agri- cultural economy have markets where goods and services are bought and sold. If people want to have locally grown food and a strong local agricultural economy, then they call patronize local farms and buy local goods to achieve those ends. However, rural amenities are not what we consider market goods-they are not bought and sold. Therefore, to ensure that they are preserved, some type of program or policy may be needed. To assess how much people are willing to pay for these amenities as a signal for how much land should be preserved, economists use two approaches. One is to ask people directly how much they would be willing to pay to preserve farmland, giving them various scenarios to consider. The other is to evaluate actual housing sales in the market to determine whether the presence of preserved farmland, forest, and cropland increases or decreases the value of a house. Using the survey method, research has found that the annual willingness to pay varies from $9 to $239 per household per year per thousand acres (Bergstrom, Dillman, and Stoll 1985: Beasley et al, 1998; Bowker and Didychuk 1994; Rosenberger and Walsh 1997: Johnston et al. 2001: McConnell and Walls 2oo5). Values are higher in areas that are losing agriculture more rapidly-Suffolk County in New York and Alaska as compared with a rural South Carolina county. Figure 2.6 outlines the average willingness to pay from some of these studies as well as the total values for all households in a particular area (2000$). Halstead (1984) found that Massachusetts residents would have paid $28 to $6o per year to prevent the conversion of farmland to low-density housing and $70 to $176 to prevent high-density housing. In South Carolina, Bergstrom, Dillman, and Stoll (t985) found lower numbers of house- holds saying they would pay $9 to $16 per year per thousand acres to increase the number of acres preserved (2000$). The authors suggest that the reason for this lower number is that the area studied is predominately rural, so even if some agricultural land is lost that other agricultural land and the associated amenities are still quite close. Beasley, Workman, and Williams (198() examined the value to households of preventing the conversion of farmland near Fairbanks. Alaska. Households indicated they would pay $76 per year to avoid moderate development and $144 per year to prevent the conversion of most of the land (1984$). The region's value per acre was $830 (2000 In Bowker and Didychuk's (1994) study, households in eastern Canada responded that they would pay $49 each to preserve 23,0oo acres and up to $86 each to preserve 95,000 acres (1991$). The value then computes to $97 average value per acre (1991$). Ready, Berger, and Blomquist (1997) found that people were willing to pay more taxes to retain land in thoroughbred horse farming in Kentucky. They estimated that the median value of a converted farm is about $0.49 per person per year (199o$). This increases as peo- ple perceive that a higher percentage of farms will be lost. Rosenberger and Walsh (1997) found that households in Colorado will pay $86 to $162 to increase preserved ranchland from 25 percent to 50 percent and from 5o percent to 75 percent (1993$). People in the Rocky Mountains were willing to pay more than those in South Carolina and eastern Canada, similar amounts to those in Alaska but less than those in the urban fringe of Massachusetts. 1s In a slightly different type of study, Lopez, Shah, and Altobello (1994) found that two of the three studied rural communities in Massachusetts and Alaska had too few acres of farm- land relative to the optimum amount suggested by the communities'value for farmland. Given the public's willingness to pay to retain agricultural land, the authors concluded that in highly urbanized areas, the local area would have been better off if more land had been pre- served for agricultural uses. Figure 2.6. Estimated Values to Society of Preserving Agricultural Land Location Average Willingness to Pay Measure of value aggregated (Papers) per Household per Year over Households per Thousand acres (20005) (20005) South Carolina $9-16 $23-61 (Bergstrom et al t985) Alaska $126-239 $830 (Beasley et al. 1998) Eastern Canada $62-109 $123 (Bowker and Didychuk 1994) Colorado (Ranchland) $86-144 (Rosenberger and Walsh 1997) Suffolk County New York 540-i62 $1,355 (Johnston et al. 2001) Source: Extracted from table 2, "Estimated Values for Open Space Services from Stated Preference Studies" McConnell and Walls (2005). Many studies (although not all) have found that people will pay more for houses near farmland (figure 2.7). Geoghegan, Lynch, and Bucholrz (2003) found that in two of the three Maryland counties they studied, adjacency to preserved farmland actually increased the value of nearby houses. Irwin (2002) found that people in Maryland are willing to pay more for a house near permanently preserved open space ($3,307) rather than pastureland that could be developed at some point in the future. htivin suggests that people value open space because it is not development. A study in Ohio (Irwin, Roe, and Morrow-Jones 2002) found that the value of preserv- ing a single acre as permanent cropland is between Si and $3 per year and from 512 to $38 per house (about 1 to 4 percent of housing value). Thorsnes (2oo2) finds that people are willing to pay $5.80o to $8,400 more for a lot or a house to be next to a forest. Sengupta and Osgood (2oo3) found that hobby ranchers would pay an extra 51,416 for their parcel to be next to greener pastures in the Southwest. Ready and Abdalla (2005) found that open space within 400 meters of one's house increases its value in Pennsylvania They also found that forestland increased housing value more than cropland or pastureland and that preserved land increased housing values less than developable land-the reverse of the Maryland studies (Geoghegan, Lynch, and Bucholtz 2003: Irwin 2002)-although forest, preserved land, and developable land all increase hous- ing values. In their examination of the value of open space, McConnell and Walls (2oo5) concluded that people with higher incomes tend to value open space and will pay more for it. 19 Figure 2.7. Estimated Values of Agricultural and Forest Proximity Marginal Value (as percentage of mean house price) Backing to forest preserve $5,800-S8400 (Thorsnes 2002) (19-35% of lot price; 2.9-6.8% of house price) Conversion of 1 acre of pastureland to: Conservation land 53,307 (i.87%) Forest land 41,424 (o.82%) (Irwin, 2002) i percent increase in the open space surrounding the house: Preserved land So-1,3o6 (0-0.71%) Unpreserved and convertible 4768-o (-0.39-0%) agricultural and forest land (Geoghegan. L)vch and Bucholtz 2003) Source: Extracted from table 1, "Estimated Values of Open Space Proximity from Selected Fledonic Price Studies," McConnell and Walls (2oo5). PROPERTY TAX REVENUES If housing prices increase when agricultural land is preserved, farmland preservation pro- grams may actually increase the tax revenues of local communities even when the counties have preferential taxation programs. Geoghegan, Lynch, and Bucholtz (2oo3) found that pre- served farmland increased the value of nearby houses enough to generate sufficient property tax revenues to enroll additional acres of agricultural land into the preservation programs. They concluded that agricultural preservation programs could be self-financing at least in the short term, although this may not hold in rural or predominately agricultural counties. Of course, communities could use the additional taxes for other purposes. In addition, while the preferential taxation programs may result in agricultural lands pay- ing less property tax than if they were tweed at the land's full market value, cost of community services studies across the United States have found that agricultural lands pay more in prop- erty taxes than the cost of the services they use: that is, agricultural land has a net positive benefit in terms of collected property taxes subsidizing residential development. These programs have been instrumental in slowing the rate of farmland loss. Lynch and Carpenter (2oo3) found that counties with preferential taxation programs had a farmland loss rate of o.81 percent, while counties without such a program had a loss rate of 1.58 per- cent. Counties with preferential taxation programs had farm loss rates almost 0.52 percent lower than counties without programs. Gardner (1994) and Blewett and Land (1988) had similar results. These programs also increase farmers' and landowners' wealth, which could i stabilize the financial health of the agricultural operations (Chicoine, Sonka, and Doty 1982). LOCAL FOOD SUPPLY According to Fischel (1982) and Dunford (1983), while farmland is disappearing from cer- tain regions, sufficient national land resources remain to ensure the nation's food security However, many people are demanding and supporting a local source of farm products to o- 20 obtain fresher products. The most common farmer-to-consumer direct operations are pick- your-own operations, roadside stands, farmers' markets, and direct farm markets. The num- ber of U.S. farmers' markets more than doubled from approximately 1,100 in 1980 to more than 2,80o in 1000 (Testing 1998: Griffin and Frongillo 1003). Similarly, a newer way to obtain local farm produce is through a community-supported agriculture (CSA) group. The number of CSA groups in the US. continues to grow from an estimated 635 in 1996 to more than 1,000 in 1999 (Well and Gradwell 2001). In a CSA group, farmers share the economic risks with consumers who pay a preseason subscription to the farm in return for a weekly delivery of produce throughout the growing season. If the farm does well, participating con- sumers receive a bigger share of local produce, but if the farm has a bad year, they receive less. Preserving farmland helps ensure a continued supply of locally grown produce as a growing clientele of interested local customers helps farmers improve their economic well-being. CONCLUSION Farmland preservation can benefit local communities in many ways, resulting in economic viability, better quality of life, possibly positive fiscal impacts, and local produce. As farmland preservation programs mature, we also can learn from their histories how to make them operate more effectively to increase the positive impacts. For example, Lynch and Musser (2001) found that if transfer -of development rights programs allocated rights differently, they would be able to attain more of the programs' objectives. For those observant readers who question why no mention was made of the impact on development patterns, this author was unable to find high-quality academic studies that addressed this issue well. This is not to suggest that farmland preservation has not had an impact on development patterns. Rather, the lack of research stems from [methodological dif- ficulties as well as the complexities of the issue given the multiple land use regulations in the country. More information on this topic definitely would be useful for communities when they confront this issue. 21 REFERENCES Adelaia, A. O., T. Miller, and M. Taslim. 1998. Land values, market forces, and declining dairy herd size: Evidence from an urban-influenced region. Agricultural Resource and Economics Review 27 (1): 63-71- Bastian, C. T, D. M. McLeod, M. J. Germino, W A. Reiners, and B. J. Blasko. 2002. Environmental amenities and agricultural land values: A hedonic model using Geographic Information Systems data. Ecological Economics 40:337-349. Beasley. S. D., W G. Workman, and N. A. Williams. 1986. Estimating amenityvalues of urban fringe farmland: A contingent valuation approach: Note. Growth andchange 17 (4): 70-78. 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Washington, DC: Congressional Research Service. Festing, H. 1998. Fannas'nmrkets: An American success story. Bath, UK: Ecologic Books. Fischel, W. 1982. Urbanization of agricultural land: A review of the national agricultural land study Land Economics 58:236-259. ---.1985. The economics ofzoning laws: A property rights approach to American land use connok. Baltimore, MD: Johns Hopkins University Press. Gardner, B. D.1977 The economics of agricultural land preservation. American journal of Agricultural Economics 59 (December): 1027-1036. Geoghegan, J., L. Lynch, and S. Bucholtz. 2003. Capitalization of open spaces into housing values and the residential property tax revenue impacts of agricultural easement programs. Agricultural and Resource Economics Review 32 (1): 33-45. Govindasamy, R., and R M. Nayga, Jr. 1997 Determinants of fanner-to-consumer direct market visits by type of facility. A logit analysis. Agricultural and Resource Economics Review 26 (1): 31-38. Griffin, M. R., and E. A. Frongillo. 2003. Experiences and perspectives of farmers from upstate New York farmers' markets. Agriculture and Human Values 20: 189-203. Halstead, J. M. 1984. Measuring the nonmarket value of Massachusetts agricultural land: A case studyjoumaloftheNortheastentAgrindtumlEcowmksCouncil13 (1):12-19. Irwin, E. G. 2002 The effects of open space on residential property values. Lams EcomWics 78 . (4):465-480 Irwin, E. G., and N. E. Bockstael. 2001. The problem of identifying land use spillovers: Measuring the effects of open space on residential property values. Ameriwnjounud of Agricultural Economics 83 (3): 698-704. Irvin, E., B. Roe, H. Morrow-Jones. 2oo2. Theeffeasoffarmland farmlandpresenntionandother neighborhood amenities on proximate housing values: Results ofa conjoint analysis ofhousing choice. Long Beach, CA: American Economic Association Annual Meeting, July 28-31. Johnston, R. J., J. J. Opaluch, T. A. Grigalunas, and M. J. Mazzotta. 2001. Estimating amenity benefits of coastal farmland. Growth andChangc 32 (Summer): 305-325. Johnston, R. S. K. Swallow, and D. M. Bauer. 2002. Spatial factors and stated preference 22 values for public goods: Consideration for rural land use. Land Economics 78 (4):481-500. Kline, J., and D. Wilchens. 1996. Public preferences regarding the goals of farmland preservation programs. Land Economics 72 (4): 538-549 ---.1998. Measuring heterogeneous preferences for preserving farmland and open space. Ecological Economi5 26: 111-224. Lewis, D. J., G. L. Hunt, and A. J. Plantings 2002. Public conservation land and employment growth in the northern forest region. Lanced Economics 78 (2): 245-259. Krieger, D. 1999. Savingopen spaces: Publksuppon forfannlarul protection. Working Paper Series 1x99-1. Chicago: Center for Agriculture in the Environment, April. 2003- Does public lands policy affect local wage growth? Growth andchange 34 (1): 64-86. Lopez, R. A., F. Shah, and M. Altobello. 1994. Amenity benefits and the optimal allocation of land. Land Economics 70: 53-62. Lynch, L., and J. Carpenter. 2003. Is there evidence of a critical mass in the mid-Atlantic agriculture sector between 1949 and 1997? Agriculturaland Resource Economics Review 32 (April): 116-128- Lynch, 1., and S. J. Lovell. 2003. Combining spatial and survey data to explain participation in agricultural land preservation programs. Land Ecoron h3 79 (May): 259-276. Lynch, L., and W. N. Musser. 2001. A relative efficiency analysis of farmland preservation programs. Land Economics 77 (November): 577-594 McConnell, K. E. 1989. The optimal quantity of land in agriculture. Northeasternjournal of Agricultural and Resource Economics 18 (October): 63-72. McConnell, V. and M. Walls. 2005. The value of open space: Evidence from studies of wnmarket benefits. Washington, DC: Resources for the Future, January. Nickerson, C. J., and D. Hellerstein, 2003. Protecting rural amenities through farmland preservation programs. Agricultural and Resource Economics Review 32 (April): 129-144. Ready, R. C., and C. Abdalla. 2005. The impacts of land use on nearby, property values: Estimates from a hedonic house price model. In Land Use Problems and conflicts: Causes, Consequences, and Solutions, ed. S. J. Goetz, J. S. Shortie, and J. C. Bergstrom. New York: Routledge Economics, 279-300. Ready, R. C., M. C. Berger, and G. Blomquist. 1997 Measuring amenity benefits from farmland: Hedonic pricing vs. contingent valuation. Growth and Change 28 (4) 438-458 Rosenberger, R. S., and R. G. Walsh. 1997 Nonmarket value of western valley ranchland using contingent valuation. Journal ofAgruultural and Resource Economic; 22 (2): 296-309. Sengupta, S., and D. E. Osgood. 2003. The value of remoteness: A hedonic estimation of ranchette prices. Ecoogical Economics 44: 91-103. Thorsnes, P. 2002. The value of a suburban forest preserve: Estimates from sales of vacant . residential buildinglots. LandEconomics78 (3): 426-¢1 Wells, B. L., and S. Gradwell. 2001. Gender and resource management. Community supported agriculture as caring-practice. Agriculture and Human Values 18: 107-119. Wolfram, G. 1981. The sale of development rights and zoning in the preservation of open space: Lindahl equilibrium and a case study. LandECOnofnics 57 (3): 398-413 23 Chapter 3 Protecting the Source: Conserving Forests to Protect Water Caryn Ernst, The Trust for Public Latin Richard Gullick, American Water Kirk Nixon, San Antonio Water System In 2002, The Trust for Public Land (TPL), in cooperation with the American Water Works Association's (AW WA) Source Water Protection Committee, undertook a study to statistically assess the impacts of declining forest cover on the cost of treating drinking water. The researchers concluded that the cost of treatment for plants using surface water supplies varies depending on forest cover in the source area: the less forest cover, the more expensive the water treatment. The findings were published in the May 2004 edition of AW WAs journal, Opflow, and are reprinted here with the permission of AW WA. Through a partnership with the US. Forest Service, TPL is currently expanding and refining the 2002 study. Information on treatment costs and water quality from approxi- mately 8o drinking water treatment plants will be compared with recent land cover data for each water treatment plants raw water source drainage areas. Other partners include professors from the University of Massachusetts at Amherst and the University of North Carolina's Institute of Government. Study results will be available by the summer of 2007 and will be disseminated broadly to individuals and organizations interested in this topic. If you have any questions or would like to be included in the distribution, please contact Kelley Hart at (202) 543-7552 or kefleyhart@tpl.org. Reprinted from opflmv, V01. 30, No. 5 (May 2004), by permission. Copyright © 2004. American Water Works Association. More than a century ago, many of America's fastest growing cities, such as Boston and New York, bought land in their source areas to provide lasting protection of water resources critical for sustaining their populations in the future. To this day, these cities, some of the largest in the country, have relatively clean source waters that require mini- mal treatment. Advancements in science and technology have enabled water utilities to effectively treat most known contaminants from drinking water sources and to provide American citizens with some of the safest drinking water in the world. However, these advance- ments have contributed to a movement away from protecting and managing our source areas and to the unfortunate notion that the quality of our raw water supplies is less important. Treatment alone, although critical to preventing disease, should not be the sole pro- tection of our drinking water. Multiple barriers to disease agents need to be maintained if we are to provide the greatest protection to public health. A multiple-barrier approach to drinking water protection involves several consecutive and interrelated steps, including selection of high-+-quality source water(s), source water management and protection, appropriate treatment, distribution system management, and water quality monitoring. Current research on the effects of urban and agricultural runoff in raw water sources on public health and recognition of the high costs and limitations of technological fixes has led water supply and watershed managers to revisit two principles that were taken for granted a century ago: i. The public's water supply should be reasonably clean to begin with. 24 i. Forests and natural lands are critical to the quantity and quality of water supplies. Water suppliers and municipalities can build effective partnerships to conserve forested land and protect their source water. A recent study shows the relationship between forests and clean water, and the resulting effects on treatment costs. WHY PROTECT THE SOURCE? A major reason suppliers are revisiting the idea of source protection is the growing real- ization that allowing raw water quality to degrade, in addition to threatening public health, increases treatment and capital costs. Protecting forests-which reduces erosion and sediment, improves water purity, and in some cases captures and stores water-is a cost-effective way to provide clean drinking water, according to Running Pure, a report by the World Wildlife Fund and the World Bank "For many cities, time is running out" said David Cassells, a World Bank forest specialist. "Protecting forests around water catchment areas is no longer a luxury but a necessity" Although little research has been done on this issue, a study of 27 water suppliers conducted in aooz by The Trust for Public Land and the American Water Works Associations Source Water Protection Committee found that water treatment costs for utilities using primarily surface water supplies varied depending on the amount of forest cover in the watershed. Approximately 40 water suppliers were asked to complete a writ- ten survey describing their watershed, treatment system, and treatment costs; 33 respons- es were received, of which 27 were included in the analysis. (Six responses were not used in the final analysis, because either the data were incomplete or the source area or size of the supply was too large to be comparable to the other respondents) Not all the water utilities were selected randomly, as some were solicited to provide a diverse range of watershed types, and all respondents primarily use surface water. The survey results indicated that operating treatment costs decreased as forest cover in a source area increased. aF For every to percent increase in forest cover in the source area (up to about 6o percent forest cover), treatment and chemical costs decreased by approximately zo percent. of Approximately 50 to 55 percent of the variation in operating treatment costs can be explained by the percent of forest cover in the source area. Not enough data were obtained on suppliers that had more than 65 percent forest cover in their watersheds to draw conclusions; however, it is suspected that treatment costs level off when forest cover is between 7o and too percent. The 50 percent varia- tion in treatment costs that cannot be explained by the percent forest cover in the water- shed is likely explained by varying treatment practices, the size of the facility (larger facil- ities pay lower costs per gallon), the location and intensity of development and row crops in the watershed, and agricultural, urban, and forestry best management practices. Findings show that the more forest cover there is in a watershed, the lower the treat- ment costs for suppliers drawing from surface water sources. Figure 3.t shows the change in treatment costs predicted by this analysis, the average daily cost of treatment if a sup- plier treated az million gallons per day, and the average production for surveyed suppli- ers. FOREST CONSERVATION AS A BARRIER Changes in land use can affect source water quality and, thus, treatment costs. Efforts to protect standing forests and natural lands from development or intensive agriculture will help communities avoid future increases in treatment expenditures. Improving land use practices and protecting lands that serve as natural filters for contaminants, such as forests, riparian areas, and wetlands, is critical to reducing pollutants that reach our raw water sources. z5 Figure 3.1. Water Treatment and Chemical Costs Based on Percent of Forested Watershed Percent of Treatment and Percent Change Average Treatment Watershed Chemical Costs in Costs Costs per day at Forested per Million Gallons az Million Gallons 10% $115 19% $2,530 zo% $93 zo% $2,046 30% 573 21% $1,606 40% $58 21% $1,276 50% $46 21% $1,012 60% $37 19% 5814 A growing understanding of the role that forests and natural lands play in filtering pollutants and maintaining water quantity has led many municipalities and water suppli- ers, particularly those in growing communities, to consider land protection as part of a multiple-barrier approach to providing safe drinking water. These communities have fouled that land conservation * offers permanent protection of critical watershed or recharge land; * is perceived as equitable by landowners, as it compensates them for the value of their property; sf is broadly supported by voters; ah provides multiple benefits to communities, such as flood control, recreation, and the protection of historic and environmental resources; and * offers land use control options for communities that do not have regulatory authority in their source area. Local governments and water suppliers around the country are teaming up with land trusts, community groups, and other stakeholders to protect forests, wetlands, and other natural lands as part of a comprehensive approach to protecting their drinking water sources. This is happening in Austin and San Antonio, Texas, where communities are partnering to protect the Edwards Aquifer. PROTECTING THE EDWARDS AQUIFER AUSTIN, TEXAS The Edwards Aquifer, on the western side of Austin, is the sole drinking water source for more than 1.5 million people, including residents of San Antonio and Austin. A portion of the Barton Springs segment of the aquifer is surface water, but it is connected to the Edwards Aquifer as it flows below and around Austin. Barton Springs, identified as the most endangered aquifer in Texas, is highly vulnerable to pollution because of its smaller size, high soil permeability, and high recharge capability and because of the region's land development boom. In 1995 and 1996, a citizens planning committee studied current and future growth patterns in the region and determined that the city's surface water needed protection beyond current regulatory restrictions. Building on that recommendation, the Austin city council designated the most sensitive third of the Austin region-land that drains into Barton Springs and the Highland Lakes-as a Drinking Water Protection Zone. They designated the remaining two-thirds as a Desired Development Zone, which included the urban core, commercial corridors, and the central business district. The new designa- tions made it more difficult to develop in the protection zone and created incentives for 26 building in the development zone. Even as Austin voters tried to strengthen development regulations, they moved to protect the watershed through land acquisition. A 1991 poll jointly sponsored by TPL and Citizens for Open Space revealed that Austin residents favored open space acquisi- tion, particularly to protect water quality, and would approve increased property taxes to pay for the land. With technical assistance from TPL, the city passed a $20 million bond act for the purchase of a new Barton Creek Wilderness Park, which would protect the most critical areas around the springs. In 1997, the city's Watershed Protection Department published the Barton Creek Report, which recommended further conservation to protect drinking water quality through the purchase of land and development rights. In 1998, voters approved several land protection funding measures, including a $65 million revenue bond to purchase land and easements within the Drinking Water Protection Zone and a $75.9 million bond to create parks and greenways. Together, they raised a total of $14o million to help meet the community's recreation and drinking water protection goals. SAN ANTONIO, TEXAS As the residents of Austin took action to protect the portion of the Edwards Aquifer within their jurisdiction, the residents of San Antonio continued their efforts to protect a sensitive portion of the same aquifer in northern San Antonio. In a May aooo bond measure, San Antonio voters approved a one-eighth cent sales tax for land acquisition to protect the Edwards Aquifer and to create greenways along sensitive creeks within the city. This measure is expected to raise $65 million over the next three to five years. Of the four bond measures on the ballot in zooo, including measures to increase tourism and attract new businesses, the drinking water protection measure was the only one approved by voters. Years of public education efforts by the San Antonio Water System (SAWS) had laid the groundwork for the measure by educating residents on community water supply issues. The SAWS efforts to acquire land, which began in 1993 with the acquisition of Government Canyon, highlighted the importance of land protection to the public. The acquisition of Government Canyon was spearheaded by TPL, which structured a cooper- ative effort with SAWS, Texas Parks and Wildlife Department, and the Edwards Underground Water District (now the Edwards Aquifer Authority). Funding came par- tially from SAWS, which continues to budget annual funding for the acquisition of both fee-simple purchases and conservation easements over the Edwards Aquifer Recharge Zone. The final impetus and popular support necessary to pass the bond measure came from grassroots efforts to mobilize voters and educate the public about the threat pre- sented to their water supply by rapid development within the aquifer's recharge zone. With approximately half of the aquifer's 8o,ooo acres of recharge zone already developed or planned for development, TPL, The Nature Conservancy, and the Bexar Land Trust work closely with the City of San Antonio, SAWS, and the Texas Parks and Wildlife Department to quickly protect the remaining sensitive lands before further development can take place. Since 1993, TPL has protected more than to,ooo acres of recharge land over the Edwards Aquifer in the San Antonio area Most of the land has been conveyed to the Texas Parks and Wildlife Department, and water quality conservation easements on the properties are conveyed to the City of San Antonio. Water quality conservation ease- ments permanently prevent development that could be detrimental to water resources. Some of this land has been purchased by leveraging local bond and sales tax dollars to attract federal Land and Water Conservation Funds. 27 Chapter 4 Environmental and Economic Benefits of Preserving Forests within Urban Areas: Air and Water Quality David J. Nowak, USDA Forest Service, Northern Research Station Jun Wang South Florida Water Management District Ted Endreny, S UNY College of Environmental Science and Forestry INTRODUCTION Forests and trees in urban areas provide many environmental and economic benefits that can lead to improved environmental quality and human health. These benefits include improvements in air and water quality, richer terrestrial and aquatic habitat, cooler air temperatures, and reductions in building energy use, ultraviolet radiation levels, and noise. As urbanization expands within forested regions, trees and forests are replaced with compacted soils, buildings, roads, and cars. This shift from forest to urban land uses changes the local and downwind/downstream environment and consequently impacts local and regional air and water quality. Poor air quality leads to diminished human health, decreased visibility, and degrada- tion of materials. In the United States, 158 million people live in areas that have not reached attainment for the national eight-hour ozone (O) standard; more than 29 mil- lion live in nonattainment areas for particulate matter less than io microns (PM10);15 million live in carbon monoxide (CO) nonattainment areas; and about i million live in sulfur dioxide (SO2) nonattainment areas (U.S. EPA 1006). Poor water quality also affects human health and degrades aquatic habitats, which may also degrade human health and amenities by increasing insect- and waterborne dis- eases and causing odor and visual degeneration. Although various streams are monitored for attributes of water quality across the nation (U.S. EPA 1998), there is currently no national standard monitoring system in place to assess the wide range of water quality impacts on society (Lombardo et al. 1001). The U.S. Environmental Protection Agency (EPA) expects that state water-monitoring programs will evolve over the next ten years so that states will have a common foundation for such programs. Core indicators have been recommended to monitor water quality that affect aquatic life and wildlife, recre- ation, drinking water, and fish shellfish consumption. These indicators include dissolved oxygen, temperature, pH, stream flow, nutrients, sediments, total dissolved solids, nitrates, pathogens, trace metals, and specific pesticides (WEF/ASCE 1998). However, other physical and biological indices are needed (Rogers et al.lool). In addition to water quality degradation, other problems associated with changes in stream flows include instability in the drainage system, reduced infiltration of water into soils, and increase peak flows in streams (Herricks 1995; Thorne 1998; FISRWG 1999). Instability in the drainage system can rapidly erode streambanks, damage streantside veg- etation, and widen stream channels (Hammer 1971). In turn, this instability will result in lower water depths during nonstorm periods, higher than normal water levels during wet weather periods, increased sediment loads, and higher water temperatures (Brookes 1988). Preserving or expanding forest stands in and around urban areas is critical to sustain- ing air and water quality. The objective of this paper is to review the effect and value of urban trees and forest stands on air and water quality. TREE EFFECTS ON Al R QUALITY Urban vegetation directly and indirectly affects local and regional air quality by altering the urban atmospheric environment. The four main ways that urban trees affect air qual- ity are (Nowak 1995): 28 Temperature reduction and other microclimatic effects Removal of air pollutants Emission of volatile organic compounds and tree maintenance emissions Energy effects on buildings TEMPERATURE REDUCTION Tree transpiration and tree canopies affect air temperature, radiation absorption and heat storage, wind speed, relative humidity, turbulence, surface albedo, surface roughness, and, consequently, the evolution of the mixing-layer height (height of the atmosphere in which pollutants are mixed). These local meteorological changes can alter pollution con- centrations in urban areas (Nowak et al. 1998). Although trees usually contribute to cooler summer air temperatures, their presence can increase air temperatures in some instances (Myrup. McGinn, and Flocchini 1991). In areas with scattered tree canopies, radiation reaches and heats ground surfaces; at the same time, the canopy may reduce atmospheric mixing such that cooler air is prevented from reaching the area. In this case, tree shade and transpiration may not compensate for the increased air temperatures due to reduced mixing (I-Ieisler et al. 1995). Maximum midday air temperature reductions due to trees range from 0.040C to 0.20C per percentage canopy cover increase (Simpson 1998). Below individual and small groups of trees over grass, midday air tem- peratures at 1.5 meters above ground are 0.70C to 1.30C cooler than in an open area (South and South 1993). Reduced air temperature improves air quality because the emis- sion of many pollutants and/or ozone-forming chemicals is temperature dependent. Decreased air temperature can also reduce ozone formation. REMOVAL OF AIR POLLUTANTS Trees remove gaseous air pollution primarily by uptake via leaf stomata, though some gases are removed by the plant surface. Once inside the leaf, gases diffuse into intercellu- lar spaces and may be absorbed by water films to form acids or react with inner-leaf Sur- faces (Smith 1990). Trees also remove pollution by intercepting airborne particles. Some particles can be absorbed into the tree, though most intercepted particles are retained on the plant surface. The intercepted particle often is resuspended to the atmosphere, washed off by rain, or dropped to the ground with leaf and twig fall (Smith 1990). Consequently, vegetation is only a temporary retention site for many atmospheric parti- cles. In 2000, estimated annual pollution removal by trees in Atlanta, Boston, New York, and Philadelphia varied from 257 to 1,521 metric tons (figure 4.1). Pollution removal per square meter of canopy cover was fairly similar among these cities (Boston: 8.1 grams per square meter per year; New York 9.1 grams per square meter per year; Philadelphia: 9.7 grams per square meter per year, Atlanta: 12.0 grams per square meter per year). These standardized pollution removal rates differ among cities according to the amount of air pollution, length of in-leaf season, precipitation, and other meteorological variables.. 29 Figure 4.1. Estimated Pollution Removal by Trees Atlanta Boston New York Philadelphia Pollutant' Removal Value Removal Value Removal Value Removal Value (metric tons) (S in thousands) (metric tats) (S in thousands) (metric tons) (S in thousands) (metric tons) (s to thousands) 1 03 672 $4.539 108 $729 536 $3,622 185 51,246 (158-858) (1,o66-5.793) (27-132) (184-892) (136-722) (920-4.873) (49-239) (332-1.615) PM10 528 $2,378 73 $330 354 $1,595 194 ° $872 (2o6-824) ($929-3.716) (29-114) (5129-515) (138-553) (623-2.493) (76-3o2) (341'=1,363). N02 181 $1,220 48 $324 364 $2.459 93 5630 (93-231) (5628-1,559) (22-61) ($148-409) (171-507) (1,155-3,421) (46-123) (312-827) 50.2 89 $147 23 $37 199 $329 41 $67 (42-149) (5 69-246) (11-34) ($18-56) (to6-337) ($175-557) (22-68) (536..'112) C0 39 $37 6 $5 67 $64 to S1o To`ral' 1,509 $8,321 257 $1,426 1,521 $8,071 522 S4,826 (538-2101) (52,729-11.351) (94-346) ($484-1.878) (619-2.185)($2.938-11.408) (203-742)(51.036-3:927) 'Pollutant: 03 - ozone PMlo - particulate matter less than 10 microns; assumes 50% resuspension of particles N02 - nitrogen dioxide S02 - sulfur dioxide CO - carbon monoxide Note: The figure shows estimated pollution removal (metric tons) by trees during nonprecipitation periods (dry deposition) and associ- ated monetary value (thousand dollars) for Atlanta (341 square kilometers; 36.7 percent tree cover), Boston (143 square kilometers; 22.3 percent tree cover), New York (799 square kilometers; 2o.9 percent tree cover), and Philadelphia (341 square kilometers; 15.7 percent tree cover). Estimates were made using the Urban Forest Effects (UFORE) model (Nowak and Crane 2ooo) based on tree data collect- ed in the late 19gos and local hourly meteorological and pollutant data from 2ooo. Numbers in parentheses represent expected range of values (no range determined for CO). Monetary value of pollution removal by trees was estimated using the median externality values for United States for each pollutant (Murray et al. 1994). Externality values for 03 were set to equal the value for NOT Air quality improvement in these cities from pollution removal by trees during day- time of the in-leaf season averaged o.6 percent for particulate matter, 0.57 percent for ozone, 0.55 percent for sulfur dioxide, 0.35 percent for nitrogen dioxide, and o.oo9 per- cent for carbon monoxide. Air quality improves with increased percent tree cover and decreased mixing-layer heights. In urban areas with too percent tree cover (i.e., contigu- ous forest stands), short term improvements in air quality (one hour) from pollution removal by trees were as high as 15 percent for ozone and sulfur dioxide, 8 percent for particulate matter and nitrogen dioxide, and 0.05 percent for carbon monoxide (figure 4.2). To estimate pollution removal by trees in numerous U.S. cities, a pollution removal calculator can be found at http;//www.fs.fed.us/ne/syracuse/Tools/tools.htm. Pollution removal by urban trees in the United States is estimated at 711,000 metric tons ($3.8 bil- lion value) annually (Nowak, Crane, and Stevens, 2006). 30 Figure 4.2. Air Quality Improvement by Trees Atlanta Boston New York Philadelphia Pollutant` City Forest City Forest City Forest City Forest 03 o.8% 14.8% 0.7% 14.6% 0.5% 11.4% 0.3% 9.4% PM10 0.9% 8.5% o.6% 73% 0.5% 6.8% 0.4% 77% N02 0.5% 8.3% 04% 74% 0.3% 6.3% 0.2% 5.3% S02 0.7% 14.8% 0.7% 14.9% 0.5% 11.3% 0.3% 9.6% 'Pollutant: 03 - ozone PMIo - particulate matter less than to microns; assumes 50% resuspension of particles N02 - nitrogen dioxide S02 - sulfur dioxide Note: The figure shows the estimated average percentage air quality improvement in cities due to pollution removal by trees dur- ing daytime of the in-leaf season (city) and maximum estimated hourly air quality improvement in areas with loo percent tree cover (forest). Maximum air quality improvement was less than 0.03 percent for carbon monoxide for all cities. EMISSION OF VOLATILE ORGANIC COMPOUNDS Emissions of volatile organic compounds (VOCs) by trees can contribute to the forma- tion of ozone and carbon monoxide. However, in atmospheres with low nitrogen oxide concentrations (e.g., some rural environments), VOCs can actually remove ozone (Crutzen et al. 1985; Jacob and Wofsy 1988). Because VOC emissions are temperature dependent and trees generally lower air temperatures, increased tree cover can lower overall VOC emissions and, consequently, ozone levels in urban areas (Cardelino and Chameidcs 1990). VOC emission rates also vary by species. Nine genera that have the highest stan- dardized isoprene emission rate (Geron. Guenther, and Pierce 1994; Nowak et al. 2oo2), and therefore the greatest relative effect among genera on increasing ozone, are beef- wood (Casuarina spp.), Eucalyptus spp., sweet gum (Liquidambar spp.), black gum (Nyssa spp), sycamore (Platanus spp), poplar (Populus spp), oak (Qutrcus spp), black locust (Robinia spp), and willow (Salix spp.). However, due to the high degree of uncertainty in atmos- pheric modeling, results are currently inconclusive as to whether these genera will con- tribute to an overall net formation of ozone in cities (i.e., ozone formation from VOC emissions are greater than ozone removal). Some common genera in Brooklyn, New York, with the greatest relative effect on lowering ozone were mulberry (Mono spp.), cherry (Prunus spp), linden (Tilia spp), and honey locust (Gleditsia sp) (Nowak et al. 2002). Because urban trees often receive relatively large inputs of energy, primarily from fossil fuels, to maintain vegetation structure, the emissions from these maintenance activ- ities need to be considered in determining the ultimate net effect of urban forests on air quality. Various types of equipment are used to plant, maintain, and remove vegetation in cities. This equipment includes vehicles for transport or maintenance, chain saws, back- hoes, leaf blowers, chippers, and shredders. The use of fossil fuels to power this equip- ment leads to the emission of carbon dioxide (approximately 0.7 kilograms per liter of gasoline, including manufacturing emissions [Graham, Wright, and Tinhollow 1992]) and other chemicals such as VOCs, carbon monoxide, nitrogen and sulfur oxides, and 31 n;v, i particulate matter (U.S. EPA 1991). Trees in parking lots also affect evaporative emissions from vehicles, particularly through tree shade. In Sacramento County, California, increasing parking lot tree cover from 8 to 50 percent could reduce light-duty vehicle VOC evaporative emission rates by 2 percent and nitrogen oxide emissions when starting a vehicle by less than I percent (Scott, Simpson, and McPherson, 1999). ENERGY EFFECTS ON BUILDINGS Trees reduce building energy use by lowering temperatures and shading buildings in summer and blocking winds in winter (Heisler 198( However, trees also can increase energy use by shading buildings in winter and may increase or decrease energy use by blocking summer breezes. Thus, proper tree placement near buildings is critical to achieve maximum building energy conservation benefits. When building energy use is reduced, pollutant emissions from power plants are also lowered. While lower pollutant emissions generally improve air quality, lower nitrogen oxide emissions, particularly ground-level emissions, may lead to a local increase in ozone concentrations under certain conditions due to nitrogen oxide scavenging of ozone (Rao and Sistla 1993). The cumulative and interactive effects of trees on meteorology, pollu- tion removal, and VOC and power plant emissions determine the overall impact of trees on air pollution. COMBINED EFFECTS Changes in urban microclimate affect pollution emission and formation, particularly the formation of ozone. A model simulation of a 20 percent loss in the Atlanta-area forest due to urbanization led to a 14 percent increase in ozone concentrations for a modeled day (Cardelino and Chameides 19go). Although there were fewer trees to emit VOCs, an increase in Atlantas air temperatures due to the urban heat island, which occurred concomitantly with tree loss, increased VOC emissions from the remaining trees and anthropogenic sources. This, in turn, altered ozone chemistry such that concentrations of ozone increased. A model simulation of California's South Coast Air Basin suggests that the air quali- ty impacts of increased urban tree cover may be locally positive or negative with respect to ozone. The net basinwide effect of increased urban vegetation is a decrease in ozone concentrations if the additional trees are low VOC emitters (Tana 1996). Modeling the effects of increased urban tree cover on ozone concentrations from Washington, D.C., to central Massachusetts reveals that urban trees generally reduce ozone concentrations in cities but tend to slightly increase average ozone concentrations in the overall modeling domain (Nowak et al. 2000). Interactions of the effects of trees on the physical and chemical environment demonstrate that trees can cause changes in pollution removal rates and meteorology, particularly air temperatures, wind fields, and mixing-layer heights, which, in turn, affect ozone concentrations. Changes in urban tree species composition had no detectable effect on ozone concentrations (Nowak et al. 2ooo). Modeling of the New York City metropolitan area also reveals that a 1o percent increase in tree cover within urban areas reduced maximum ozone levels by about 4 parts per billion, which was about 37 percent of the amount needed for attainment (Luley and Bond 2002). TREE AND IMPERVIOUS EFFECTS ON WATER QUALITY AND QUANTITY Human activity can dramatically alter land cover characteristics, impeding water infiltra- tion rates (Hamilton and Waddington 1999; Pitt and Lantrip 2ooo) and reducing per- colation and, consequently, water table levels (Lerner 2oo2) and stream baseflow regimes 32 (Faulkner, Edmonds-Brown, and Green 2000). When water is captured in engineered retention or detention basins, rather than infiltrated through forested plots, it undergoes less sorption and is found to pollute subsurface water quality (Thomas 2000; Fischer, Charles, and Baer, 2003) as well as the quality of surface runoff The result of traditional urban development is to impair important hydrological and watershed recharge and cleansing processes. Research has shown the importance of increasing pervious cover and augmenting subsurface recharge (Argue 1994; Nowakowska-Blaszczyk and Blaszczyk 1997). Removal of forest cover and/or increased impervious area due to urbanization is known to increase stream flow and peak runoff in streams (Leopold 1968; Kidd 1978; Codner, Laurenson, and Mein 1988; Mein and Goyen 1988). These changes in stream flows can lead to flooding, soil erosion, and sedimentation in streams (Anderson 1970; Urbonas and Benik 1995; McMahon and Cuffney 2000; Paul and Meyer 2001; Rose and Peters 2001). Conventional urban development increases the amount of stormwater runoff gener- ated by the landscape (Chow and Yen 1976; Boyd, Bufill, and Knee 1994; Beach 2002). The principal causes of this effect arc impervious surfaces-streets, parking lots, and buildings (Leopold 1968; Schueler 1994)-and compaction of the soil due to construc- tion activities (Hamilton and Waddington 1999; Pitt et al. 2003). Instead of soaking into the ground, rainfall is converted quickly to runoff and then rapidly removed from the site via sewers and manmade channels. As the volume of urban stormwater runoff has increased throughout the United States from the increase in impervious surfaces, the quality of surface runoff has degraded significantly (U.S. EPA 1983). According to U.S. General Accounting Office (2001), when natural ground cover is present over the entire site, normally to percent of precipitation runs off the land into nearby creeks, rivers, and lakes. In contrast, when a site is 75 percent impervious, 55 per- cent of the precipitation runs off into receiving waters. Runoff from parking lots and other paved areas is estimated at 98 percent of precipitation (USDA NRCS 1986). Water that runs off urban landscapes can no longer recharge groundwater supplies. For communities that depend on locally recharged aquifers, water shortages could limit future development and necessitate sprinkling bans and other restrictions. Increased runoff peaks and decreased lag time (the elapsed time between the onset of a storm and when the peaks occurs) are costly to a city as drainage systems must be designed for peak runoff conditions (Urbonas and Roesner 1993), which can increase downstream flood- ing. Water that runs over developed areas, including paved surfaces such as roads and parking lots, before reaching a water body is known as urban runoff and is an increasingly important category of water pollution (U.S. General Accounting Office 2001). Because of impervious surfaces, a typical city block may generate nine times more runoff than a woodland area of the same size (U.S. EPA 1996a). Urban runoff can adversely affect the quality of the nation's waters, and urban stormwater runoff has been identified as one of the leading sources of pollution to rivers, streams, lakes, and estuaries (U.S. General Accounting Office 2001). Urban runoff is known to be contaminated with numerous water pollutants (U.S. EPA 1983) that are by-products of urban activities, such as automobile use, lawn care, and industrial fallout (WEF/ASCE 1998). Urban runoff and its pollutants from both point and nonpoint sources can cause increases in sedimentation, water temperature, and pathogen levels and decreases in dissolved oxygen levels in bodies of water (Horner 1995: WEF/ASCE 1998). With regard to water, urban trees can affect both stream flow volume and quality. To date, most of the research has been on the effect of urban trees on stream flow. Trees affect stream flow rates primarily through three mechanisms: rainfall interception, soil water infiltration, and evapotranspiration. 33 RAINFALL INTERCEPTION Trees intercept rainfall on leaves and branch surfaces, thereby potentially reducing runoff volumes and delaying the onset of peak flows. Natural forest canopy interception, with subsequent evaporation from a wet canopy, which is affected by tree types and weather conditions, ranges from I I to 36 percent of annual precipitation in deciduous canopies and from 9 to 48 percent in coniferous canopies (H6rmann et al. 1996). The forest interception fraction is 35 to 40 percent of annual precipitation in the United Kingdom, where annual rainfall exceeds 1,ooo millimeters (Calder 1990, 2003). Such findings sug- gest that deforestation may have a significant effect on runoff generation. Urban tree interception of precipitation may be different from that of natural forests because both the microclimate and the tree architecture are different. Compared with more rural forests, urban forests have fewer trees per unit area, typically larger tree size, a more diverse mix of species with different phenological patterns, and greater spatial vari- ation in canopy cover (McPherson 1998). In Sacramento, the urban forest canopy is estimated to intercept n.1 percent of the annual precipitation (Xiao ct al. 1998). in summer, tree interception in Sacramento was 36 percent for an urban forest stand domi- nated by large, broadleaf evergreens and conifers (leaf area index = 6.1) and M percent for a stand dominated by medium-size conifers and broadleaf deciduous trees (leaf area index = 3.7). For five precipitation events with return frequencies ranging from 2 to zoo years, interception was greatest for small storms and least for large storms (Xiao et al. 1998). By intercepting and lowering the rainfall rate and intensity impacting the ground beneath the canopy, soil erosion can be reduced and soil water infiltration and percola- tion to groundwater increased. SOIL WATER INFILTRATION In addition to lowering rainfall rates beneath canopies, root growth and decomposition in forested land can increase the capacity and rate of soils to infiltrate rainfall and reduce overland flow. Forests can be used as buffers around water bodies or between impervious areas to naturally filter and infiltrate runoff. Thus, forest buffers reduce not only the quantity of urban runoff, but also pollutants carried with urban runoff through physical, chemical, and biological processes in the soil. EVAPOTRANSPIRATION Land cover affects evapotranspiration (ET). ET is a measure of the amount of water evaporated from surfaces or transpired (evaporated) from leaf surfaces and is important in the hydrologic process because it is a means by which liquid water is removed from the groundwater cycle and converted to atmospheric water vapor. Looking at a global aver- age, two-thirds of the precipitation that falls on the continents is evapotranspired. Of this amount, 97 percent is ET from land surfaces and 3 percent is open-water evapora- tion (I-Iornberger et al. 1998). Removal of forest cover can increase stream flow as a result of reduced ET. In the interior Columbia River Basin, annual average increases in runoff ranged from 4.2 to 10.7 percent, and reductions in evapotranspiration ranged from 3.1 to 12.1 percent due to decreased vegetation maturity as a result of logging (Matheussen et al. 2ooo). Evergreen trees usually have the highest actual ET, followed by deciduous trees, shrubs, and grasses, with differences diminished in areas with low mean annual precipitation (Matheussen et al. 2o0o). CUMULATIVE EFFECTS ON STREAM FLOWS AND RUNOFF Relatively little research has been conducted on the effects of urban trees on strearn flows and runoff compared to forest areas. In a review of vegetation changes on annual water yields across the world, Bosch and Hewlett (1982) found that, on average, a io percent change in tree cover caused an estimated 40 millimeter change in annual water yield for 34 coniferous forest and 25 millimeters for deciduous forest. A complete conversion from grass to evergreen trees on average decreases mean annual runoff by 400 millimeters and vice versa; a conversion from grass to deciduous trees on average decreases mean annual runoff by 250 millimeters and vice versa; and a conversion from grass to shrubs scrub on average decreases mean annual runoff by too millimeters and vice versa in a study of runoff changes in Victoria, Australia, following the clearing of a forest, the average maxi- mum increase in runoff occurred two years after clearing and was approximately equal to an additional 33 millimeters of runoff per year per to percent of area cleared (Nandakumar and Mein 1997). Forests also slow stonnwater runoff and provide water- shed stability and critical habitat for fish and wildlife (Sedell et al. 2000). Little research has been conducted on the effects of urban trees on stream flows and runoff Several estimates of the effects of urban forests on runoff have been calculated using the TR-55 model (Soil Conservation Service 1975). Although these estimates are limited in their capability to accurately estimate effects of urban forests on runoff volume and peak rate due to some important limitations of the model (e.g., Xiao et al. 1998), these studies represent most of the literature on this topic and provide first-order esti- mates of urban forest effects. Using this model to simulate urban forest impacts on stormwater runoff in Dayton, Ohio, Sanders (1986) demonstrated that existing tree canopy cover (22 percent) could lower potential runoff from a six-hour, one-year storm by about 7 percent. By increasing tree cover to 50 percent over all pervious surfaces, runoff reduction was increased to nearly 12 percent. A study of Tucson, Arizona, showed that increasing tree canopy cover from 21 (existing) to 35 percent and 5o percent could reduce mean annual runoff by 2 and 4 percent, respectively (Lormand 1988). In Austin, Texas, it was estimated that the existing trees reduce the potential runoff volmne by 850 million gallons, or 7 percent of a 55 inch, five-year storm (Walton 1997). Using the HSPF model (Bicknell et al. 1997), Neville (1996) studied the effects of alternative vegetation patterns in the Gaynns Falls watershed (Baltimore, Maryland) as a viable alternative for reducing stormwater discharges. Results indicated that tree canopy cover can have a substantial impact depending on land use. Model simulations revealed that changing tree cover from o to too percent for the existing conditions would reduce total runoff by about 26 percent. Base flow would decrease by more than 13 percent. Based on a newly developed model (Wang, Fndreny, and Nowak in review), esti- mates of the effects of urban tree cover in the Dead Run watershed (141o hectares) in Baltimore revealed that increasing tree cover over pervious surface from tt to 24 percent and increasing tree cover over impervious surfaces from 5 to 20 percent reduced total annual runoff by 3 percent (-140,000 cubic meters per year) and decreased peak flow from a 3.6 mm storm on August 13, 2000, by 12 percent. Reducing tree cover over pervi- ous areas from 12 to 6 percent and replacing it with impervious surfaces connected to streams led to a to percent increase in total annual runoff (-500,00o cubic meters per year) and a 30 percent increase in peak flow during the 3.6 millimeter storm event. These model simulations illustrate how urban forest management can have a modest influence on runoff volume. The societal value of nmoff reduction in urban streams is difficult to determine. Urban forests can reduce the need for stormwater management infrastructure, particu- larly at the urban fringe. Some studies have used proxy values related to retention pond costs and suggest that the value of reduced nmoff is on the order of hundreds of millions of dollars per year (e.g., Walton 1997). However, further research and evaluation of runoff reduction values are needed before a more certain valuation can be made. 35 WATERQUALITY EFFECTS More than a third of our nation's streams, lakes, and estuaries are impaired by some form of water pollution (U.S. EPA 1998). Pollutants can enter surface waters from point sources, such as single-source industrial discharges and wastewater treatment plants. However, most pollutants result from nonpoint source pollution activities, including rurroff from agricultural lands, urban areas, construction and industrial sites, and failed septic tanks. These activities introduce harmful sediments, nutrients, bacteria, organic wastes, chemicals, and metals into surface waters. Damage to streams, lakes, and estuaries from nonpoint source pollution was estimated at about $7 billion to $9 billion a year in the mid-198os (Ribaudo 198(). Point sources of pollution are largely controlled by requirements of the Clean Water Act. However, nonpoint source pollution remains the `nation's largest source of water quality problems' (U.S. EPA 19966). Nonpoint source pollution is difficult to control, measure, and monitor because it is diffuse in nature. Forests can reduce nonpoint source water pollution in many ways, help- ing to ensure a cleaner water supply; they can serve as filters, sinks, or transformers of pollutants. Pollutants are trapped in the forest and are then used by the plants as food for growth or are transformed through chemical and biological processes into nonharmhd forms. A continuous litter layer can help maintain a porous soil surface and high water infiltration rates; consequently, overland flow can be minimized in a forest. By decreasing the rate of surface runoff, groundwater recharge from seepage is increased, forest soil nutrients are conserved, and the productivity of the forest is maintained. Although there is a dearth of research on the effects of urban trees on water quality, data from the EPA's Nationwide Urban Runoff Program reveal that pollutant loadings from runoff in parks and low-density residential areas (areas that typically have higher tree cover and lower impervious cover) are significantly lower than from other urban land uses (U.S. EPA 1999). Research from rural areas also reveals that forests and trees can help improve water quality. Trees divert captured rainwater into the soil, where bac- teria and other microorganisms filter out impurities. This bio-filtration can dramatically reduce the sediment, pollutants, and organic matter that reach streams. Important envi- ronmental processes for water quality improvement include soil filtration of particles and adsorption of chemicals, nutrient assimilation by plants, and the degradation or volatilization of chemicals by microorganisms (Winogradoff zooz). One effective management practice in influencing water quality is the construction or conservation of riparian forest buffers along streams, lakes, and other surface waters. These forests can buffer nonpoint source pollution of waterways from adjacent land, reduce bank erosion, protect aquatic environments, enhance wildlife, and increase biodi- versity. Through the interaction of their unique soils, hydrology, and vegetation, riparian forest buffers influence water quality as contaminants are taken up into plant tissues, adsorbed onto soil particles, or modified by soil organisms. Riparian forests can affect stream sediment loads and the concentration of nutrients and other contaminants. SEDIMENTS Sediment refers to soil particles that enter streams, lakes, and other bodies of water from eroding land, including plowed fields, construction and logging sites, urban areas, and eroding stream banks (U.S. EPA 1995). Sedimentation of streams can have a pronounced effect on water quality and stream life, and reduces water clarity. In addition to mineral soil particles, eroding sediments may transport other substances, such as plant and animal wastes, nutrients, pesticides, petroleum products, metals, and other compounds that can lower water quality (Clark 1985; Neary, Swank, and Mekerk 1988). Urban sediment is typically more of a problem during site construction or restoration than during normal use of a site. Forested lands produce a small fraction of the sediment yielded by more intensive 36 land uses (Patric, Evans, and Helvey 1984; Yoho 1980). In a study of upper Chattahoochee River Basin, Georgia, the greatest suspended sediment yields were from urban areas, compared with forested and agricultural lands (Faye et al. 1980). In Virginia, forestry practices contributed little sediment, agriculture was an important source of sed- iment, and urban development contributed the most sediment (as well as other pollu- tants) (Jones and Holmes 1985). Studies indicate that forest riparian buffers can effectively trap sediment, with removal rates ranging from 6o to 9o percent of the sediment (Cooper et al. 1987; Daniels and Gilliam 1996). Along the Little River in Georgia, riparian forests have accu- mulated between 31 i.6oo and 471,900 pounds per acre of sediment annually over the last too years (Lowrance, Sharpe, and Sheridan 198(). Many factors influence the effec- tiveness of the buffer in removing sediments from land runoff, including sediment size and loads, slope, type and density of riparian vegetation, presence or absence of a surface litter layer, soil structure, subsurface drainage patterns, and frequency and force of storm events (Osborne and Kovacic 1993). NUTRIENTS Nutrients are essential elements for aquatic ecosystems, but in excess amounts, nutrients can lead to many changes in the aquatic environment and reduce the quality of water for human uses (Dupont 1991). Lawn and crop fertilizers, sewage, and manure are major sources of nutrients in surface waters. Industrial sources and atmospheric deposition also contribute significant amounts of nutrients (Guldin 1989). One of the most significant impacts of nutrients on streams is eutrophication, the excessive growth of algae and other aquatic plants in response to high levels of nutrient enrichment (U.S. EPA 1995). In addition, some forms of nutrients can be directly toxic to humans and other animals (Chen, McCutcheon, and Carsel 1994; Evanylo 1994). Streams draining agricultural watersheds have, on average, considerably higher nutri- ent concentrations than those draining forested watersheds. Nutrient concentrations are usually proportional to the percentage of land in agriculture and inversely proportional to the percentage of land in forest (Omernik 1977). The highest nitrogen and phosphorus yields typically occur in highly agricultural and urbanized watersheds, and lowest nutrient yields occur in streams of forested watersheds (e.g., Spruill et al. 1998; Hampson et al. 1000). Forest riparian zones have been shown to reduce between 48 and 95 percent of nitrogen and/or nitrates from runoff (Lowrance et al. 1984; Peterjohn and Correll 1984; Jordan, Correll, and Weller 1993; Snyder et al. j995). In New Zealand, where subsurface water flows moved through organic soils before entering streams, nitrate levels were reduced by as much as too percent. However, mineral soils located along the same streams exhibited little capacity to decrease nitrogen (Cooper t99o). The processes by which soils remove nitrates include denitrification, uptake by vegetation and soil microbes, and retention in riparian soils (Beare, Lowrance, and Meyer 1994; Evanylo 1994) Plants can take up large quantities of nitrogen as they produce roots, leaves, and stems. However, much of this is returned to the soil as plant materials decay. For exam- ple, scientists in Maryland estimated that deciduous riparian forests took up 69 pounds of nitrogen per acre annually, but returned 55 pounds (8o percent) each year in the litter (Peterjohn and Correll 1984). Nevertheless, Correll (1997) suggested that vegetative uptake is still a very important mechanism for removing nitrate from riparian systems because vegetation (especially trees) removes nitrates from deep in the ground, converts the nitrate to organic nitrogen in plant tissues, then deposits the plant materials on the surface of the ground where the nitrogen can be mineralized and denitrified by soil microbes. 37 Riparian areas can be important sinks for phosphorus but are generally less effective in removing phosphorus than sediment or nitrogen (Parsons et a1. 1994). Riparian stands remove 30 to 8o percent of phosphorus (Cooper et al. 1987; Lowrance et al. 1984; Peterjohn and Correll 1984). Some phosphorus may be taken up and used by vegetation and soil microbes, but like nitrogen, much of this phosphorus eventually is returned to the sod. For example, researchers estimated that less than 3 percent of the phosphate entering a floodplain forest in eastern North Carolina was taken up and converted to woody tissue, while scientists in Maryland reported a deciduous riparian forest buffer took up 8.8 pounds per acre per year of phosphorus but returned 7 pounds per acre per year (8o percent) as litter (Brinson, Bradshaw, and Kane, 1984; Peterjohn and Correll 1984). In some riparian areas, small amounts of phosphorus (0.05-2.14 pounds per acre per year) may be stored as peat (Walbridge and Struthers 1993). Riparian forests have been found to be effective filters for nutrients, including nitrogen, phosphorus, calcium, potassium, sulfur, and magnesium (Lowrance, Todd, and Asmussen, 1984; Lowrance et al. 1984). METALS Riparian areas may slow the movement of metals and other contaminants to surface waters and increase the opportunity for the contaminants to become buried in the sedi- ments, adsorbed into clays or organic matter, or transformed by microbial and chemical processes (Johnston et al. 1984). The fate of metals in riparian areas is not well under- stood. However, scientists in Virginia have found significant amounts of lead, chromium, copper, nickel, zinc, cadmium, and tin buried in the sediments in the floodplain along the Chickahominy River downstream of Richmond (Hupp, Woodside, and Yanoksy 1993). Analysis of the woody tissue of the trees revealed that these compounds also are taken up by the trees. Therefore, sediment deposition and uptake by woody vegetation may help mitigate heavy metals in riparian areas. PATHOGENS Pathogens, such as waterborne bacteria, viruses, and protozoa, are the source of many diseases that infect humans, livestock, and other animals (Chesters and Schierow 1985; Palmateer 1992). There is relatively little information on the role of riparian buffers on pathogens. In one study, strips of corn, oats, orchard grass, and sorghum/Sudan grass were all effective in reducing bacterial levels by nearly 70 percent (Young, Huntrods, and Anderson 198o). It was estimated that a buffer n8 feet wide would be required to reduce total coliform bacteria to levels acceptable for human recreational use (Young, Huntrods, and Anderson 198o). Other researchers have demonstrated the ability of grass sod filter strips to trap bacteria from dairy cow manure under laboratory conditions (Larsen et al. 1994). They found that even a narrow (two-foot) strip successfully removed 83 percent of the fecal coliform bacteria, while a seven-foot filter strip removed nearly 95 percent. PESTICIDES Few studies have been made to examine the fate of pesticides in riparian areas. However, where the proper conditions exist, riparian forest buffers have the potential to remove and detoxify pesticides in runoff. Probably the most important process is the breakdown of organic chemicals by soil microorganisms (MacKay 1992). For decades, scientists have observed that soil microorganisms adapt to the presence of a pesticide and begin to metabolize it as an energy source (Fausey et al. 1995). As it is metabolized, the pesticide is broken down to various intermediate compounds and, ultimately, carbon dioxide. In addition, most pesticides have a high affinity for clay and organic matter and may be removed from the soil water as they are bound to soil particles. Once bound, pesticides are often difficult to desorb from the soil (Clapp et al. 1995). 38 As these studies indicate, riparian forest buffers can reduce the amount of sediment, nutrients, and other contaminants that enter surface waters. However, the studies also suggest that these effects vary from one riparian area to another. The degree to which the riparian buffer protects water quality is a function of the area's hydrology, soils, and vege- tation. Riparian forests will have the greatest influence on water quality where field runoff follows direct, shallow flow paths from upland areas to the stream. Riparian forests will have less impact on water quality where surface runoff is concentrated and runs through the buffer in defined channels, or where deep subsurface flows cause groundwater to move below the roots of trees. One significant problem in urban areas is the lowering of the water table and, consequently, the level of base flow. VWith lowered water tables, the contaminants in water can pass below plant rooting zones and limit chemical uptake by planes. Riparian forests may not be able to provide all of the neces- sary functions in urban watersheds as a result of numerous channelized sources of runoff in urban watersheds. Therefore, other actions should be taken beyond buffer protection to minimize the effect of urban runoff. These actions would include the reduction of sur- face runoff, by reducing both the amount of impervious areas and the detention and reinfiltration of any surface runoff generated. SUMMARY OF EFFECTS OF PRESERVING FORESTS STANDS AND TREE COVER IN URBAN AREAS The preservation of forest stands in urban areas can lead to many environmental and economic effects related to air and water quality. The magnitude of these effects and val- ues will depend on the amount of forestland or tree cover conserved along with other factors, such as location of the stand relative to urban development or waterways. As much of the research related to urban forest effects on air and water quality is relatively new, the economic values of many of these effects are currently unknown but are very likely quite substantial. Though some values are estimated, there are likely numerous other secondary economic impacts due to cleaner air and water (e.g., increased tourism, business, and/or recreation) that are not accounted for in the value estimate. Continued research is needed on the economic valuation of many of these effects to quantify the economic impact of land conservation at varying scales and locations. The following for- est/tree effects related to air and water quality are known: sF Reduced Air Temperatures Effect: Through transpiration and shade, trees lower air temperatures and consequently lead to reduced pollution emission and formation, reduced summertime energy use of nearby buildings and consequent pollutant emissions from power plants, increased human comfort, and reduced thermal stress. Economic Value: Unknown. However, the cost of reducing a single part per billion of ozone through electric utility nitrogen oxides limitations is estimated at one-half to three-quarters of a billion dollars annually (U.S. EPA 1997). Thus, the economic impact of any temperature reduction effects on reduced pollution formation or emissions will likely be significant as the costs of reducing ozone precursor emissions through other techniques are large. c4 Pollution Removal Effect: Trees directly remove pollution in the atmosphere through interception of particles and uptake of gases through leaf stomata. Typical removal rates are on the order of i i grams per square meter of canopy cover per year (ozone. particulate matter less than io microns, sulfur and nitrogen dioxide, and carbon monoxide combined). 39 Economic Value: Average annual value per hectare of canopy cover is about $663 in Atlanta, 5447 in Boston, $482 in New York, and $527 in Philadelphia. VOC Emissions Effect: Although trees emit VOCs that can contribute to ozone formation, integrative studies are revealing that combined effects of trees tend to reduce ozone. In addition, conversion of forest stands to urban development will most likely increase total VOC emissions in the area due to the relatively high VOC $x~ emissions associated with urbanization. ` Economic Value: Unknown.. ~s tt Energy Conservation x Effect: Tree cover around buildings can reduce building energy use in summer through shade or reduced air temperatures. Tree cover can increase or decrease building energy use in winter depending on tree locations around a building due to tree effects of shade and blocking of winds. Alterations in energy use will affect pollutant emissions from power plants. 4 Economic Value: Savings to homeowners due to altered building energy use + from trees in Minneapolis is about $216,ooo per year (Nowak et al. 2oo6a) and h' . about $2.7 million per year in Washington, D.C. (Nowak et al. 20066). Monetary impact on air quality is unknown. `far: yt Reduced Runoff 'i- Effect: Trees can reduce runoff through the processes of rainfall interception, evapotranspiration, and increasing soil infiltration. The effects of trees can reduce and delay peak flows, reduce the need for stormwater treatment facilities, lp. and improve water quality. Economic Value: Likely in the millions of dollars per year for a city for the entire urban forest. at Improved Water Quality a Effect: Trees can improve water quality by reducing runoff and air pollution and, g ` in combination with the soil environment, by filtering, assimilating adsorbing, volatizing or degrading many chemicals in the water that flow through the t s s forest. Water quality related to sediments, nutrients, pathogens, pesticides, metals, and other contaminants in forested areas tends to be improved. 1 Economic Value: Damage to streams, lakes, and estuaries from nonpoint source u Q4 a pollution was estimated to be about 57 billion to $9 billion a year in the mid- kz 198os (Ribaudo 1986). Local effects in terms of stream quality and human ii health are likely substantial. e rn ° ~ r u ~ LF7 = x t 40 r REFERENCES Anderson, D. G. 1970. Effect of urban development on floods in northern Virginia. Water Supply Paper No. 2001C. Reston, VA: U.S. Geological Survey Argue, J. R 1994. Nen streetscapeforstornnvater management in Mediterranean-climate cities: The concept explored. Water Science and Technology Proceedings of the 17th Biennial Conference of the International Association on Water Quality, Budapest, July 24-30, 1994. Tarrytown, NY Pergamon Press, 23-32- Beach, D. 2002. 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Journal ofEmdromnental Quality 9: 483-487 47 Chapter 5 Competitiveness: Parks and Open Space as Factors Shapira a Location's Success in Attracting Companies, Labor Suppes, and Retirees JolinL.Crompton, TexasA&M University With relatively few exceptions, such as the location of military, academic, religious, or political establishments, economic growth is widely believed to be fostered primarily through the presence of businesses. Company start-ups, expansions, and relocations are widely viewed as direct and effective means of enhancing a community's economic devel- opment through expanding its existing tax base. This traditional view has been supplemented during the past decade by a recognition that attracting affluent retirees also offers a viable means of enhancing a community's tax base. Many believe the multiplier effect ensures that the benefits from a new business or from affluent retirees spread throughout a community and extend far beyond the actual dollar value of a firm's initial investment and subsequent payroll, or of retirees' direct spending. This chapter provides an overview of the role of parks and open space in attracting businesses and affluent retirees to a community ATTRACTING BUSINESSES Substantial shifts in American industry have occurred in recent decades with the change from traditional manufacturing to "smokeless" industries. Related to this has been a shift in emphasis from attracting new companies to accommodating the relocation and expan- sion needs of existing companies. This shift reflects "the mounting evidence that the vast majority of new jobs generated in the United States came from existing companies and new business start-ups" (Kotler, Haider, and Rein 199;). Many of the smokeless industries may be characterized as "footloose" because they arc likely to be less constrained and more flexible in their choice of location than tradi- tional manufacturing companies. They are not tied to raw materials, natural resources, or energy supplies, meaning that cities seeking ways to expand their tax base see them as excellent prospects for relocation. Footloose companies are particularly attractive to com- munities because they infuse money into a local economy without the adverse effects (e.g., pollution) often associated with traditional manufacturing industries. Their emerg- ing dominance has created a highly competitive environment among communities seek- ing to expand their tax base. Research has consistently shown that the elements that are important in location decisions for footloose companies are different from those considered to be important by manufacturing and distribution firms. The success of these businesses frequently is dependent on the caliber of their workforce. This is particularly true of those businesses in the intensely recruited high-technology, research-and-development, and company headquarters categories. Their principal assets are ideas and a skilled workforce, rather than their product inventories and capital equipment. These types of "people-intensive" businesses are information factories whose viability relies on their ability to attract and retain highly educated professional employees. Today, many such individuals make their decisions on where to work based on "the pursuit of happiness." This phrase of Jefferson's enshrined in the Declaration of Independence is now expressed as "quality of life." The deciding factor for many individ- uals in choosing where to work is often the quality of life in the geographic vicinity of the business. A vice-president of Dell Corporation in Austin, Texas, the country's largest computer supplier, observed: People working in high-tech companies are used to there being 49 a high quality of life in the metropolitan areas in which they live. When we at Dell go and recruit in those areas, we have to be able to demonstrate to them that the quality of life in Austin is at least comparable or they wont come. Its about what's the community like where I'm going to live (Crompton 1999). The importance of quality of life in business location decisions has been repeatedly verified in the literature. It is widely cited as being especially important for high-technol- ogy firms or businesses employing highly skilled workers in information or knowledge- based services. Twenty years ago a review of the company relocation literature (Blair and Premus 1987) concluded that the continued shift to more advanced technologies would lead to an increase in the importance of quality-of-life factors and a relative decrease in the sig- nificance of more traditional determinants. This trend continues to gather momentum. Richard Florida's (aooz) discussion of this issue in his book The Rise of the Creative Class captured the essence of contemporary thinking in how communities should approach economic development. He reported that whereas economic growth often used to come at the expense of environmental quality, in the "new economy" envi- ronmental quality is a prerequisite for attracting talented workers. Florida reported that environmental quality ranked as the most important amenity in high-technology work- ers' choices of location, above housing cost of living and good schools. He classified all the important factors in the location decisions of "creative class" individuals into a cate- gory he termed "quality of place." He suggested that this category has three dimensions. The first was "what's there: the combination of the built environment and the natural environment; a proper setting for the pursuit of creative lives." The other two dimen- sions were "what's there" and "what's going on." There is substantial economic literature reporting the need for "disamenity compen- sation," whereby companies in jurisdictions with a less favorable quality of life have to pay higher salaries in order to attract the same quality worker and vice versa. The overall implication is that firms can reduce the salary levels needed to secure adequate labor (or secure more and better workers at the same price) if they locate in an area whose quality of life is attractive to workers. Quality of life is not only important in relocation, expan- sion, or initiation decisions, it is also important in employee retention, which has an eco- nomic bottom line-it is expensive to go through the recruitment process, particularly for key personnel. No matter how quality of life is defined, park and recreational opportunities arc like- ly to be a major component of it. There are no great cities in North America or else- where in the world that do not have great park and open space amenities. Great is defined not in terms of size, but in terms of people's desire to live there. Great park and open space amenities are synonymous with great cities. The importance of park and open space amenities was reported in a study of key decision makers (Crompton, Love, and Moore 1997) from 174 businesses that had relo- cated, expanded, or been launched in Colorado in the previous five years. Small-business decision makers were influenced particularly strongly because they reported that quality of life was their main reason for relocating there. Among six elements that were used to measure quality of life, these small-business decision makers ranked the element of park, recreation, and open space amenities as being most important. They located their busi- nesses where they could enjoy a preferred lifestyle. This finding is especially salient because analysts constantly reiterate that future growth in the U.S. economy is likely to come primarily from small businesses. It has been noted that many small companies set profit goals for themselves that are not optimum but are merely "good enough." They could earn perhaps higher profits, if 49 they located elsewhere, but this would involve adverse trade-offs for employees and own- ers in their quality of life. Hence, they "satisfice"; that is, they accept a somewhat lower level of remuneration. The profound influence that park and open space amenities have on people's pre- ferred living locations can be illustrated by a simple exercise that the author has under- taken with literally hundreds of different groups. First, all members of the group are asked to write down the place where they would like to five given their druthers (i.e., their preferred place, ignoring pragmatic concerns, such as job, family, language, and her- itage). After they complete this task, they write in one sentence why they picked that place. When responses to this second task are analyzed, results are invariably similar. More than 8o percent of participants will cite some dimension of park, open space, or ambience in their responses. For many people, once they attain a threshold level of income, improvements in quality of lifestyle become more important than increases in salary. For example, a $15,00o raise in salary may not be sufficient to persuade a professional who has strong social networks in Place A. where he or she earns $70,000 with a company to move to a similar company in Place B if the location offers similar lifestyle opportunities. However, the same individual may be enticed to move from the company in Place A to a similar company in Place C for a $5,000 salary increase if Place C offers superior lifestyle oppor- tunities. Because park and open space amenities are important lifestyle elements to many, it is not surprising that many company representatives recognize them as being impor- tant in attracting and retaining professional and executive employees. Strategic economic development involves `designing a community to satisfy the needs of its stakeholders if small business constitutes the engine of the job generation process, then places should promote those things that facilitate small business growth" (Kotler, Haider, and Rein 1993). Historically, most jurisdictions have been custodially driven rather than benefit driven in their efforts to persuade companies to locate in their communities; they have focused on selling their community as it is, rather than on adapt- ing the community to meet the benefits that relocating companies seek. This approach markedly contrasts with how most viable organizations now operate. In communities seeking to attract footloose companies, especially small businesses, part of a benefit-driv- en approach is likely to involve investing in park and open space amenities. Reliance on substantial tax and cash incentives to attract businesses is risky because these incentives arc transient If a community is not an engaging place in which to live, companies are likely to continue looking for the next set of cash and tax incentives and will move on when they are offered. If a community's amenities are of a high standard, it is less susceptible to such "abandonment" Thus, a strong case can be made that reliance on incentives should be replaced by an alternative strategy that commits to designing a community so that it satisfies the needs of its key constituents (figure 5.1). Advocates of this approach suggest that communities succeed in becoming viable "when stakeholders such as citizens, workers, and business firms derive satisfaction from their community, and when visitors, new businesses, and investors find their expectations met (Kotler, Haider, and Rein 1993). 50 Figure 5.1. Iowa Strategic Planners Have an Opportunity to Make People the Priority The Governor's Strategic Planning Council took to the airwaves Monday evening for a statewide town meeting to gather ideas about what Iowans want their state to be like in 2010. It was a valuable exercise that was as interesting for what participants didn't say as what they did. Generally, the comments focused on the need for better education, for keeping young people in the state, for making Iowa more welcoming to newcomers, for a cleaner environment and more cultural and recreational opportunities. Most of the com- ments could be lumped under a general category of improving the quality of life in Iowa. Notably missing from the comments-at least from those that made it onto the air- was significant mention of"improving the business climate." Perhaps thafs because we've been down that road before, and it led nowhere. For the last couple of decades, Iowa policy-making has been fixated on improving the business climate. The focus was on incentives to businesses, selective tax cuts for industry, and boasting about Iowa's modest wages and mostly non-union work force. The think- ing was that if business could be induced to bring jobs to Iowa, everything else would fall into place. But it didn't. In almost every measure of economic gain, Iowa is near the bottom among the 5o states. Even among our Midwestern neighbors, Iowa has been bringing up the rear in income and population growth. Meanwhile, a stagnant Iowa could look around and take note that growth occurring elsewhere wasn't necessarily happening in the states with the most favorable business cli- mates. It was in states that are perceived to have the highest quality of life. jobs are flow- ing to regions in which people find it desirable to live. Iowa bet on the wrong strategy, and lost. The comments heard by the Governor's Strategic Planning Council might be an indi- cation that Iowans sense the need to change strategies. Things such as parks, recreation, cultural attractions, scenic preservation, strengthening community, cleaner water and air, and other enhancements to the quality of life, no longer can be assigned a secondary pri- ority in Iowa. The quality of life must be the first priority. Iowa must be an inviting state not just to business, but to people. Especially to people. Sourcr. Lead editorial, Des Moines Register, October 27, 1999. ATTRACTING RETIREES It has been observed: "There is a new clean growth industry in America today-the industry is retirement migration" (Longino 1995). The appeal of retirees to communities stems from their potential for stimulating local economies. If Too retired households conic to a community in a year, each with a retirement income of $40,000, their impact is similar to that of a new business spending S4 million annually in the community. From the perspective of economic development investments, targeting resources at recruiting retirees rather than exclusively at corporations has at least two major advan- tages. First, retirees do not require the economic incentive packages that comprise such elements as tax abatements, low-interest loans, subsidized worker training programs, and infrastructure improvements, which are often standard prerequisites to a corporate relo- cation. Second, capital improvements made as part of a retiree recruitment effort are likely to focus on such quality of life issues as recreational opportunities, beautification, ambience, or support services, which will also benefit existing residents. In contrast, cap- ital investments targeted at recruiting corporations involve large outlays for such things as developing industrial business parks, access roads, and utilities. Local residents are likely to receive relatively little direct benefit from these facilities. Hence, the risk associ- 51 ated with recruiting corporations is higher because, if the corporate strategy fails, the community receives a much poorer return on its investment than if the strategy of attracting retirees fails. Some communities believe that retiree relocations are more desirable than business relocations. Social Security and private pension benefits of retirees are stable so their incomes are steady and not subject to the vicissitudes of economic business cycles. This income comes from outside the community, but retirees spend it locally so it stimulates the economy and generates jobs. Retirees not only increase the tax base, they tend to be positive taxpayers: that is, they characteristically use fewer services than they pay for Figure 5.1. Intrastate Migrants 6o and Over Receiving Social Security or Retirement Income, 1995-2000 Inmigrants Outmigrants Net Inmigrants "WINNERS" 1. Florida 354.104 10,831 111,173 1. Arizona 114.104 43.555 71.549 3. North Carolina 64.540 33.733 30.807 4. Nevada 50,017 11,390 18,617 5. Texas 85,477 59,634 15.843 6. South Carolina 38,718 10,036 18,681 7 Georgia 50,655 31.131 18,513 "LOSERS" i. New York 47700 163,189 -115,547 2. Illinois 35,603 83,977 -48.374 3. California 115,616 146.893 -31.177 4. New Jersey 46,089 76,689 -30,600 5. Michigan 31.776 57.157 -25381 6. Ohio 38.303 58.656 -20.353 Source: US. Census Bureau, Population Division (1003). through taxes. For example, they pay taxes to school districts but do not send children there. Migrating retirees are not likely to strain social services, health care services, the local criminal justice system, or the natural environment since they arc likely to be rela- tively affluent, but they are likely to transfer significant assets into local investment and banking institutions. These assets expand the local deposit base that can be used for commercial and industrial financing. Retirees also provide the community with a pool of volunteers. They tend to be substantial contributors to, and active in, churches and local philanthropic and service organizations. Most retirees do age in place or remain in the same area where they spent much of their lives. Between 1995 and 1000, however, almost 1.8 million Americans aged 6o and 51 over who were receiving either Social Security or retirement income changed their state of residence. The states that were "winners" and "losers" in this movement are shown in figure 5.2. These data reinforce the conventional wisdom that Sun Belt states are the primary beneficiaries while northern states are the primary losers. However, the cases of California, Florida, and Texas, all traditionally viewed as Sun Belt states, indicate that more than climate is involved. California, despite attracting the second-highest number of immigrants, is a net loser. At least part of this may be attributable to the extraordinary cost of real estate in California, which encourages retirees to cash in their equity to pur- chase a much less expensive house elsewhere in the United States and to raise the quality of their retirement lifestyle. Florida, while retaining its traditional position as the leading destination for retirees, was ranked second to New York in the number of outmigrants. Similarly, Texas ranked sixth among the states in number of outmigrants. Extensive empirical evidence has been reported regarding the propensity of younger, affluent retirees to migrate to areas rich in amenities, and recreational opportunities are prominent among the amenities sought. The central role of recreational opportunities in attracting retirees is consistently reiterated. Among many who have recently retired, there is a desire to initiate a lifestyle change to a more recreation-oriented way of life. These retirees have an image of how they want to live in retirement and seek environ- ments that facilitate that lifestyle. These sentiments are exemplified by the growing number of specialist retirement settlements, such as the Sun City and Leisure World communities, that have emerged in various parts of the country. Such communities invariably emphasize in their promotion the ambience created by open space and the array of opportunities they provide for engaging in recreational opportunities. Members of this mobile retiree cohort have been termed GRAM PI ES (Van der Merwe 1987). The acronym is derived from the first letter of key words in the following statement: There are growing numbers of retirees who are active monied people in excel- lent shape. While park and open space amenities are a key ingredient in enticing relatively afflu- ent retires to immigrate to a community, the converse of this also is likely to apply That is, communities may lose their GRAM PIES if they fail to provide a comprehensive set of recreation opportunities comparable to those in other locations. This finding was reported in a study of 270 individuals who had retired and migrat- ed to permanently reside in the Texas Lower Rio Grande Valley area within the previous year (Haigood and Crompton 1998). These respondents were presented with 26 items known to potentially "push" people into migrating to another location from their resi- dent community upon retirement. The two items on the list that referred to recreation were ranked second (desire to live a more recreationally enjoyable area) and third (desire to live in a place where recreation opportunities are plentiful) in importance, behind desire to get away from cold weather This suggests that wealthy retirees are likely to con- sider moving from communities that fail to provide a comprehensive set of park and recreation opportunities. Data from this study suggest that communities that fail to pro- vide a high number of park and recreation opportunities for retirees are likely to have their tax base eroded by the loss of economic spending power when some of their more affluent retirees leave the community. There is a strong social element in recreation. Indeed, a primary purpose of partici- pating in park and recreation activities for many people is to facilitate socialization. Thus, encouraging retirees to stay in their home environment where there are extensive existing social networks should be easier for communities than recruiting to the area new retirees who face the formidable challenge of creating new social networks. Thus, if excellent park and recreation opportunities are available in the home environment, one of the primary reasons that retirees leave an area will disappear. 53 REFERENCES Blair, J. P. and R. Premus. 1987 Major factors in industrial location: A review. Economic DevelopnWntQuarter1Y 1: 72-85. Crompton, J. L. 1999. Strategic options available to the Trust for Public Land in Texts, 20oo-2oo4. San Francisco: The Trust for Public Land. Crompton, J. L., L. L. Love, and T. A. Moore. 1997. Characteristics of companies that considered recreation open space to be important in (re)location decisions. Journal of Park and Recreation Administration 15 (1): 37-58. Florida, R. 2002. The rise ofthecreative class. New York Basic Books. Haigood, T. L., and Crompton, J. L. 1998. The role of recreation amenities in retiree relocation decisions. Journal of Park and Recreation Administration 1(, (1): 25-45 Kotler, P., D. H. Haider, and I. Rein. 1993. Marketing places. New York: Free Press. Longino, C. F., Jr. 1995. Retirement migration in America. Houston, TX: Vacation Publications. U.S. Census Bureau, Population Division. 2003. Country to country immigmncn fIoNK. Washington, DC: U.S. Census Bureau. Van der Merwe, S. 1987 GRAM PIES: A new breed of consumers comes of age. Business Horizons (November-December): 14-19. 54 Conservation Easements: The Good, the Bad, and the Ugly http://www.nationalcenter.orgfNPA569.htnd National PPolicy# A Publication of The National Center for Public Policy Research # 569 May 2008 Conservation Easements: The Good, the Bad, and the Ugly by Dana Joel Gattuso Introduction Conservation easements, as we know them today, are a fairly recent approach to land conservation. As government acquisitions and regulatory restrictions on land use have become prohibitively invasive, costly, and ineffective, governments have looked to conservation easements as a potentially effective and less expensive conservation method than government ownership and/or regulation. Use of conservation easements began to gain steam by the 1980s and by the 1990s, exploded on the scene. Initially, conservation easements - which allow landowners to hold on to and use their property but permanently remove development rights in exchange for tax benefits - seemed to hold some promise as an unintrusive, effective means of preserving open space while upholding private stewardship, private initiative and the rights of private property owners. Land trusts, the organizations that manage the easements, tended originally to be small, nonpolitical, and independent of government involvement. Over time, however, as numerous land trusts have grown in size and number, so have their association - and influence - with government. This has been the case particularly with the large, national organizations that obtain enormous sums from federal funding. For many of these land trusts, what used to be a close working relationship with private landowners has been replaced by a closer relationship with government agencies. Increasingly too, the mission has evolved from protecting open lands through private stewardship to aiding government agencies in acquiring private lands. In these troubling arrangements, land trusts have operated more like government agents, acquiring easements from private landowners, only to turn around and quietly sell them - sometimes for a profit - to state or federal governments. These methods certainly are not practiced by all land trusts, but nor are they isolated cases. Given the rapid growth in land trusts and the rising use of conservation easements over the past decade, along with increasing involvement with government in the arrangements, easements could become a far-reaching means for public land acquisition. That is, easements, absent reforms, could evolve into the prevailing method for government to shift lands unobtrusively from private to public control under a pretense of private stewardship. Other problems too have evolved. Federal tax incentives for conservation easements 1 of 22 1/24/2014 5:00 PM Conservation Easements: The Good, the Bad, and the Ugly http://www.nationalcenter.orgfNPA569.html require landowners to encumber their land in perpetuity. While the permanency may hold appeal to those property owners who see value in shielding their land from developers forever, particularly when sweetened with a significant tax deduction, it could prove to be detrimental to the public over the long-term as economic and ecological factors change our definitions of what should be preserved and why. Because conservation easements essentially are a contract between two people - the grantor and the grantee - one of the promising aspects of easements has always been their flexibility and adaptability, compared to government ownership and regulations. Perpetuity requirements run counter to flexibility and necessary change. The tax incentives themselves also are problematic, developing into what some critics call a "tax haven" and "tax bonanza" for the wealthy landowner. Although the tax benefits were intended to aid the land-rich, cash-poor farmer or small business, struggling because of exorbitant property and estate taxes to hold on to their land, the federal tax benefits disproportionately favor wealthy landowners. This report examines these issues, addressing 1) conservation easements' evolution from a promising approach aimed at protecting land through private ownership to a questionable arrangement that shifts private lands to government control; 2) the costly and potentially detrimental impact of perpetual deeds; and 3) the manipulative use of the tax code. Policy reforms can change conservation easements as we know them today, returning control of land to property owners while removing existing disincentives to land preservation. Among these are: * Preventing government takeover of land through land trusts' acquisition of conservation easements. * Phasing out government funding of land trusts. * Changing the tax code to allow for fixed-term, rather than perpetual, conservation easements. * Eliminating estate taxes, which encourage property owners to sell their land to developers. Background on Conservation Easements A conservation easement' is a legally-binding agreement between a property owner and a nonprofit organization - typically a land trust - or a government agency2 that restricts development on the land covered by the easement, usually in exchange for tax benefits for the property owner.3 The property owner who donates or sells the easement - called the "grantor" - retains partial ownership rights over the land but relinquishes rights to use the property for development.4 The organization to receive or buy the easement - called the grantee - holds interest in the property and enforces the restrictions. Property owners typically are motivated to place their land in a conservation easement by deductions from federal and state taxes, by a desire to shield their property from development ,5 or by the threat of government land-acquisition or land-use regulations.6 To receive tax benefits, landowners must agree to allow the land to be used for one of the following: outdoor recreation for the general public; protection of animals, plants or ecosystems; preservation of open spaces - for either farming, forestry, or ranching? - or for scenic enjoyment for the general public; or the preservation of historic land or structures.8 They also must donate the easement to a government agency or a "qualified" nonprofit 2 of 22 1/24/2014 5:00 PM Conservation Easements: The Good, the Bad, and the Ugly ht4p://www.nationalcenter.orgfNPA569.htm] organization, defined as a charitable organization "that receives a substantial portion of [its] support from the public and government entities."9 And they must agree that the easement will be held in perpetuity, meaning all future landowners of the easement are bound by the terms of the deed. The intended purpose of the easement is to preserve the land for the benefit of the general public.10 Birth, Growth, and Boom of the Conservation Easement The earliest "conservation easement" of its kind dates back to 1891. The first private land trust, the Trustees of Reservations in Massachusetts, was formed to purchase and maintain public parkways, designed by landscape architect Frederick Law Olmsted, throughout the city of Boston. Conservation easements were not used again until the 1930s and 1940s, when the National Park Service bought parcels of land for scenic use along what are now the Blue Ridge Parkway and the Natchez Trace Parkway." This was the first instance in which a government entity managed land that wasn't via fee simple ownership of the entire property.12 However, these "scenic easements" differed largely from today's conservation easements in that they were primarily intended for public access and enjoyment of parks and vistas.18 Conservation easements as we know them today - designed to curb development - did not evolve for a few more decades. Washington and states bolster the easement "movement." In 1964, the Internal Revenue Service authorized the first rule allowing charitable income tax deductions to landowners who donated property for scenic easements adjacent to federal highways. A year later, as part of the Federal Highway Beautification Act, Congress required states to spend 3 percent of federal highway funds on landscapes and beautification along the highways as a condition of renewed federal funding.14 The requirement spurred states to enact enabling legislation for conservation easements.15 Today, all 50 states and the District of Columbia have enacted enabling legislation.16 Generally, the states followed the provisions of the Uniform Conservation Easement Act (UCEA), a non-binding, national blueprint for state legislation. The legislative template was drafted in 1981 by the National Conference of Commissioners on Uniform State Laws, a nongovernmental body that provides model legislation for states. The act recommended that states enact enabling legislation to address any existing impediments to traditional common law (discussed later in this paper). The draft also included model language stipulating conservation purposes of an easement, restrictions on which organizations are entitled to hold easements, and provisions allowing a "third party" to enforce an easement's requirements.17 During this time, Congress provided incentives to landowners by codifying the IRS' ruling, providing a charitable tax deduction off federal income taxes to donors of conservation easements. As Washington and the states took steps providing incentives and statutory authority, the use of conservation easements gradually advanced. By the 1980s, the easements were used routinely; by the 1990s, they exploded on the scene. The surge in /and trusts and conservation easements. The graph below shows the dramatic increase in the number of land trusts since 1950, particularly the last five years data is available, where the numbers rose from 1,263 in 2000 to 1,667 in 2005. 3 of 22 1/24/2014 5:00 PM Conservation Easements: The Good, the Bad, and the Ugly ht4p://www.nationalcenter.org/NPA569.htm] Growth in Number of Land Trusts 1800 to 1600 11 ~ 7 1400 ~ 1200 1263 'C 095 M 1000 J C 800 d 600 ~ 479 400 - 8 Z 200 32 0 1950 1965 1975 1980 1985 1990 1995 2000 2005 Year Sources: Land Trust Alliance and Nancy A. McLaughlin18 Collectively, land trusts control 37 million acres of land throughout the United States.19 At least nine million acres of this amount is believed to be held in conservation easements, though the precise amount is not well documented.20 As the following graph illustrates, the rise in the use of conservation easements has paralleled the growth of the land trust movement. 4 of 22 1/24/2014 5:00 PM Conservation Easements: The Good, the Bad, and the Ugly http://www.nationalcenter.org/NPA569.html Growth In Number of Easements 7000 46 -a 6000 a~ M N 5000 0 U) 4000 0 U) W O 3000 4) 2 515 v 2000 Q 1000 128 290 1 740 0 - 1950 1965 1975 1980 1985 1990 1995 2000 2005 Year Sources: Land Trust Alliance and Nancy A. McLaughlin2' Most of the controlled land is managed by large, national environmental organizations, such as The Nature Conservancy, The Trust for Public Land, Ducks Unlimited, American Farmland Trust and The Conservation Fund. Together, they hold 25 million acres of land. The largest of these is The Nature Conservancy (TNC) which controls 15 million acres. Over three million acres is held in conservation easements by TNC, a fivefold increase since 1997, when the land trust held 645,000.22 The nation's 1,663 local, state and regional land trusts control 12 million acres of private lands. Approximately half that amount - 6.2 million acres - is from conservation easements, up from 2.5 million acres in 2000.23 5 of 22 1/24/2014 5:00 PM Conservation Easements: The Good, the Bad, and the Ugly http://www.nationalcenter.org/NPA569.html Acres Controlled by Land Trusts (In Millions) MNational Land Trusts ■ Local, State & Regional Land Trusts Explanations for easement zeal. The rapid growth and popularity of conservation easements as a conservation tool is partly a response to exorbitant costs of government regulations on land use and zoning laws. It is also an outgrowth of gradual public disapproval over the economic burdens that government "command and control" land use policies place on landowners.24 Many property rights advocates also argue the threat of land use regulations and federal land-grabs can act as an incentive for conservation easements, driving landowners to sell or donate a conservation easement to avoid the burden of a threatened regulation. Faced with the choice of government seizing your land or encumbering your land with a conservation easement, most landowners would, even if grudgingly, opt for the latter.25 Conservation easements' growing use is also a factor of the overwhelming rise in number and influence of land trusts in the United States.26 As the number of land trusts has risen, so has land trusts' choice for conservation easements over fee simple ownership as a conservation tool. Rising costs of purchasing land for conservation - reflecting the opportunity costs of leaving land dormant rather than developed - have made easements a more affordable and practical approach.27 Finally, the recent conservation easement phenomenon is due to a growing interest among property owners. Some researchers suggest landowners are driven to donate land for easements largely through their love of their land and their desire to keep it protected from development, both in the present and long after they are gone.28 Others believe tax relief is the driving force.29 Tax Incentives There are two forms of federal tax benefits available to donors: 1. Federal income tax deduction Because donated conservation easements are considered a charitable donation under the federal tax code, property owners can deduct the value of the easement, defined as the difference between the value of the land just before the easement is granted and the value of the land immediately after the donation. In August 2006, President Bush signed the revised 6 of 22 1/24/2014 5:00 PM Conservation Easements: The Good, the Bad, and the Ugly http://www.nationalcenter.orgfNPA569.htmi Pension Protection Act, which raised the maximum federal tax deduction for conservation easements from a maximum of 30 percent of adjusted gross income to 100 percent for farmers and ranchers, and to 50 percent for non-farmers.30 The increase expired at the end of December 2007, but a provision now pending in the Food and Energy Security Act of 2007 (the "farm bill") would extend the tax deductions for two more years.31 2. Federal estate tax deduction Relief from estate taxes is the most significant tax benefit for landowners granting conservation easements, particularly those who inherit sizable estates. In 1997, Congress passed estate tax relief legislation for conservation easement grantors. The purpose was to encourage property owners to hold on to property they might otherwise want to sell to land developers to offset debilitating estate tax burdens. The tax provisions allow the grantor to deduct the value of the easement from the fair market value of the deceased's estate. The donor also may deduct up to 40 percent of the value of the estate at the time the owner passes away.32 Most states also provide some form of tax incentive for conservation easements: 1. State income tax credits Twelve states provide tax credits, though most are not as substantial as the federal income tax benefit. The most significant tax incentives are provided by Colorado and Virginia, which allow grantors to sell partial or full amounts of their credit to other taxpayers in the state.33 2. Property tax relief At least 17 states also provide property tax incentives, allowing donors to deduct the value of the easement from the assessed value of the property.34 Achievements of Conservation Easements Many commentators argue that conservation easements' potential strength in preserving land is their approach as an alternative to government land acquisitions and land use regulations.35 Private land trusts, working closely with property owners to preserve the land through easements, have been known to be more effective stewards than government, and numerous studies bear this out.36 For one reason, land trusts are more flexible than government and more in tune with the needs of the community. Land trusts "promote a level of innovation and experimentation in private land conservation efforts that typically is not found in government controlled land conservation programs."37 Furthermore, easements - when arranged on a purely voluntary and private basis, absent government involvement - can harness "the forces of self-interest to encourage the efficient use of resources," as University of Virginia law professor Julia Mahoney writes, "rather than by using the power of the state to coerce individuals and institutions."38 In fact, the oldest land trust in the United States was created as a response to what even then was regarded as the failure of government's management of public lands. The Trustees of Reservations in Massachusetts was established in 1891 by landscape architect Charles Eliot, a prot6g6 of Frederick Law Olmsted, to manage lands through private means. Eliot's goal was to preserve small, tax-free parcels of scenic and historic lands in and around Boston for public enjoyment through private stewardship and voluntary means. Among the objectives was "to act for the benefit of the whole people, and without regard to the principal cause of the ineffectiveness of present methods, 7 of 22 1/24/2014 5:00 PM Conservation Easements: The Good, the Bad, and the Ugly http://www.nationalcenter.orgfNPA569.htmi namely the local jealousies felt by townships and the parts of townships towards each other."39 The scenic easements managed by the National Park Service in the 1930s and 1940s ended in failure only a few decades later. State agents, given the charge from the Park Service to acquire property from private landowners for the Blue Ridge and Natchez Trace parkway easements, failed to explain to landowners what rights they were giving up. As law professor Roger Cunningham writes in 1968, they were "concerned only with getting the landowner's signature on the easement deed."40 Nor were any appraisal standards applied. Landowners were paid drastically different sums from other donors giving similar land for scenic easements. Cunningham: "As a result, friction between the National Park Service and the... landowners increased; the number of violations steadily increased; and the cost of policing the scenic restrictions became substantial."41 The problems and "numerous... conflicts that generated a mistrust of the use of scenic conservation easements by government agencies"42 forced the federal government to end its purchase of easements for the parkways at this time. It was government's failure at managing scenic conservation easements, as well as its record on costly fee simple ownership, that gave birth and nurture to the private land trust. While the voluntary arrangements of the Trustees of Reservations differed considerably from today's conservation easements, it nonetheless set the stage for preserving parcels of land through private rather than public means. Today, the Trustees of Reservations manages 25,000 acres of land throughout Massachusetts, 14,000 of which is held in conservation easements.43 The organization has served for decades as a model to other private land trusts on how to preserve lands through private incentives, voluntary private property interests, and private stewardship.44 One such example is the Sand County Foundation, located in Wisconsin. The foundation dates back to 1965 and was established to preserve 120 acres of land located on the Wisconsin River floodplain, acquired by the 20th century ecologist and writer Aldo Leopold. The foundation's founders wanted to utilize the approach espoused by Leopold, namely to protect property through "a conviction of individual responsibility to the land."45 The founders sought the commitment from neighboring landowners to preserve the land and adjacent properties to commemorate Leopold and his "land ethic" on individual responsibility. Today, the foundation works with surrounding property owners to manage and conduct scientific research on 1,800 acres of private lands.46 Another example is the Montana Land Reliance in Bitterroot Valley, which protects land for agriculture use, fish and wildlife habitat, and open space. Holding more than 515 easements on 500,000 acres, the organization is the largest state-based land trust in the nation. Among its accomplishments are protecting elk, deer, and bears along the Madison River Valley adjacent to Yellowstone National Park. The land trust ensures easements remain in private control, maintaining that "private landowners make the best decisions for their land, given the right incentives."47 Unfortunately, however, over time the focus of many land trusts has changed, and many of them - particularly the large national organizations - have developed suspect relationships with the government. In some cases, land trusts are aiding government agencies in obtaining private lands via conservation easements. Problems with Conservation Easements Stewards of Land or Stewards of Government? Any chance conservation easements have in being effective stewards of land is lost when land trusts cease to work as independent, private organizations obtaining 8 of 22 1/24/2014 5:00 PM Conservation Easements: The Good, the Bad, and the Ugly ht4p://www.nationalcenter.orgfNPA569.html easements through purely voluntary means and become agents of government aiding in public land acquisitions. Yet land trusts, particularly the larger organizations, are changing their focus from independent and private approaches to working in tandem with government agencies in an effort to assist government in obtaining private lands. In fact, many leaders in the land trust movement are articulating a new mission to pick up where government has failed at public ownership. As former president lean Hocker of the Land Trust Alliance (the membership organization representing land trusts throughout the nation) observed, land trusts have a niche as a result of a "reluctance to regulate private lands or even to add land in public ownership." And the "lack of a bureaucratic constraint makes land trusts exceedingly good at complementing, supplementing, and implementing public open-space agendas."48 Prearranged "flip." In increasing practice, land trusts do not hold on to the easement but turn around and sell it to federal or state government agencies, known as a "prearranged flip" or "preacquisition." Because most easements are purchased by land trusts at below market value, land trusts can then sell the property to the government at market value, profiting off the difference. In one example, the Nature Conservancy bought an easement for $1.26 million, then directly sold it to the Bureau of Land Management for $1.4 million.49 Land trusts benefit because they can earn a profit off the taxpayer-funded arrangement. Government agencies like the arrangements because, unlike seizing private lands through land use regulations, zoning laws, or even eminent domain, they can obtain private property via methods shielded from public scrutiny. Preacquisitions also enable government to obtain private land when public funds are not yet readily available.50 As a report on easements by the Department of Agriculture notes, "voluntary acquisitions" provide "opportunities for public agencies to influence resource use without incurring the political costs of regulation or the full financial costs of outright land acquisition."51 Preacquisitions change the whole nature, intent, and potential benefits of conservation easements to protect lands through private stewardship. As referenced earlier in this report, studies show that unequivocally easements work better when managed by land trusts than by government entities. Easements become not a means of protecting lands through a private sector partnership between landowner and land trust, but a non-transparent tool for government to obtain private property without public knowledge or approval. As Clemson University economics professor Bruce Yandle writes: Such programs encourage land trusts to serve as government land agents, often quite profitably. If land trusts continue to respond to this temptation, land conservation will become ever more political... History teaches us that market incentives for conservation are strongest when individuals pay market prices and receive market rewards. They are weakest when government agents spend someone else's money and get no reward for good management.52 While documentation is limited showing precisely how much land under conservation easement is transferred to government, anecdotal information indicates the practice is prevalent. An article published by the American Enterprise reports that more than two-thirds of the Nature Conservancy's operating budget goes to purchasing private lands that are then sold to the government.53 Similarly, the national American Farmland Trust has worked closely with federal and state government agencies for years, leveraging tax dollars to turn private property into public land via the conservation easement. A book on land conservation "public-private partnerships," published in 1993, describes such an arrangement with the state of Massachusetts: Massachusetts has a strong tradition of private land conservation... Thus, it did not take much to convince the state agriculture department that a 9 of 22 1/24/2014 5:00 PM Conservation Easements: The Good, the Bad, and the Ugly http://www.nationalcenter.orgfNPA569.htm] partnership with land trusts could enable it to save more Pioneer Valley farms than could the government acting alone. The department encouraged AFT [the American Farmland Trust] and other land trusts to acquire conservation easements over key parcels of valley farmland for subsequent resale to the state.54 The practice is also common among some state land trusts. The Maine Coast Heritage Trust, the state's largest land trust along the coast, has sold more than 700 of its 850 easements and acquisitions to federal and state agencies. As described in the Gulf of Maine Times: One of [the land trust's] partners, the U.S. Fish and Wildlife Service (USFWS), identifies important habitats for migratory and endangered fish and wildlife. The trust works with the owners of these areas to determine if there is an opportunity to protect that habitat. If there is, the trust takes a lead role in acquiring the land on behalf of either USFWS or the Maine Department of Inland Fisheries and Wildlife,55 In some cases, the federal government uses partnerships with conservation groups to skirt existing state laws that limit the terms of an easement. A report released last September by the Government Accountability Office describes how the U.S. Fish and Wildlife Service has partnered with Ducks Unlimited to obtain thousands of acres of easements from private landowners in North Dakota. The state forbids the term of an easement acquired by a conservation group to exceed 99 years.56 But according to officials from the Service, they are "not bound by state law regarding the easement terms." If the agency "receives a monetary donation from Ducks Unlimited to purchase easements, the eased land is protected in perpetuity," a direct violation of the state's intent.57 Federal funding. Also indicative of the close "partnerships" many land trusts have with government is the amount of public funding land trusts receive, with The Nature Conservancy (TNC) collecting by far the largest amount of federal funds. The American Farmland Trust and The Conservation Fund take in a million and three million dollars annually in federal grants, respectively, while TNC receives an alarming sum exceeding one hundred million dollars. Moreover, revenues earned by TNC from sales of conservation easements to governments "and others" amounts to another $262 million annually, 20 percent of TNC's support and revenues.58 Federal financing of conservation easements comes from numerous sources and programs, and it is difficult to find documentation showing the actual sum. However, it is clear that support has skyrocketed over the past decade. The two largest programs funding easements are the Forest Legacy Program and the Farm and Ranch Lands Protection Program, both operating under the U.S. Department of Agriculture. Funding for the Forest Legacy Program has ballooned from $2.6 million in fiscal year 1997 to over $80 million in fiscal 2007.59 The increase in the Farm and Ranch Lands Protection Program is even more dramatic, rising almost tenfold, from $62 million for 1996-2001 to $597 million for 2002-2007.60 Given the vast sums of federal dollars handed to many land trusts, along with the prearranged transfers of land from private hands to government acquisition, it is hard to imagine not only how land trusts can operate effectively as stewards of land, but also how they can operate independent of political pressures and influence. Perpetual Conservation Easements: Forever Is a Long Time Another problematic aspect of conservation easements is the requirement that the easement be held in perpetuity in order for the grantor to receive federal tax benefits.61 10 of 22 1/24/2014 5:00 PM Conservation Easements: The Good, the Bad, and the Ugly http://www.nationalcenter.org/NPA569.httnl Such restrictions have ecological and economic implications to the public interest - the intended beneficiary of conservation easements - that extend far into the future. Furthermore, it is not fully clear how future courts will rule on the "dead-hand" control over private property. Changes in science and nature could deem perpetual easements useless or harmful. As numerous legal scholars and policy experts have argued, conservation easements that bind landowners and their descendants in perpetuity ultimately become antiquated and, therefore, useless or even harmful. The rule fails to recognize that conservation needs - as well as definitions of scenic, aesthetic and cultural62 - change over time, and that the easement may eventually lose any ecological benefit or even become a detriment. Gains in scientific knowledge can change our definition of what is ecologically beneficial. For example, we know from scientific advances in forest management that thinning techniques are essential to protecting healthy forests and their habitat and preventing forest fires.63 Yet conservation easement requirements with the specific purpose of perpetually protecting habitat in a forest may not allow for necessary logging and thinning projects. In addition to gains in scientific knowledge, nature constantly affects changes that aren't predictable. The very notion that easements in perpetuity are ecologically beneficial contradicts modern views in ecology which hold that the environment is "in a process of constant change rather than in search of a stable end-state."64 For example, a conservation easement intended to protect the habitat of salmon would likely designate an area along a river for spawning and limit development. But rivers change their course over time. If the area under easement is defined geographically, it will be deemed useless when, inevitably, the river shifts.65 Another example would be a situation where a conservation easement covering a wetland to protect habitat dries up, deeming the wetland useless for conservation purposes. In still another situation, an easement created and written to protect an endangered species could become useless if the species becomes plentiful or extinct. Some environmental lawyers respond that inevitable changes can be broadly addressed by writing "dynamic" - rather than the more traditional "static" - conservation easements. They recommend that perpetual easements be written specifically allowing for changes in science, nature, and public policy.66 But, as some of these same attorneys point out, drafting these easements can be prohibitively expensive and difficult to write, particularly for the smaller land trusts with limited staff and resources.67 And without possibly knowing or being able to predict what changes would occur, how could even the most experienced attorneys write an easement comprehensive enough to cover all possible changes to what's considered ecologically beneficial, far into the future? Another unintended consequence of perpetual conservation easements is the long-term impact they inevitably will have on housing costs. The rapid rate land trusts are acquiring properties, preventing construction of homes far into the future, will in time limit housing availability and push prices up.68 This already is a critical issue in California, where 427,000 acres of land are encumbered by conservation easements69 and where the state contains some of the most expensive real estate in the nation. For decades there has been a constant struggle pitting farming and grazing needs and the desire for open spaces against housing needs.70 With the rapid pace that land throughout the state is being taken out of production by conservation easements, housing costs can only be expected to rise further. Does perpetual have to mean forever? Does a perpetual conservation easement allow either party to terminate the agreement once it has lost its ecological benefit? How difficult is it for heirs to terminate a time-worn agreement? And how costly? 11 of 22 1/24/2014 5:00 PM Conservation Easements: The Good, the Bad, and the Ugly http://www.nationalcenter.org/NPA569.html The answers are not obvious, mainly because conservation easements do not conform to the traditional rules of common law (see next section).71 Outcomes could differ depending on the specific language of the easement, state law, and interpretations of the residing courts. Laws generally favor honoring perpetuity, primarily because grantors receive federal tax benefits for donating or selling conservation easements only if they are perpetual. Land trusts particularly are motivated to ensure perpetuity, not only by a desire to maintain interest in the property far into the future, but also to assure prospective grantors that the property under easement will be protected forever.72 Furthermore, as some experts argue, land trusts are acutely aware of the inevitable future challenges to easements by descendants and are writing agreements they believe will survive the test of time. The issue becomes less clear, however, in cases where the land trust, as well as the landowner, are in agreement over the need and desire to end a conservation easement. In these instances, the ease or difficulty generally depends on the state's law governing easements. Most state laws either contain the same language in the non-binding Uniform Conservation Easement Act, stating the conservation easements may be modified or terminated "in the same manner as other easements," and that courts may "modify or terminate a conservation easement in accordance with the principles of law and equity" - or they do not address the issue.73 But most experts agree state requirements and procedures for termination are not uniform, adding to the confusion over if, when, and how a perpetual conservation easement can be ended or modified.74 Some states require a public approval procedure.75 Other states stipulate the decision-making falls on the state attorney general, who enforces the general interests of the public.76 Legal scholars generally believe it is not likely that the courts will readily allow termination unless they determine the purpose for the conservation easement has changed or become obsolete, and the agreement no longer provides intended benefits. Specifically, courts can apply the Restatement (Third) of Property which reads, "[i]t is inevitable that, over time, changes will take place that will make it impracticable or impossible for some conservation servitudes to accomplish the purpose they were designed to serve. If no conservation or preservation purpose can be served by continuance of the servitude, the public interest requires that courts have the power to terminate the servitude so that some other productive use may be made of the land."77 Regardless of the outcome, attempts to change perpetual conservation easements will be costly. If changes are sought by future descendants, legal and transaction fees are likely to be hefty. The law was written recognizing that the donor received tax benefits for agreeing to perpetuity. However, as the law now stands, in cases where termination is desired by both parties and the state or court allow it, the landowner would not be required to compensate the land trust. But if the property eventually is sold by the property owner, he would be required to pay the land trust a portion of the proceeds, assuming the owner initially received a charitable deduction.78 In conclusion, considering the rapid growth in the use of conservation easements, the question of perpetuity enforcement will be with us for decades to come and eventually must be dealt with by the courts in one way or another. And it will be costly. As law professor Julia Mahoney observes, perpetual conservation easements inevitably will burden future generations with economic, "ecological, legal and institutional messes for later generations to deal with."79 Are perpetual conservation easements inconsistent with common law? Most legal experts agree that conservation easements, perpetual or time-limited, are not recognized under common law. Conservation easements are called "negative servitudes" 12 of 22 1/24/2014 5:00 PM Conservation Easements: The Good, the Bad, and the Ugly http://www.nationalcenter.org/NPA569.htH in legal terminology, referring to the fact the easement holder is preventing the landowner from taking action on his own property - i.e., building or developing. By contrast, an "affirmative servitude," or non-conservation easement, enables the landowner to make active use of his land. Common law, which favors use of one's land rather than restrictions, traditionally recognizes only three types of negative servitudes, none of which include those for conservation purposes.80 In addition, conservation easements are easements "in gross," meaning they benefit one or more individuals who do not own land adjacent to the easement. In a standard non-conservation easement, such as an agreement that allows the holder to use the grantor's property to build an access road, the individual benefiting from the easement is the holder who owns land adjacent to the land under easement. In a conservation easement, however, the easement is assumed to benefit the general public, and does not entail ownership of adjacent land. Generally, common law has disfavored easements in gross and, specifically, has rejected long-lasting easements in gross. It has also rejected both covenants (contracts) and servitudes that bind holders of land via dead-hand control.81 Over the years, however, all 50 states and the District of Columbia have enacted laws allowing for perpetual "negative servitudes in gross."82 While the laws vary from state to state, most include: 1) a legislative declaration of policy; 2) an authorization to utilize conservation easements as "property interest," more apt to be recognized under common law, rather than as "covenants" or "contracts;" and 3) an attempt to shield conservation easements from common law doctrines.83 While some legal experts are of the view that in time, the courts will strike down the "perpetual" aspect of conservation easements, others believe that because statutes supersede common law, state laws allowing for perpetual easements will prevail.84 Tax Incentives Another controversial aspect of conservation easements are tax incentives.85 From the viewpoint of the owner donating an easement, the tax benefit is pivotal; it is considered by many the key incentive driving the landowner to donate the use of his land.86 As noted recently by The Wail Street Journal, the increase in the federal income tax deduction for easement donations "spurred a sharp increase in the number of landowners interested in placing easements on their property."87 Yet to some critics, the tax incentives are considered a "tax bonanza," largely rewarding wealthy landowners and costing the U.S. Treasury over $1 billion, while providing questionable public benefit.88 Easements received wide public attention following a series in The Washington Post in 2003, exposing significant abuses and violations by land trusts, most notably, The Nature Conservancy. The articles revealed a typical practice in which the land trust acquires an easement for millions of dollars, then turns around and sells it at a loss for a considerable tax write-off. In some cases, easements had little to do with conservation, such as using the tax-funded arrangements to build golf courses.89 The series triggered a Congressional investigation, followed by a 2005 report by the Joint Committee on Taxation, concluding that current tax policy also enables "taxpayers to claim substantial charitable deductions for conservation easements that arguably do not serve a significant conservation purpose."90 Similarly, the report found that the process for appraising the value of the easement is ripe for error, and that the subjective nature of assessing the value of the easement before and after the donation makes it "virtually certain that many appraised values are incorrect."91 The IRS since then has cracked down on such activities and unlike previously, now audits conservation easement donations routinely. Furthermore, the Land Trust Alliance is working closely with its members on proper and ethical handling of easements. In 13 of 22 1/24/2014 5:00 PM Conservation Easements: The Good, the Bad, and the Ugly http://www.nationalcenter.org(NPA569.huid 2004, it revised its "Land Trust Standards and Practices," devising new accounting and ethical procedures and requiring its members to adopt the new policies. In 2005, it introduced an accreditation program for conservation groups and worked closely with the Senate Finance Committee to adopt new uniform appraisal standards and rules on conflict of interest.92 Furthermore, a new law enacted in 2006 tightens the rules governing appraisals and establishes harsh penalties.93 But reforms have not changed another problem with the tax incentives - what many view as conservation easement's unfair tax treatment of non-wealthy property owners. Because the allowable charitable income tax deduction is based on annual income, individuals in high income brackets earn disproportionately larger tax savings than those in middle and lower. As an example, consider three individual grantors with different income levels, each donating a conservation easement worth $500,000. The grantor with an adjusted growth income of $35,000 will receive an annual charitable tax deduction of $10,500, an aggregate tax deduction over six years of $63,000, and an aggregate tax savings of $9,450. The individual earning $75,000 receives an annual deduction of $22,500, a deduction over six years of $135,000, and an aggregate tax savings of $36,450. A donor earning $250,000, however, will receive an annual deduction of $75,000, a six-year aggregate tax deduction of $450,000, and an aggregate tax savings of $157,500.94 Pending Legislation * Rural Heritage Conservation Extension Act of 2007 (S. 469) In 2006, the president signed into law a bill increasing the charitable tax deduction for qualifying farmers and ranchers95 who donate property for a perpetual conservation easement from a maximum of 30 percent of adjusted gross income to 100 percent. It also raised the maximum deduction for other landowners donating land for easements from 30 percent to 50 percent and extended the period allowable to carry the tax deduction forward from five years to 15. The tax benefits expired December 31, 2007.96 But the Food and Energy Security Act of 2007 (the "farm bill" - pending when this report went to print) would extend the tax deduction increases for two years.97 * Endangered Species Recovery Act of 2007 (S. 700) Sponsored by Senators Mike Crapo (R-Idaho) and Baucus, S. 700 would increase the tax benefits to property owners who donate land for conservation easements to the federal government. The easement can either be perpetual, 30-years, or a negotiated time limit. The bill would allow an income tax credit of 100 percent for perpetual conservation easements, 75 percent for 30-year easements, and 50 percent for negotiated limits. The bill is pending in the Senate Committee on Finance. Rep. Mike Thompson introduced the House companion bill H.R. 1422.98 Recommendations 1. Government should not be allowed to obtain conservation easements through prearranged acquisitions. An easement acquired by a government agency through a public land trust does not require any approval process from either the public or the property 14 of 22 1/24/2014 5:00 PM Conservation Easements: The. Good, the Bad, and the Ugly http://www.nationalcenter.org/NPA569.htm] owner and, therefore, is not accountable. Government agencies at any level of government should not be permitted to obtain land through preacquisitions or any form of arrangement with land trusts. If a landowner wishes to donate or sell an easement directly to a government entity, there is nothing preventing him from doing so. 2. No federal funding for nonprofit conservation groups. Land trusts, through their definition as public charitable organizations, already benefit enormously by their federal tax-exempt status. Beyond this benefit, land trusts should work independent of tax-dollar handouts, which too easily can subject them to political pressures, coercion or influence from government. Government should end its use of subsidies, grants, and other funding to these nonprofit organizations. 3. Tax deductions should not require perpetuity. A property owner has the right to do with his land as he wishes and should be entitled to place restrictions, if desired. However, given that changes in nature and science over time alter society's definition of what is ecologically beneficial - and given the economic and ecological uncertainties of permanently encumbering land - government should not use tax dollars to effect perpetual conservation easements. Conservation easements differ from regular easements in that the "party" to be affected by the agreement is not one individual but the public as a whole. Future generations should not be burdened with inflexible, irreversible policies based on today's land use decisions. Specifically, conservation easements should be time-limited ("term easements,") providing charitable income tax deductions to those individuals who restrict land use on their property in, say, 10- or 20-year increments. Legislative language based on The Uniform Conservation Easement Act allows for easements limited in time as well as perpetual.99 Furthermore, a number of states provide tax incentives for term easements.100 California's Williamson Act gives tax incentives to landowners who place agricultural easements on property for a minimum of 10 years under a "rolling contract" with local government.101 Other states such as North Dakota allow only term easements. Neither the federal nor state governments should be able to mandate perpetual terms as a condition of tax benefits. 4. Eliminate the estate tax. It must first be said that the right to sell or donate one's land or a portion of one's land to a nonprofit organization or to a government entity is a property right. No matter what public policies, are enacted governing conservation easements, individuals will always have the right to do with their property as they wish. The issue is whether government through tax incentives should be able to influence property owners' land use decisions, particularly considering problems with conservation easements outlined in this report. While the overall objective of conservation easements is to discourage development, the rising burden of estate taxes on heirs is often the factor driving them to sell their property to developers. As Environmental Defense's Michael Bean wrote back in 1997, the estate tax is "highly regressive in the sense that it encourages the destruction of ecologically important land in private ownership."102 This is particularly true for farmers, whose annual income may pale compared to the value of the land. For the descendants of these land-rich, cash-poor landowners who simply do not 15 of 22 1/24/2014 5:00 PM Conservation Easements: The Good, the Bad, and the Ugly http://www.nationalcenter.org/NPA569.htm] have the resources to pay the taxes, their only option may be to sell the land to developers.103 Rather than attempting to patch up the problem by manipulating the tax code with tax breaks, a far more effective means of protecting land from development would be for federal and state governments to eliminate the "death tax" altogether. As Jonathan Adler, a law professor at Case Western University, observes, "For too long policymakers have labored under the assumption that the only way to enhance environmental protection is the enactment of more federal rules and regulations. We forget that existing federal laws are often part of the problem."104 A better alternative to tinkering with the tax code is to eliminate those policies that damage land preservation in the first place. At the state level, 27 states - slightly more than half - impose an estate tax. Yet a number of these states, recognizing its damage on small, family farms, as well as its deterrence to retirees who otherwise might move to the state, are abolishing it. Virginia's death tax expired in July 2007, Wisconsin's in December 2007, and Kansas' will end in 2009.105 5. Pending legislation. The Food and Energy Security Act of 2007 (H.R.2419), Section 12203, would particularly benefit farmers and ranchers, who would receive a maximum 100 percent tax deduction on adjusted gross income for encumbering land via an easement. But rather than require perpetuity, landowner should be allowed to reconsider the conditions of the easement every 10 years. One way to handle the charitable income tax deduction would be to adjust the amount of the allowable tax benefit to correspond with the length of the term of the easement. In other changes, banning the transfer of a conservation easement from a land trust to a federal, state, or local government would ensure easements remain in private hands. The Endangered Species Recovery Act of 2007 (S. 700) promotes government management and control of private lands and runs counter to the concept that easements work best operating under private ownership, private initiative, and private stewardship. Even zoning restrictions and takings require some degree of public approval and accountability. This bill would enable the government to control private property by appealing directly to land-rich, cash-poor landowners through generous tax credits. Conclusion What once showed promise as an effective tool for preserving lands through private ownership and stewardship is increasingly becoming a questionable practice, particularly as land trusts join government in partnerships and, in some cases, use conservation easements to turn private land over to government ownership. As the conservation easement and land trust movement continues to grow by leaps and bounds, it is imperative that reforms be put into place that return easements to their original intent to protect property through private means. Requirements that easements encumber land in perpetuity remove one of the arrangement's most significant benefits - flexibility. As the natural state of our environment and scientific discovery evolve, so do society's definitions of what should be preserved and how. Tax policy should not lock future generations into relatively shortsighted visions of what today is considered ecologically-beneficial. 16 of 22 1/24/2014 5:00 PM Conservation Easements: The Good, the Bad, and the Ugly http://www.nationalcenter.orgfNPA569.htm] Finally, through manipulations to the tax code, government influences property owners' decisions on land use, promising immediate tax relief to those who forfeit full rights and ownership of property. Were land trusts fully private organizations, free from government association and influence, there could be value. But given inherent problems with conservation easements, most pointed, the rise in government involvement, influence, and acquisition of lands under easement, a far more effective means would be to eliminate the estate taxes that discourage land preservation in the first place. Dana Joel Gattuso is a senior fellow at the National Center for Public Policy Research. Footnotes: 1 Also called a conservation covenant or servitude. 2 The focus of this paper is on conservation easements held by land trusts. 3 Under the federal tax code, the donor must agree to place the easement in perpetuity In order to receive tax benefits. 4 Exceptions are made in most cases for farming or ranching. 5 Federico Cheever and Nancy A. McLaughlin, "Why Environmental Lawyers Should Know (And Care) about Land Trusts and Their Private Land Conservation Transactions," Environmental Law Reporter News & Analysis, Environmental Law Institute, Washington, D.C., March 2004, p. 10226. 6 Carol W. LaGrasse, "Conservation Easements: A Critical Commentary;' The Property Rights Foundation of America, Inc., March 14, 2000, at http•//www.cltizenreviewonline.ora/feb 2002 !conservation easements a critical commentary.htm. 7 Many, if not most, conservation easements are created to protect farming or ranching activities. Comments of Jean Hocker, President of the Land Trust Alliance, "What Makes for a Good Land Trust? A Roundtable Discussion," Competitive Enterprise Institute, October 7, 1997. 8 Federico Cheever and Nancy A. McLaughlin, op. cit., p. 10226. 9 I.R.C. 170(h)(3) In Cheever and McLaughlin, op. cit., pp. 10225-6. 10 See Nancy A. McLaughlin, "Amending Perpetual Conservation Easements: A Case Study of the Myrtle Grove Controversy," Abstract, University of Richmond Law Review, Vol. 40, p. 1031, at hno;//papers ssrn com 1so13lpapers.cfm?ab5tract Id=903845. Also, Duncan M. Greene, 'Dynamic Conservation Easements: Facing the Problem of Perpetuity In Land Conservation;' Seattle University Law Review, Vol. 28, No. 3, Spring 2005, p. 891, at htti),//Dai)ers.ssm.com/sol3/i)ai)em.cfm?abstract Id=724281#Paperpownload. 11 Cheever and McLaughlin, op. cit., p. 10224. 12 See Sean Mulholland, "Land Trusts: The Growth of the Non-Profit Land Conservancy Movement," Incentives and Conservation: The Next Generation of Environmentalists, ed. Daniel K. Benjamin, PERC (Bozeman, Montana), 2004, p. 8, at http://www.economiclssues.net/papers/PERCIandtmst.r)df. 13 They also differed from today's conservation easement In that they were "appurtenant easements," meaning the owner of the easement - In this case, the federal government - owned (bought up) land adjacent to the easement and, therefore, the arrangement was recognized under common law. See Mulholland, op. cit., p. 8. (More discussion on this under the section in this paper on common law.) 14 See Cheever and McLaughlin, op. cit., p. 10224-5. Also, see Mulholland, op. cit., pp. 9-12. 15 States needed to pass enabling legislation to allow conservation easements since the arrangements are not fully recognized under common law, which values active use of land rather than restrictions. See section "Are perpetual conservation easements inconsistent with common law?" 16 McLaughlin, "Conservation Easements -A Troubled Adolescence," Journal of Land Resources & Environmental Law, Vol. 26, no. 1, p. 48, Note 2. ' 17 of 22 1/24/2014 5:00 PM Conservation Easements: The Good, the Bad, and the Ugly http://www.nationalcenter.orgINPA569.htm1 17 National Conference of Commissioners on Uniform State Laws, "Uniform Conservation Easement Act," 1981, at f. htto,//www.cals.ncsy.edu/wci/`lpnlPDFDocumentsZuniforrn.pd 18 Land Trust Alliance In McLaughlin, "Conservation Easements - A Troubled Adolescence," op. Cit., pp. 49-50. 19 Land Trust Alliance, 2005 National Land Trust Census Report, November 30, 2006, p. 3-4, at http://www.Ita.org /census/2005 reoort.odf. 20 While the national membership organization for land trusts, the Land Trust Alliance, keeps track of data on conservation easements held by the nation's local, state and regional land trusts, there is no source that carefully tracks the number of conservation easements held by the large national organizations. Also, see John Hart, "Private Land, Public Good: Taking Stock of Conservation Easements," Bay Nature, Special Section: January-March 2006, at htto//www.baynature.com/2006ianmarch/easements main html. 21 Land Trust Alliance in McLaughlin, "Conservation Easements - A Troubled Adolescence," op. cit., pp. 49-50. 22 Testimony of Steven J. McCormick, President and CEO of The Nature Conservancy, before the U.S. Senate Finance Committee, June 8, 2005; and Joseph M. Kiesecker, et. al., Conservation Easements In Context: A Quantitative Analysis of their Use by The Nature Conservancy;' Frontiers in Ecology and the Environment, Issue 3, Vol. 5, April 2007. 23 Land Trust Alliance, 2005 National Land Trust Census Report, op. cit., p. 15. Note: Dominic Parker maintains the portion of controlled land that trust groups hold in conservation easements Is much higher - 78 percent in 2003 - than what the Land Trust Alliance reports because the Alliance counts "a handful of public agencies" it considers to be land trusts. See Dominic P. Parker, Conservation Easements: A Closer Look at Federal Tax Policy, PERC Policy Series, PERC, October 2005, pp. 6 & 24, at htto//www.perc.orci/Dem.vhl)7id=743. 24 McLaughlin, "Conservation Easements - A Troubled Adolescence," op, cit., p. 51. 25 See Carol W. LaGrasse, op. cit.. 26 See the Land Trust Alliance web site at www.lta.oro. Also, Mulholland, op. cit.; and Parker, Conservation Easements: A Closer Look at Federal Tax Policy, op. cit., p. 6. 27 Ibid. Also, Mulholland, op. cit., p. 6. 28 See Cheever and McLaughlin, op. cit., p. 10232. 29 According to the Land Trust Alliance, the fastest increase In easement donations has occurred in states that provide the most generous state tax incentives. Land Trust Alliance, 2005 National Land Trust Census Report, op. cit., p. 8. 30 Rachel Emma Silverman, "Tax Break with a View," The Wall Streetioumal, February 7, 2007. 31 H.R.2419, Food and Energy Security Act of 2007, Section 12203. 32 See Cheever and McLaughlin, op. cit., p. 10225. 33 Parker, Conservation Easements: A Closer Look at Federal Tax Policy, op. cit., p. 9. Also, Land Trust Alliance, "State Tax Credits for Conservation," Updated November 16, 2006, at h www. a.o blic oli tate tax cred .htm. 34 Defenders of Wildlife, "State Government Incentives for Habitat Conservation: A Status Report," March 2002, in Parker, op. cit., p. 9. 35 Study after study shows the failure of government as a steward of land. See Bruce Yandle, "Land Trusts or Land Agents?" PERC, December 1999, at htto://www.pem.ora/Dem.php?id=375. 36 See Darla Guenzler, Ensuring the Promise of Conservation Easements, Bay Area Open Space Council, and Debra J. Pentz, Planning for Perpetuity: A Study of Colorado Conservation Easement Practices, Bay Conservation Resource Center (Boulder, Colorado), in Dominic P. Parker and Waiter N. Thurman, "The Private and Public Economics of Land Trusts;' NC State Economist, INC State University, July/August 2004, p. 2, at http://www.aQ-econ.ncsu.ecJu /VIRTUAL LIBRARY/ECONOMIST/iulyaug04.pdf. 37 Federico Cheever and Nancy A. McLaughlin, op. cit., p. 10233. 38 Julia D. Mahoney, Perpetual Restrictions on Land and the Problem of the Future, UVA Law & Economics Research Paper no. 01-6 and UVA School of Law, Public Law Research Paper no. 01-11, University of Virginia School of Law, 18 of 22 1/24/2014 5:00 PM Conservation Easements: The Good, the Bad, and the Ugly http://www.nationalcenter.org/NPA569.htmi December 2001, pp. 38, at http~//paoem.ssm com/sol3/oapers.cfm?abstract id=291537. 39 "Historical Origins of the Trustees of Reservations," The Trustees of Reservations website, at http://www.thetmstees.org/pages/89 historical origins.cfm. 40 Roger A. Cunningham, "Scenic Easements In the Highway Beautification Program," 45 Denver Law Journal, 1968, pp. 182-3, in Nancy A. McLaughlin, "Increasing the Tax Incentives for Conservation Easement Donations: A Responsible Approach," Ecology Law Quarterly, Vol. 31:1, pp. 102-3, supra note 405. 41 Ibid. 42 Mulholland, op. cit., p. 8. 43 See www.thetmstees.org. 44 See Congressional Testimony, Robert J. Smith, Adjunct Environmental Scholar, Competitive Enterprise Institute and Director of the Center for Private Conservation, before the Subcommittee on Parks, U.S. Senate Committee on Energy and Natural Resources, June 24, 2004, at htto:/Ienergy.senate.clov/public/Index.cfm?FuseAction=Hearinas.Testimonv& Hearing ID=1243&Witness ID=3629. 45 Thomas J. Bray, "Clear Thinking and Strategic Environmental Giving Are Making America More Beautiful;' Philanthropy Magazine, Jan: Feb. 2004, at httE)•//www.perc.or(i/articies/article448.t)h p. 46 Ibid. Also, see the Sand County Foundation web site at http,//-www.sandcounty.net/foundation. 47 Bray, op. cit. 48 Michael De Alessi, "Can Land Trusts Be Trusted?" The American Enterprise Online, July 2000, at http,llwww.taemag.com/issues/articlelD.173071article detail.asp. 49 See Sean Mulholland, op. cit., p. 13. 50 See Eve Endicott, "Preserving Natural Areas: The Nature Conservancy and Its Partners;' Land Conservation Through Public/Private Partnerships, ed. Eve Endicott, Lincoln Institute of Land Policy (Island Press: Washington, D.C. and Covelo, CA), 1993, p. 19. 51 Keith W iebe, Abebayehu Tegene, Betsey Kuh, Partial Interests in Land: Policy Tools for Resource Use and Conservation, Introduction, Economic Research Service, U.S. Department of Agriculture, AER #744, November 1996, at htto//www.crr,.vsda.qgv/publications/AER744. 52 Yandle, op. cit. 53 De Alessi, op. cit. 54 Edward Thompson, Jr., "Preserving Farmland: The American Farmland Trust and Its Partners;' Land Conservation Through Public/Private Partnerships, op. cit., p. 47. 55 Lee Bumsted, "Partnerships Ensure Protection for Maine Lands," Gulf of Maine Times, Vol. 7, No. 1, Spring 2003, at htti),//www.gulfofmaine.org/times/sprinq2OO3/mcht.htm. 56 U.S. Government Accountability Office, Report to the Subcommittee on Interior, Environment, and Related Agencies, Committee on Appropriations, House of Representatives, "Prairie Pothole Region," GAO-07,1093, September 2007, p. f. 20 & 34, at htto,//www.gao.aov/new.ItemS/-dO7lO93.od 57 Ibid. 58 American Farmland Trust, Annual Report: 2006, p. 18; The Conservation Fund, Combined Financial Statements, Years Ended December 31, 2006 and 2005, p. 18; and The Nature Conservancy, Consolidated Financial Statements As of June 30, 2007 and 2006, p. 4. 59 U.S. Department of Agriculture, Forest Service, Forest Legacy Program National Report for Fiscal Year2004, FS-816, December 2004, p. 2, at htto•//www fs fed.us/sof/coop/library/flo nat reort 2004.odf; Congressional Testimony, Dale Bosworth, Forest Service Chief, USDA Forest Service, before the Senate Finance Committee, March 4, 2005; and Congressional Testimony, Mark Rey, Undersecretary, USDA, before the Senate Energy and Natural Resources Committee, February 28, 2006. Dollars adjusted for inflation, using 2007 dollars. 19 of 22 1/24/2014 5:00 PM Conservation Easements: The Good, the Bad, and the Ugly http://www.nationalcenter.orgfNPA569.html 60 Daniel Hellersteln, Cynthia Nickerson, et. al., Farmland Protection: The Role of Public Preferences for Rural Amenities, Economic Research Service, USDA, AER-815, November 2002. Dollars adjusted for Inflation, using 2007 dollars. 61 See Julia D. Mahoney, op. cit. 62 Ibid, pp. 14, 19-22. 63 See Dana Joel Gattuso, "Forest Reforms In the Crossfire," FoxNews.com, June 30, 2005, at htti),Ilwww.foxnew5.cQmlstory/0,2933,160841.00.htm. 64 Fred P. Bosselman & A. Dan Tarlock, The Influence of Ecological Science on American Law: An Introduction, 69 CHL-Kent L. Rev., 1994, pp. 847, 848, in Greene, op. cit., p. 907. See Greene, op. cit., p. 906. 65 See Greene, op. cit., p. 906. 66 Ibid, p..915. 67 Ibid, p. 908. 68 See Pacific Legal Foundation in Christopher West Davies, "Pushing the Sprawl Back: Landowners Turn to Trusts," New York Times, October 11, 2003. 69 Land Trust Alliance, 2005 National Land Trust Census Report, op. cit., p. 20. 70 See Timothy P. Duane, "Maximizing the Public Benefits of Agricultural Conservation Easements: A Case Study of the Central Valley Farmland Trust in the San Joaquin Valley," University of California, Berkeley, June 12, 2006, at http,//landscape.ced.berkelev.edu/-delta/classes/LA205/PublicBeneftsACEs.pdf. Also, Peter Fimrite, "Bay Area's Open Space Tightrope," San Francisco Chronicle, June 5, 2005. 71 Nancy A. McLaughlin, "Rethinking the Perpetual Nature of Conservation Easements;' Harvard Environmental Law Review, Vol. 29, Research Paper No. 05-03, 2005, p. 425, at http,//www.law.haward.edu/students/oms/elrlvol29 2 /mciauohiin odf. 72 Most land trusts make It clear to prospective grantors that a conservation easement will not likely be terminated and that "such changes are extremely rare and only occur where the amendment does not reduce the protection of conservation values" See, for example, Vermont Land Trust, Conservation Easements: Guide to the Legal Document in Mahoney, p. 34. 73 UCEA Sec. 2 (a) & 3 (b), op. cit. Also, Cheever and McLaughlin, op. cit., p. 20131. 74 McLaughlin, "Rethinking the Perpetual Nature of Conservation Easements," op. cit., p. 426. Also, see Cheever and McLaughlin, op. cit., p. 10231: "Relying on the vagaries of state law to resolve disputes regarding the modification and termination of perpetual easements may well prove to be difficult and costly" 75 Mahoney, op. cit., p. 34. 76 See McLaughlin, "Amending Perpetual Conservation Easements: A Case Study of the Myrtle Grove Controversy," op. cit., p. 1041. 77 Greene, op. cit., p. 904. 78 See McLaughlin, op. cit., p. 10231. Also, Greene, op. cit., p. 904. 79 Mahoney, op. cit., p. 43. 80 See Greene, op. cit., p. 891-2. Also, Mahoney, op. cit., p. 9. 81 Greene, op. cit., p. 892. 82 McLaughlin, "Conservation Easements - A Troubled Adolescence," op. cit., p. 48, note 2. 83 Greene, op. cit., p. 893. 20 of 22 1/24/2014 5:00 PM Conservation Easements: The Good, the Bad, and the Ugly htq)://www.nationaleenter.org/NPA569.htnd 84 See James Burling In Pat Taylor, "Sacrificing Rights To Protect Property," Insight on the News, May 13, 2002, Vol. 18, Issue 17. Also, Greene: "...neither [state) case law nor its statutory law eliminates the possibility that conservation easements will face common law challenges. However, practitioners can mitigate such risks by drafting the conservation easement with proper attention to common law and statutory requirements and to the perpetual nature of the easement" Op. cit., p. 896. Note: A number of commentators on perpetual conservation easements have referred to the "rule against perpetuities" as a direct violation of common law. This is false. The rule refers to a limit under common law to when property is allowed to vest, that Is to be transferred from the owner. It does not refer to how long one holds the property once the transfer takes place. See Melinda Harm Benson, "Perpetuity - What Does It Mean for Conservation Easements and the Wyoming Constitution?" November 2004, William D. Ruckelshaus Institute of Environment and Natural Resources, University of Wyoming, at http~//www.uwyo.edulOI)enspaces /do cs/ Pe roetu Ries. odf. 85 This section refers to "perpetual conservation easements," since, in most cases, tax benefits are not available to grantors unless they are perpetual. 86 See Land Trust Alliance, 2005 National Land Trust Census Report, op. cit., p. 8. 87 Silverman, op. cit. 88 Stephen & Ottaway, "Developers Find Payoff in Preservation: Donors Reap Tax Incentive by Giving to Land Trusts, but Critics Fear Abuse of System," Washington Post, December 21, 2003. 89 See Joe Stephens & David B. Ottaway, "Nonprofit Sells Scenic Acreage to Allies at a Loss: Buyers Gain Tax Breaks with Few Curbs on Land Use," Washington Post, May 6, 2003. Also, Stephens & Ottaway, "Developers Find Payoff," op. cit. 90 Joint Committee on Taxation, Options To Improve Tax Compliance and Reform Tax Expenditures, Prepared by the Staff of the Joint Committee on Taxation, #JCS-02-05, January 27, 2005, pp. 281, 284 & 427, at htto,//www house.oov/ict/s-2-05.odf. 91 Ibid, p. 285. 92 See the Land Trust Alliance, "Land Trust Standards and Practices," last updated July 23, 2007, at http,//www Ito ora/so/. Also, Joe Stephens, "Alliance Starts Plan to Improve Land Trusts," Washington Post, April 20, 2005, p. A08; and Joe Stephens and David B. Ottaway, "Senators Question Conservancy's Practices," Washington Post, June 8, 2005, p. A03. 93 Silverman, op. cit. 94 The example assumes a charitable tax deduction capped at 30 percent. See McLaughlin, "Increasing the Tax Incentives for Conservation Easement Donations: A Responsible Approach," op. cit., p. 32. 95 Defined as Individuals who earn at least half their annual Income from farming or ranching. Public Law 109-280, Section 1202. 96 Ibid. 97 H.R.2419, Food and Energy Security Act of 2007, Section 12203. See Library of Congress, Thomas, at http,//-thomas.loc.gov/. 98 Ibid. 99 National Conference of Commissioners on Uniform State Laws, "Uniform Conservation Easement Act: Summary," at htto,//-www.nccusl.org/nccusl/uniformact sum m arles/uniformacts-s-ucea asp. 100 Anita M. Zurbrugg, Less-than-perpetuity and Agricultural Conservation Easements, American Farmland Trust, Center for Agriculture in the Environment, April 14, 2003, p. 15. 101 See The California Land Conservation (Williamson) Act: Status Report, 2006, p. 1, at http,//www consrv ca aov /DLRP/Ica/pubs/status%20reports/2006/ W illiamson%20Act%20 Status%20 Report%202006%20(com plete).Ddf. 102 Michael J. Bean, "Shelter from the Storm," The New Democrat, April 1997. 103 See Jonathan H. Adler, "The Antl-Environment Estate Tax: Why the'Death Tax' Is Deadly for Endangered Species," Competitive Enterprise Institute, On Point, No. 35, April 20, 1999. 21 of 22 1/24/2014 5:00 PM Conservation Easements: The Good, the Bad, and the Ugly http://www.nationalcenter.org/NPA569.titml 104 ibid. Also, see"Ilving on Earth," Public Radio International, Estate Tax Batt/e, June 7, 2002, at http~//www.loe.ora /shows/shows htm7pmgramlD=02-P13-00023#feature6. 105 Ashlea Ebeling, "Tax-free in the Rust Belt," Forbes, August 13, 2007. Donate I Subscribe I Search I About Us I What's New I Bloq I Home F_ Consider a tax-deductible donation The National Center for Public Policy Research 501 Capitol Court, N.E. Washington, D.C. 20002 (202) 543-4110 Fax(202)543-5975 E-M ail: Info @ natio na Icenter o rg Web: www.nationalcenter.org 22 of 22 1/24/2014 5:00 PM