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Conserved land raises local property values—and property taxes

By Diana George Chapin

The land conservation community has long heralded conserving lands as a way of adding jobs, increasing tourist revenue and insuring watershed protection throughout Maine and the United States. Now, with decreasing private donations and waning public support for taxpayer-debt-funded land acquisitions, the movement has shifted to describing the non-market values of conserved lands with monetary figures.

The effort includes developing new terms to describe the public benefit of conserved land and establishing the groundwork for acquiring more public funds.

“Since 2008, general economic concerns have outpaced non‐economic concerns among the majority of American voters,” says a 2011 white paper entitled “Evaluating the Economic Benefits of Land Conservation in Maine,” prepared for the Land for Maine’s Future board of directors. The document was researched and drafted by Aaron Paul, a consultant and degree candidate from Yale School of Forestry & Environmental Studies.

“The passage rate of LMF bonds referenda indicate a similar trend is occurring within Maine,” the white paper states. “Voters approve lower amounts of conservation spending in fewer numbers than they did a decade ago. This trend underlines the need to articulate the economic upside of land conservation. With increasing public attention to fiscal and economic issues, LMF must continue to employ innovative ways to sell the program. An increase in the visibility of economic benefits associated with land conservation will only enhance the movement’s ability to access public funds.”

The Land for Maine’s Future program—through bond funding and partnerships with municipalities and land trusts—is the state’s primary vehicle for acquiring public lands and conservation easements.

The LMF white paper hones in on “ecosystem services,” such as water purification and drinking water protection, storm water runoff, flood control, species habitat, health benefits and wetlands banking. Also included in the list of services: increased property values in communities proximate to conserved lands and decreased costs of services demanded by easement-encumbered public land.

These non-market aspects of conservation are perceived to have benefits, but which are difficult to assign a dollar value.

“These benefits can be measured easily and do not require a technical economic or business background,” the the LMF white paper contends. “Regardless of whether those benefits that can be expressed in monetary terms or even constitute a significant share of a project’s real value, articulating those benefits helps to preserve public conservation funding in Maine.”

A more sophisticated document released this year, entitled “Return on the Investment in Land for Maine’s Future,” was produced by the national non-profit corporation Trust for Public Land (TPL) and references the LMF paper. With monetary values estimated for attributes of land types purchased with LMF funds, the bulletin concluded that for every $1 invested in public land, an $11 return in “natural goods and services” is returned to the Maine economy.

The analyses that yield the calculations of values are not those of traditional economic modeling based on actual figures, but a more theoretical system of “environmental economics,” which uses a “benefits transfer method” and hedonic pricing models to create a measure of value for the aspects of conservation which the publication deems a public benefit.

“We used the benefits transfer method, which included a thorough literature review relevant to Maine’s ecosystem types to determine the natural goods and services and associated monetary values provided by LMF-funded land conservation projects,” the TPL report says. “The benefits transfer method is a commonly used approach in environmental economics analyses that uses existing studies on economic value of natural goods and services provided by ecosystems. We then estimated per-acre economic value of these natural goods and services to determine the economic values of the different ecosystem types identified from those sources.”

Some economists and appraisers say the methods of environmental economics are unsound and unrealistic because they yield a one-sided equation that places a monetary value on items not traded in the marketplace.  The equation does not consider expenses associated with conserved land, such as fire suppression. With no transfer in the marketplace, what is the real value of “ecosystem services,” they ask.

One glaring gap in understanding the practical aspect of living in Maine—and affording to reside here long-term—is exemplified by the both the LMF white paper and the TPL report: the promotion of increased property values as a benefit to communities.

“There are numerous economic and policy studies showing that proximity to conserved lands positively impacts property values, especially in urban and suburban areas,” the LMF white paper states. “The value that home buyers place on access to parks or open space reserves is demonstrable through the premiums they pay on their purchase. Furthermore, increases in property values augment municipal tax revenues in addition to building home owner wealth.”

As an illustration of the increased property values, the TPL publication cites a bulletin written by researchers at the Maine Forestry and Agricultural Research Station (MFARS), which showed that water clarity that coincides with source water protection affects property prices around Maine.

The MFARS bulletin “showed that a 1-meter improvement in lake water clarity results in changes in average property prices ranging from $11 per foot frontage on Echo Lake in the Augusta area to $200 per foot frontage on Sabbattus Lake in the Auburn area. When calculated along an entire lake, the increased frontage prices due to water clarity equate to millions of dollars in appreciated property prices.

“A more recent study on 36 lakes also analyzed how water clarity changes property values, finding that properties on lakes with 1-meter greater clarities have higher property values in the range of 2.6 percent ($2,560) to 6.5 percent ($9,270) depending on the market. In both studies, the increased prices would also mean increased revenues for municipalities through property taxes.”

Is the LMF board and TPL concerned that property values might increase over time to prohibitive levels, effectively making private property scarce or unavailable to a range of socio-economic classes? Are there concerns that increasing municipal valuations will cause the property tax burden to be too great for those currently living in municipalities whose land base has been aggressively targeted for acquisition?

As of deadline for The Maine Wire, calls and emails to the chairperson of LMF board and the Maine state director of TPL asking these questions had not been acknowledged or returned.

The ultimate question is still open for discussion: will those currently living in Maine be able to afford to stay?

 

Diana George Chapin is a freelance writer and a fourth-generation family farmer from Montville, Maine.

This is part of an ongoing series in The Maine Wire about Maine Land Trusts. Read all articles here.