Regarding Conservation Easements
by Cornel Rasor
Although the original intent of conservation easements was to “ allow landowners to hold on to and use their property but permanently remove development rights in exchange for tax benefits” the use of these “negative servitudes” in legal parlance have become fraught with multiple misuses and unintended consequences. Invariably, when government involvement occurs in a scheme to remove land from private use, abuses will occur. I will not have time to detail the few potential but generally unrealized positive aspects of conservation easements but I will make available to any who ask, the complete report.
Some of the problems:
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.
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.
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.
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.
Use of taxpayer funds:
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.
Duration of easements:
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. 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 cultural – 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. Yet conservation easement requirements with the specific purpose of perpetually protecting habitat in a forest may not allow for necessary logging and thinning projects.
Conservation easements are called “negative servitudes” 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.
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. 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.
Clearly there are so many problems with the modern use of such easements, the city, with no real jurisdiction in the first place, should carefully research this issue before taking one side or another and in deference to the municipal goal of non-partisanship should refrain from advocating at all.
Most of the above article was taken from:
Conservation Easements: The Good, the Bad, and the Ugly
by Dana Joel Gattuso
Cornel Rasor is the Owner and Operator of
Army Surplus in Sandpoint