Common Tragedies

Thoughts on Environmental Economics

Your land is my land

Posted by Daniel Hall on October 23, 2007

I went apple picking with a group of friends out in the Montgomery County countryside this weekend, about 35 miles outside of the heart of DC. It was a gorgeous day: crisp fall weather, rolling pastures, and a half-bushel of Fuji-flavored joy. It was also an excellent chance to reflect on how we as a society make land use choices.

I noticed on the drive out how immediately the scenery shifts from suburban residential development to farmland. It’s nearly instantaneous. This is because Montgomery County has created a large agricultural reserve in the northwest portion of the county to preserve farmland. Or, as a friend quipped, “That’s what zoning will do for you.”

Later that day I got to have an extended conversation with this friend, who works on farmland preservation issues in the county, working to keep farms as farms, rather than being sold off and sub-divided for development. This turns out not to make you universally popular. “It’s tough being bitched out by some farmer that you’ve worked two years to try to develop a relationship with, having them tell you they won’t talk to you anymore because you’re destroying the value of their land,” my friend confessed.

This conversation put a human face on the book I’ve been reading and finished up this weekend, Boyd Gibbons’ Wye Island: Insiders, Outsiders, and Change in a Chesapeake Community. Originally written in the mid-70s, Gibbons’ book still rings true, with profound insights about how local communities make land use decisions, why achieving smart growth has proved so hard, and how we as a society negotiate the compromise between self-interest and public good.

My main thought after reading the book and reflecting on my countryside weekend was that everyone wants to be able to do what they think best with their own land; everyone also wants to be able to do what they think best with your land. The line between self- and public-interest is in the eye of the beholder.

Here are my other thoughts:

1) The title of the post is tongue-in-cheek but also somewhat true: there is a public interest — and societal value — in preserving open space. The challenge is that, while the economic interests for development are concentrated and involve few transaction costs (a contract and a briefcase of money), the economic value of preservation is widely dispersed across thousands of people who are not in an effective bargaining position.

2) Having said that, there are less savory reasons land preservation is successful:

a) The lifeboat rationale: once you “get yours”, your incentive is to make things stay the same from there on out. No more newcomers after me!

b) Class warfare: big lots and open spaces keep out the riff-raff.

c) Racism: this may be a smaller factor now than in Gibbons’ book, although I don’t have evidence one way or the other. All I know is that it was eye-opening to read the virulently racist rhetoric that was used to justify land controls that would hopefully keep out undesirables.

d) All this adds up to pretty basic self-interest: my property is worth more surrounded by open space. There’s something to the argument that zoning is about economic self-preservation on the part of those who make the rules.

3) Many farmers are understandably upset about land use controls: they are not only prevented from selling their land for what they could receive for it in a completely open market, but they may not even to be able to carve it up to build residences for multiple children. As my friend said, “Their equity is in their land, and you’re telling them what they can and can’t do with it, and whether they can recover that equity.”

4) The better your urban development, the lower the pressures on the surrounding area, and the easier your land preservation. Having said that, no matter how “smart” your urban growth, I still think there will be a large demand for low-density residential development in many of these exurban areas. As I noted previously, the impetus to own a piece of open space seems ingrained in the American consciousness.

5) There is some “option value” to keeping open space open. It may not necessarily stay that way forever, but once developed it is unlikely to go back for the foreseeable future.

It seems like in this arena we are negotiating not only across large numbers of people within our society today — which would be difficult enough — but also across time, and that future generations may lack adequate representation at our negotiating table.

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