In the last 30 years, the urbanized area in the United States has
more than doubled to 3
percent of all land, with over a third coming from cropland
and pasture. ERS estimates that 95 million acres of cropland—about
one-fifth of the U.S. total—is subject to varying degrees
of development pressure, or urban influence. Potential for continued
development has spurred efforts to protect farmland and its many
benefits—agricultural production, rural lifestyles, wildlife
habitat, rural vistas, and open space.
Policymakers have turned to two types of voluntary farmland protection
programs to create incentives for farmland owners to keep their
land undeveloped. Concerns about private property rights and the
difficulties of enacting local land use regulations have made voluntary
farmland protection programs more attractive than mandatory means.
Through preferential property tax assessment, authorized in all
States, landowners’ annual property taxes are computed based
on the land’s agricultural value, rather than on the higher
value if it were developed. In effect, State and local governments
are sacrificing tax revenue to reduce the landowner’s incentive
to develop the land. Because of preferential
assessment, States annually forgo taxes valued at $1.1 billion,
with a current value over future years of $27 billion. But much
of the land receiving preferential taxation is eventually developed
anyway, and some land receiving tax breaks is never at real risk
of development.
A second approach, purchase
of development rights (PDRs), legally restricts the owner’s
ability to develop the land. The landowner is paid a lump sum—equal
to the difference between the agricultural and developed property
value—to forever give up development rights. PDR programs
protected 1.1 million U.S. acres as of 2002 at a cost of $2 billion,
according to the American Farmland Trust. ERS estimates that it
would cost
$130 billion to purchase the development rights on all cropland
subject to development pressure across the U.S., about 65 times
more than has been spent to date. However, not all of the cropland
near urban areas is subject to equal development pressure. If the
30 million acres of cropland under the least pressure were protected
through PDRs to create a greenbelt around future development, the
cost would be only $18 billion (about $600/acre on average). In
contrast, if the 33 million cropland acres under high pressure were
protected through PDRs, the program would cost $87 billion (about
$2,600/acre on average). Comparing these PDR cost estimates illustrates
the substantial tradeoff between using available funds for saving
more acres under less development pressure versus saving the fewer
acres that are under more immediate pressure for development.
There is also a tradeoff between PDRs and preferential assessment
programs. Instead of “spending” the equivalent of $27
billion on preferential property tax assessment to temporarily
protect farmland in the path of development, spending the money
in PDR programs instead could permanently protect much of the cropland
currently subject to low and medium development pressure across
the U.S. This would put greenbacks into true greenbelts.
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