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22.12.03

More On Land Trusts

Developers Find Payoff in Preservation

Easements are permanent deed restrictions that limit some types of intrusive development -- such as dense subdivisions or strip mines -- while often permitting limited construction. Landowners "donate" the easements to a nonprofit land trust or a government agency that, in effect, certifies that the restrictions are meaningful and provide some public benefit, such as preserving open space or protecting wildlife. That allows the donor to seek federal income tax deductions for the reduction in the land's market value.

By taking such steps to limit construction, the owners of vacation resorts, country manors and dude ranches can seek big write-offs, too. Pennsylvania developer Kenneth C. Hellings says he restricted building on "unusable" portions of his new subdivision and took "a shocker" of a tax deduction. Luxury-home builders in North Carolina paid $10 million for a tract in the mountains, developed a third of the land, then claimed a $20 million deduction. Such tax bonanzas have become a little-noticed byproduct of the maturing environmental movement, which increasingly entwines preservation of land with preservation of wealth.


This article is long, but it goes into a lot of the problems faced by the land trust system. It treats it more as a compliance problem -- poor enforcement of the rules and agreements -- rather than a structural problem -- whether it makes sense to give monitoring authority to local, private groups while the benefits come out of the federal budget.

The paragraphs I quoted come near the beginning, and are presented in a way that suggests they're examples of the typical operation of a land trust. We learn later that the incidents described are examples of abuses, in which minimal gain for conservation led to mega-gain in profit for the owner. But the impression that this initial presentation leaves you with -- or at least this is how it struck me -- is that there's something disingenous about the whole land trust idea, and that there's something wrong with it because rich people can gain from it, as opposed to it being a pure act of charity. But that's exactly the point of the trust system -- rather than coercive regulation (as in the case of zoning), land trusts allow a mutually beneficial agreement to be made.

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