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Search Terms: "Conservation and Reinvestment Act", House or Senate or Joint

Document 6 of 151.

July 25, 2000, Tuesday

SECTION: PREPARED TESTIMONY

LENGTH: 3450 words

HEADLINE: PREPARED TESTIMONY OF SAMUEL R. STALY, PH.D. DIRECTOR, URBAN FUTURES PROGRAM REASON PUBLIC POLICY INSTITUTE

BEFORE THE SENATE COMMITTEE ON FINANCE SUBCOMMITTEE ON TAXATION AND IRS OVERSIGHT

SUBJECT - FEDERAL INITIATIVES TO PROTECT OPEN SPACE

BODY:
I would like to begin by thanking the committee for the opportunity to comment on the federal role in preserving open space and land conservation. Urban and suburban development issues have emerged as an important part of the policy debate in the United States, and these hearings provide an opportunity to broaden the parameters of this debate and provide some context for federal policy. Indeed, while some components of state, local, and federal growth-management strategies are controversial (e.g., growth boundaries, state mandates, etc.), almost everyone seems to agree that open-space preservation is a legitimate public-policy goal.

Unfortunately, relatively little time or resources have been spent understanding the dimensions of open-space preservation in a policy context. In particular, while widespread public sentiment supports enhanced efforts to protect open space and farmland, the amount of open space, the specific strategies, and the role of the federal government in these efforts is unsettled. As I will discuss below, given the state of the current debate and our knowledge of land-use trends on the national and local levels, skepticism is warranted concerning significant increases in the federal role in these efforts.

The Federal Role in Land Acquisition and Open Space The key question before the committee is whether the federal government should dramatically expand its role in protecting open space and promoting land conservation by significantly increasing public expenditures for these activities. Both the Better America Bonds and CARA legislation attempt to expand this role, focusing primarily on using federal money to leverage state and local spending. Since the federal government is leveraging local initiatives, many people may view these efforts as benign. Poorly targeted federal spending and poorly designed strategies for open-space acquisition, however, may well do more harm than good, even in the area of land conservation. A central issues is whether a compelling federal interest exists in local land conservation efforts.

National Land Use, Farmland, and Open Space

As a matter of national policy, current urbanization trends do not threaten the amount of open space. Using preliminary data from the National Resources Inventory, only 5.4 percent of the nation's land is developed. Less than 4 percent of that developed land is urbanized. While the NRI data suggest the rate of land development has increased, the increase is only marginally impacting the amount of open-space overall.

In fact, developing a consistent federal response to open-space issues is problematic because states vary significantly in the amount of land developed. The most developed state in the nation is New Jersey where 35 percent of the state's land is developed. Less than 3 percent of many western states is developed. Already, the federal government owns more than 400,000 acres, almost four times the amount of land developed according to the preliminary NRI data. Some states have more than half their land locked up in federal and state wildlife preserves. In Utah, 64 percent of the state's land is permanently protected through federal ownership according to the Bureau of Land Management. In fact, almost one-third of New Jersey is currently protected through a network of state and federal parks that includes the Pinelands National Reserve (the Pine Barrens).

Not surprisingly, the greatest debates about open space occur at the local and regional level, not the national level. For example, Washtenaw County, Michigan was the focus of an intense fight to pass a property tax increase to fund a land preservation program. The county is home to Ann Arbor and part of the greater Detroit economic region, and the debate centered on farmland loss and the quality of life. Yet, more than half of Washtenaw County's land was still in rural and agricultural uses. Similarly, debates over growth management and land development have proliferated in largely rural and suburban areas, from Portland, Oregon to Ventura County, California to Lancaster County Pennsylvania. Many of these areas do not face a general threat to their open space. Rather, land conservation programs are the product of local quality of life issues and a fear of community change.

Defining Open Space

The type of open space people want to conserve is not well defined either. Most of the debate that motivates concerns about urban sprawl is localized: people are concerned about open space in their backyard, not hours away in a distant park or forest. Utah, for example, is initiating a statewide and regional growth-management strategy, focusing primarily on the Salt Lake City region. Yet, less than 2 percent of the Greater Wasatch Area (including Salt Lake City) is developed, and planners expect less than 4 percent to be developed by 2020 based on current trends.

To the extent open space is an issue in rural areas, the debate revolves around the fragmentation of farmland. Even here, however, the fragmentation is most important in areas close to towns and cities. In rural Yellow Springs, Ohio, concern over development prompted the town and local residents to buy a 930-acre farm to prevent new development. Local residents, the local government, and antidevelopment organizations raised more than $3 million to buy the property. Absent the open-space acquisition, the land would likely have been developed for housing. New housing, while taking decades to achieve build-out, had the potential to significantly increase the population in the village and the surrounding area. Many feared the loss of the rural- village atmosphere that this development would have prompted.

Farmland Preservation

Importantly, while the Yellow Springs case is often used as an example of "farmland preservation," the real motivation was the protection of open space to prevent change in their community. The nation's agricultural industry is healthy, and the nation remains an exporter of key crops, including rice, wheat, cotton, soybeans, and corn. Agricultural productivity is at all tune highs in the United States and in the world. Ross Korves, Deputy Chief Economist for the American Farm Bureau Federation, observes that the world agricultural yield is expected to increase by about 1.5 percent per year while world population growth is expected to fall from 1.2 percent be year in 2005 to 1 percent by 2015. Thus, food security is not a sufficient reason for promoting farmland preservation on the national, state, or local levels.

Not surprisingly, a significant portion of the decline in farmland is attributed to lower demand for agricultural land. Luther Tweeten, an agricultural economist at Ohio State University, estimates that 74 percent of the decline in cropland nationwide can be explained by lower demand for agricultural products and uses. These estimates are consistent with the preliminary data released by the NRI. From 1982 to 1997, 28.9 percent of the total land used for rural and urban development was converted cropland. The remainder came from pasture, range, forests, and other rural lands. More significantly, cropland fell by 45.9 million acres during this period, but development accounted for only 19.1 percent of this decline.

The remaining cropland was converted to forest, pasture, range, wetlands, or other rural uses.

State Involvement in Open-space Preservation

State and local governments have been active in open space preservation for several years. In fact, as of June 2000, all states except North Dakota, South Dakota, Oklahoma, and Texas had land conservation or open-space programs on the books. More importantly, states and local governments have become increasingly active on this front.

The most heralded case is probably New Jersey's voter-approved commitment to spend more than $2 billion by 2010 on environmental protection and land conservation. More than $800 million will be dedicated to farmland preservation and $600 million to open-space acquisition and growth management. Some analysts estimate this initiative could place as much as half of the state's remaining privately-owned land off limits to future development. Other notable state initiatives include Arizona's commitment to spend $20 million per year on open space. Minnesota is dedicating $12 million to openspace acquisition, Oregon is committing $45 million per year to its program. Pennsylvania has also committed more than $100 million per year over five years to land conservation, and Ohio will be placing a $200 million proposal to fund open space on its ballot in November.

On the local level, several counties have initiated open-space programs. One of the more heralded examples is Lancaster County, Pennsylvania, where two programs have combined to save more than 30,000 acres. Moreover, despite the failure in Washtenaw County, Michigan, open-space and parks programs tend to receive substantial public support at the ballot box. In addition to public initiatives, more than 1,213 local land trust protect almost five million acres of land. National conservation organizations such as the Nature Conservancy and Audubon Society protect another 10 million acres.

Federal Efforts to Promote Land Acquisition Could be Counter Productive Despite the apparent popularity of these programs, several reasons exist for adopting a cautionary policy stance at the federal level.

Significant increases in federal involvement could be counter productive, particularly if they reinforce politically motivated attempts to put as much land off limits to development as possible as quickly as possible.

Land Acquisition Can Not Curb Urban Sprawl

First, federal efforts could simply encourage piecemeal land acquisition that promotes urban sprawl. As much as the efforts of states, local governments, and local citizens may be lauded for their concern about protecting open space, these efforts rarely impact land- development patterns significantly.

Ohio provides a useful example. Yellow Springs was able to protect 930 acres. But this parcel is surrounded by thousands of acres of farmland that could be developed for housing. Greene County, home Yellow Springs, has more than 178,000 acres of farmland according to the 1997 Census of Agriculture. Nearby Clark County has another 172,000 acres. In fact, based on current land prices in urban areas, the $200 million current law makers want to dedicate to land conservation could effectively impact less than 1 percent of the state's open space and farmland.

An analysis of other open-space acquisition programs reveals similarly small impacts. After twenty years, Lancaster County's open-space acquisition programs have protected 7.7 percent of the county's farmland. Maricopa County expects to preserve more than 90,000 acres in the Phoenix region by 2010, but this represents just 1.5 percent of the total acreage in the area. Along the Treasure Cost of Florida, just north of Miami, 54,558 acres are targeted for preservation, but this represents just 2.4 percent of the land in the region. Even if federal dollars significantly increased the ability of these programs to preserve open space, the impact on overall land use and development will be minor.

Significantly boosting land purchases across the board, a likely effect of federal initiatives, is likely to spur land acquisition in ways that encourage leapfrog development. Preserving patches of several hundred acres in different spots in metropolitan areas can help create parks, but also encourage the development of noncontiguous urban areas that still must be served by roads, water, sewer, and other urban infrastructure. Similarly, these efforts can encourage current trends toward lower densities.

Public Land Purchases are Inflexible

A second issue is the inflexibility of public land-acquisition programs. Almost all open-space programs presume that any land purchased will be kept permanently from development. Land, however, is a resource and can serve a variety of different uses. To exclude some uses (e.g., housing, offices, or shopping centers) ignores productive alternatives that could enhance community welfare. Private land trusts, in contrast, have the flexibility to be more strategic in land acquisition and sales. Many trusts swap land they consider more valuable for environmental purposes for land that is less desirable, permitting land development and urbanization more efficiently and economically. Public land programs, in contrast, are often driven by political goals to prevent any future development, regardless of its economic efficacy.

Lack of Local Knowledge

An additional problem posed by federal efforts to promote land acquisition is the tendency to promote porkbarrel projects. At current levels of funding, open-space and farmland protection programs must be strategic. Parcels of land need to be selected and identified for their strategic, aesthetic, and amenity value. Federal initiatives are likely to make this strategic thinking difficult. States and localities, much like transportation funding, will make efforts to acquire the funds without a full assessment of the costs and benefits of land acquisition. Currently, in many states, land acquisition programs rarely consider the potential costs of land acquisition, including noncontiguous urbanization, reductions in land supply, maintenance costs for parks and recreation areas, traffic congestion impacts, or the economic viability of land for agricultural purposes.

Most state budgets are generating fiscal surpluses, providing opportunities to increase funding for land conservation programs. The states have sufficient revenues to fully fund existing open-space protection programs without federal involvement. In Ohio, for example, the state is expected to rim a $600 million fiscal surplus. Since 1996, the state has run cumulative surpluses in excess of $1.6 billion. For Fiscal Year 1999, state governments in the United States had rainy day funds averaging 9.4 percent of their general revenue funds.

Unintended Consequences

Finally, the federal government mns the risk of encouraging land development regulation and growth-management experiments with potentially significant unintended consequences. Under the Conservation and Reinvestment Act (CARA), for example, planning mandates could encourage a largescale reclassification of private property without mechanism for reversing poor strategic decisionmaking. Similarly, local governments are experimenting with growth-control techniques such as urban-growth boundaries, ignoring potential side effects such as higher housing prices and lower housing affordability.

Conclusion

In sum, little evidence suggests the federal government has a compelling justification for promoting further local open-space acquisition or farmland protection beyond existing efforts on the state and local levels. Open-space and farmland concerns are distinctly local issues. The nation is not faced with the prospect of losing significant amounts of open space or farmland. Urbanization, in particular does not pose a significant threat on a national or state level. Most states remain largely undeveloped and current trends in land use do not suggest a significant change.

More importantly, the private sector, state governments, and local governments are already responding to the public desire to preserve more open space. State and local governments have authorized hundreds of millions of dollars in new spending for openspace acquisition and farmland protection. Indeed, most states are running fiscal surpluses and have the ability to significantly increase spending for land conservation if they want to.

Federal involvement at this time, however, does have the potential to reinforce poor policymaking and decisionmaking on the state and local level.

By reinforcing the perception that development is encroaching on open space and farm productivity, federal efforts could encourage inefficient and damaging growth-management policies while, paradoxically, encouraging leapfrog development and urban sprawl.

Thank you for your attention and interest.

FOOTNOTES:

This analysis relies on the preliminary NRI data recalled in March 2000 contained in Summary Report, 1997 National Resources Inventory, U.S. Department of Agriculture, Natural Resources Conservation Service, December 1999. All land-use data refer to this source unless otherwise noted. The recall was prompted by the discovery of a computer programming error that overestimated the amount of developed land, particularly in rural areas. The new data will not be released until September 2000 according to the U.S. Department of Agriculture. For a critique of the NRI data, see Steven Hayward, "The Suburbanization of America," in ,4 Guide to Smart Growth, ed. Jane S. Shaw and Ronald D. Utt (Washington, D.C.: Heritage Foundation/The Political Economy Research Center, 2000), pp. 9-10. See also Samuel R. Staley, "An Overview of U.S. Urbani,ation and Land-use Trends," in Smarter Growth: Market-based Strategies for Land-use Planning in the 21x Century, ed. Randall G. Holcombe and Samuel R- StaIcy (WestP9, rt, CT: Greenwood Press, in press), available from the author.

Historically, urbanized land accounts for between two-thirds and three-quarters of the developed land in the United States. See Samuel R. StaIcy, The Sprawling of,merica: In Defense of the Dynamic City, Policy Study No. 251 (Los Angeles: Reason Public Policy Institute, 1999), pp. 10-12 and the discussion in Staley, "An Overview of U.S. Urbanization and Land-use Trends."

Daniel R. Simmons, Randy T. Simmous, and Samuel R. Staley, Growth Issues in Utah: Facts, Fallacies, and Recommendations for Quality Growth (Murray, UT: The Sutherland Institute, October 1999), pp. 5152.

Staley, "An Overview of U.S. Urbanization and Land-use Trends."

Samuel R. Staley, "Urban Sprawl" and the Michigan Landscape: ,4 Market-oriented Perspective (Midland, MI: The Mackinac Center for Public Policy, October 1998), pp. 9-10, Appendix C.

Simmons, Simmons, and Staly, Growth Issues in Utah, pp. 41-42.

Samuel R. Staley, "The Political Economy of Land Conversion on the Urban Fringe," in Agriculture and the Environment: Searching for Greener Pastures, ed. Terry L. Anderson and Bruce Yandle (Palo Alto, CA: Hoover Institution Press, 2000).

The Village of Yellow Springs has a population of about 4,000 and is the home to Antioch College, a nationally known liberal arts college.

U.S. Department of Agriculture, Economic Research Service, Foreign Agricultural Trade in the United States, January-February issues.

Luther Tweeten, "Competing for Scare Land: Food Security and Farm Preservation," paper presented to the American Agricultural Law Association, Minneapolis, Minnesota, October 17, 1997 and "Cropland Conversion and Urban Development in Ohio," Ohio State University Department of Agricultural Environment, and Development Economics, unpublished manuscript.

Linda E. Hollis, Douglas R. Porter and Paul S.Tischler, Livability and Affordability: Open Space Preservation and Land Supply (Chevy Chase, MD: The Growth Management Institute, June 2000).

Ibid.

Ibid.

Ibid.

Phyllis Meyers, "Livability at the Ballot Box: State and Local Referenda on Parks, Conservation, and Smarter Growth, Election Day 1998," Discussion Paper prepared for The Brookings Institution, Center on Urban and Metropolitan Policy, January 1999.

1998 National Land Trust Census, Land Trust Alliance, Washington, D.C., htpp://www.lta.org. See also the discussion in Staley, The 'Vanishing Farmland' Myth, pp. 10-12.

Samuel R. Staley, "Ohio Farmland Preservation Efforts Trivial, Off Target, and May Encourage Urban Sprawl," Perspective on Current Issues (Columbus, Ohio: The Buckeye Institute for Public Policy Solutions, July 2000).

Samuel R. Staley, Jefferson G. Edgeus, Gerard C.S. Mildnet, A Line in the Land: Urban-growth Boundaries, Smart Growth, and Housing Affordability, Policy Study No. 263 (Los Angeles: Reason Public Policy Institute, October 1999), p. 30f.

Hollis, Porter, and Tischler, "Livability and Affordability," p. 17.

Ibid., p. 21.

Data provided by The Buckeye Institute for Public Policy Solutions, Columbus, Ohio.

Ibid. and survey of states by the Ohio Legislative Budget Office. See the budget office's publication Budget Footnotes (June-July 1999), p. 246. For a critique of CARA, see Greg VanHelmond and Angela Antonelli, "Why CARA is Fiscally Irresponsible and.a Threat to Local Land Use Decisions," Backgrounder No. 1370 (Washington, D.C.: Heritage Foundation, May 9, 2000).

END

LOAD-DATE: July 27, 2000

Document 6 of 151.


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