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Show Page 10 The Ogden Valley News Volume XXX Issue V October 15, 2023 The Economic Benefits of Open Space every $1 of revenue it generated. In other words, Revenues - In addition to providing market- agencies. The fish and wildlife populations sup- Compiled by Shanna Francis The wide variety of economic benefits of open space can often be overlooked. Our attempt here is to expand the width of this appreciation by sharing just a few of these benefits, helping to dispel the “conventional wisdom” about land development versus conservation. It’s hoped that a synthesis of the concepts presented will allow for a broader range of future decision-making options for planners, local officials, and community members as important and often irreversible decisions are made regarding land use outcomes. Development concerns are warranted since development pressures can irreversibly alter the long-term economic and social character of a community where most decisions about growth and development take place. Unfortunately, these same communities often lack the information needed to accurately assess the benefits and costs of alternative land uses. For example, while the economic benefits of development are readily recognized and promoted by various business interests, the local benefits of protecting open space are often overlooked since they are difficult to measure and articulate. A few of the benefits of protecting open space are explored below. 1. Diverse Functions Benefit - Describing the economic benefits of open space and wildlands can be difficult since these areas often provide multiple values simultaneously. For example, the same wetland that buffers the impact of peak storm flows may also provide important habitat for wildlife and enhance the property values of adjacent homes and neighborhoods. Thus, simultaneously, they can prevent or mitigate the costly, negative impacts of flooding, provide wildlife habitat, and increase the property value of neighboring properties. 2. Impact on Municipal Budgets - Community leaders and planners are increasingly recognizing that local population growth and real estate development don’t necessarily provide net fiscal benefits to local governments. In other words, providing infrastructure and other services to accommodate new development may cost more than the development generates in property taxes and other revenues, especially in rapidly growing communities, such as those along the Wasatch Front and within the Western United States. This, combined with decreased intergovernmental transfers of financial aid and support, and increasing citizen resistance to escalating taxes, has, in some cases, led local officials to closely scrutinize the fiscal consequences of land use decisions. Fiscal Impact Analysis is used to compare the public costs and revenues associated with alternative land uses to determine the fiscal impact of development on local governments. Based on a review of such studies, economists have found that residential development often incurs a net fiscal deficit, while open space lands generate a surplus. For example, a study of six rural New England towns revealed that residential development required $1.13 in municipal services for the revenue it generated wasn’t enough to cover the costs incurred. In contrast, open space lands required only $0.29 in services for every dollar of revenue generated. These same lessons are being learned in rapidly growing Utah Communities. For example, Summit County determined that each new house constructed in the county increased costs by $300 a year above any additional tax revenues. These added costs of development are typically subsidized by existing residents, and over several years can result in substantial increases in property taxes and municipal service fees. Ironically these higher taxes are too often accompanied by a lower quality of life due to reduced municipal services, increased traffic and congestion, crime, water and air quality issues, and noise and light pollution, etc. Regarding rising tax rates, I recently took the time to compare the amount of property taxes I paid on my home 25 years ago versus what I’m currently paying. I was shocked to see they’d escalated from roughly $500 annually to $5,000 on the same home! 3. Enhancement Value on Adjacent Properties - The existence of open space may affect the value of adjacent lands. In 1919, landscape architect Frederick Law Olmstead, Jr. stated that “a local park... adds more to the value of the remaining land in the residential area which it serves than the value of the land withdrawn to create it,” the park. Evidence of such enhancement value is commonly found in real estate ads that feature proximity to public lands, golf courses, and other open spaces. Of course, the relationship between market and enhancement values of open space depends upon land scarcity and the perceived risk of development. In rural areas, where most land is open space and likely to remain so, both market and enhancement value will be low. However, market and enhancement value will be high in urban or urbanizing areas like St. George and the Wasatch Front. The recognition of enhancement value is important for open space advocates and municipal leaders since it can partially offset reduced tax revenues from permanent open space lands that may be removed from the tax rolls or placed under special reduced-tax designations. 4. Production Value - Open space lands are seldom idle, but rather are part of a working landscape vital to the production of goods and services valued by society. The adoption of a conservation easement doesn’t mean that land has to remain idle. For instance, conservation easements are commonly placed on working farms that continue to function and produce goods and revenue. Oftentimes, the economic value resulting from these lands is direct and readily measured, as with produce from agricultural lands, livestock from rangelands, and wood products supplied by forests. The monetary returns from production accrue directly to the landowner and indirectly to the community at large. Farming, ranching, and logging are economically important to Utah, especially in rural counties. In conjunction with public lands, the wood products supplied by these lands generate millions in annual sales. Utah’s farms cover millions of acres, producing billions of dollars in agricultural products each year. Even so, Utah is rapidly losing its productive open space lands. For example, between 1974 and 1992, Utah lost nearly a million acres of farmland to development. Projections estimate that by 2050, the state will have only 0.6 acres of farmland per person, roughly half the area needed for self-sufficiency. The USDA recently indicated that the U.S. lost 1.3 million acres of farmland in 2021. Most of this farmland is being converted into new urban developments. Unfortunately, the loss of open space to development and fragmentation will likely accelerate over the next decade since many rural landowners are approaching retirement age and face increased tax pressures on land values and estates. Conservation easements can be an effective tool in estate planning, allowing, in many cases, a family’s ability, economically, to retain these valuable lands, passing them on from one generation to another. 5. Impacts on Employment & Tax valued goods and services, open space lands support jobs and related income that are valuable to the local, regional, and national economies. In 1995, 13.4% of Utah’s jobs were farm or farm related. Today, this is closer to 11%, which equates to about 194,000 jobs. Many of these jobs are located in more rural areas that provide limited employment options beyond those related to agriculture production. 6. Natural System Value - Open space lands support natural ecosystem functions such as groundwater recharge areas, climate, drought, and global warming mitigation, flood control and storm damage prevention, and air and water pollution abatement. Economists are increasingly recognizing these natural ecosystem benefits since human life cannot be sustained without them. One way to estimate the value of ecosystem benefits is to calculate the monetary damages that would result if the benefits were not provided. Or, to calculate the cost of public expenditures required to construct infrastructure to replace the functions of natural systems. For example, in Massachusetts, 8,500 acres of wetlands in the Charles River Basin were acquired to serve as a natural valley storage area for floodwaters. The cost of acquiring the wetlands was $10 million, while the alternative cost of building dams and levees would have exceeded $100 million. 7. Health & Quality of Life Value Research demonstrates that exposure to natural systems or open space is beneficial to our physiological and psychological wellbeing. Being in or surrounded by open space lowers blood pressure, heart rates, anxiety and depression levels, and even crime rates. They also improve air quality, healthy sleep patterns, one’s overall mental outlook, and improved immune function. Apparently, open space is not only good for wildlife, but for human beings, too! Healthier populations boost work force productivity and the costs associated with time off from work. Healthier populations also minimize the drain on health services and government-supported health care costs and insurance rates. According to the American Medical Association, a healthy population equals a healthy economy. Type 2 diabetes and heart disease are often linked to more sedentary lifestyles. The cases of each have become epidemic in our industrial economies. Open spaces provide readily available areas that are conducive to movement and exercise— walking, hiking, biking, skiing, rock climbing, swimming, kayaking, or just getting outside for some fresh air—all contributing to better health. 8. Recreational Value - Activities directly or indirectly associated with open space may generate significant expenditures, providing an important source of revenue for businesses and state and local governments. For example, revenues from hunting and fishing license sales are a major source of funding for state wildlife porting these activities rely on habitat provided by open space. Less direct but perhaps more important from an overall economic perspective are expenditures from open space related activities such as hiking, hunting, fishing, bird watching, nature photography, snowmobiling, skiing, camping, boating, and mountain biking. Such expenditures include the purchase of equipment, travel costs, lodging and other accommodations, guide services, meals, groceries, etc., as well as attendant service jobs that depend on these activities. These expenditures also have income and job multiplier effects, and often occur in rural areas with limited viable economic opportunities. For example, Utah’s tourism industry generated nearly $12 billion in visitor spending in 2022. This supported over 150,000 statewide jobs and generated an estimated 2.12 billion in tax revenue. The bulk of this wealth depended upon open space—Utah’s national and state parks, and her wide-open ski resorts, lakes and reservoirs, and hunting areas. Thus, monies aren’t just spent in more urban areas along the Wasatch Front, but distributed among more rural counties, too. Summary - In summary, communities increasingly face difficult choices regarding open space. Rural areas are facing significant development pressures, and many are realizing that existing open space may be lost without proactive intervention. Fortunately, with the help of informed planners, some suburban communities on the metropolitan fringe are finding that the loss of open space doesn’t have to be a necessary consequence of growth. Indeed, a growing array of new policy tools such as conservation easements, private land trusts, and cluster subdivision regulations that include swaths of permanent open space enable growing communities to exercise much greater control over development, leading to healthier and more sustainable development. Unfortunately, when it comes to implementing such protections, many communities face challenges by landowners and developers about restricting or the “taking” of private property rights. Suffice it to say, communities do have broad powers to regulate growth and development within their jurisdictions. Indeed, protecting the collective property rights of adjacent landowners and the community at large is also an important obligation of local government. This is particularly true when one considers how development costs are often passed along to the community through higher taxes and municipal or county service fees. Moreover, the high land and development values of open space lands near established communities largely result from the collective investment of existing residents in infrastructure costs such as schools, roads, and other services. Such public “givings” by, or exactments charged to existing property owners, however, are far too often ignored in the “takings” debate, even though these community expenditures far outweigh the financial losses likely to result from development restrictions protecting vital open space. The accommodation of unrestricted or unmitigated development and growth pressures is no longer the best economic strategy for counties, towns, and urban centers. A healthy planning office can be proactive in educating and offering multiple tools to citizens and community leaders as they consider land use options, including open space preservation and conservation, which can result in lower taxes, a higher quality of life, community and individual health benefits, healthier and more diverse ecosystems, job creation and sustainability, recreational resources and opportunities, lower infrastructure needs and costs, and the influx of valuable tourism dollars—all of which support the economic viability of a community. Conservation easements are a tool to help protect the many values provided by a community’s open spaces, now and into the future. For more information, please contact Ogden Valley Land Trust at 801-971-1852 or 801-745-2688. Note: Some of the information for this presentation was gleaned from an article by Robert J. Liliehom & Charles J. Fausold written in association with the Institute of Recreation and Tourism and Utah State University Extension Service. |