Our Klamath Basin Water Crisis
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What Does This Mean?
Property Rights Foundation of America
Landowners Opposed to Confiscation of All Land
October 29, 2001
Thank you to Kim Corkum, Kelly and Rocco Manno, and all of the members of LOCAL for inviting me to Warwick to speak tonight. Thank you to the Manno, Rudy, and Astorino families for the privilege of touring their wonderful dairy farms. This is a beautiful area. It was a special pleasure for me to return for the first time since the 1950’s, when, as a teenager, I went with the Reformed Church youth each summer on a yearly one-week retreat to Denton Lake in Warwick.
It is inspiring to meet with a group of farmers and landowners dedicated to protecting property owners from having their land “confiscated” by regulation zoning their land as open space. You are fighting a classical “regulatory taking.”
Many important U.S. Supreme Court rulings now protect landowners. The latest such Supreme Court decision, this year, Palazzolo v. Rhode Island, held that your property rights are protected even if you buy your land after the rules are in place! This is directly opposite to what we refer to as the “New York rule,” in the cases decided by our state’s Court of Appeals. Plus, the standard for how many hoops you have to go through before your case can go to court is now more liberal because of this decision.
During the 1990’s there were several important decisions improving the court-recognized rights of property owners. There’s the excellent Dolan v. Tigard ruling in 1994 where the government requirements for exactions, such as provisions for more possible traffic as a result of a project, have to be roughly proportional to the impact of the landowner’s project on the locality. In an earlier case, Nollan v. California Coastal Commission, the Supreme Court had ruled that there had to be a nexus between the exaction and the impact of the landowner’s project.
The 1992 Lucas v. South Carolina Coastal Commission decision is the most famous of the Supreme Court victories for private property owners. The Supreme Court simply said that David Lucas had to be paid in full for the regulatory “taking” of his beachfront land when the State said that he couldn’t build a house on it. There were houses on each side, already.
Earlier this year a very good U.S. Supreme Court wetland decision came down on a case fought by a solid waste authority on the south side of Chicago (Solid Waste Authority of Northern Cook County v. U.S. Army Corps of Engineers). The Army cannot control isolated wetlands anymore. They were regulating wetlands where migratory birds stop, claiming that they come under the Commerce Clause. They were saying that they had this power because the birds’ stopping made this interstate commerce. Now wetlands must come under navigable waters, which are what the law refers to. It is still unclear how small tributaries will fit in with this ruling.
This wetlands ruling doesn’t help too much in New York, but at least it gets the Army out of your hair in some cases. Here we have DEC, the Department of Environmental Conservation, which is in the same league as the Corps of Engineers.
The area of partial takings is not fully litigated. As a result, it is hard to predict what compensation would be given for a wetland “taking” or a re-zoning. (In the Lucas case, it was assumed from the beginning of the litigation that no economic use remained for the land in question.)
This year Senator Owen Johnson of Babylon and Assemblyman Robert Prentiss of Colonie have put in a wetland tax abatement bill in both houses. It would provide a uniform system of wetland tax relief throughout New York. Senator Johnson, the Senate Vice President Pro Tempore, is very influential. Both sides of the Legislature will continue the bill next year. It needs support of Assembly Democrats. If your Assembly Member is a Democrat, it is important that you contact him or her. This legislation results from PRFA’s work in Saratoga County after a controversial DEC wetlands re-mapping.
Now, here is good news:
The New York State Court of Appeals, the state’s highest court, ruled 7 - 0 on October 18 that the state’s “Right to Farm” laws apply to housing for farm workers. “Right to Farm” laws were written to protect farming operations from conflicts with suburban style land-use regulations. The New York State Agricultural Commissioner, Nathan Rudgers, had helped argue the farmer’s side in this case, saying that all farm buildings, including housing, are part of farm operations. In a decision written by Judge Howard Levine, the top state court agreed.
Paul Hafner, Jr., has a fruit and vegetable farm on 800 acres in the town of Lysander in Onondaga County that his family has farmed since 1905. The Town said that he couldn’t house workers in the ordinary mobile homes that he already has for them because they have only 900 square feet of floor space, which is less than the 1,100 square feet that the local zoning requires for a single family home. By Lysander’s rules, the farmer would have had to spend more than ten times as much as the cost of his single-wide trailers and put in double-wide mobile homes for the workers.
For three harvests, since 1998, Mr. Hafner has housed workers at trailer parks, friends’ houses, and even with his own family, because the Town forbade him from using the housing he has. In Judge Levine’s decision, however, he wrote that the Town failed to prove that “an absolute ban on single-wide homes was needed” to protect health and safety.
Mr. Hafner’s troubles are not necessarily over, however, because he still has to apply to Onondaga County for a building permit.
These are all excellent improvements in property rights for farmers. It is our job to educate local government.
Farmers have enough trouble without local zoning. Farmers face global competition. And this is not just for the big commodity crops. Remember the shock when soy oil imports from Brazil, etc. exceeded U.S. exports?
Now it is apples and apple cider concentrate from China. New York orchards bit the bullet, and asked for USDA price supports on apples.
It is the general downward spiral of the price of farm produce in relation to inflation. Wheat has held its own at roughly the same price per bushel since post-World War II.
When my mother was a little girl, my grandfather raised chickens in the backyard of the house in College Point on the north shore of Long Island in Queens County. In 1915 he sold eggs for one dollar a dozen.
The cost of labor hurts farmers. Migration to urban centers and generous welfare have drawn away domestic labor sources.
Regulations bring labor costs up. Property rights include freedom to contract. This is almost obliterated.
Taxes. Here we move closer to the obvious connection between property rights and the farmer, —and all landowners. Up north, Peter and I pay $10.00 per acre school taxes each year for almost worthless forest land. In Alabama, the forest industry told me recently, they pay $1.00 per acre. New York State gives tax relief through the Ag Districts. This is not enough, though.
All farmers should pay no more in real estate taxes than do the farmers who sell conservation easements. They should pay on “current use.”
There is no public interest in the present system where real estate taxes and other taxes squeeze farmers to sell the largest share of their value or largest fraction of their bundle of rights to a land trust or government in exchange for relief from the imposition of taxes.
If government can afford to pay or forgive these taxes, it can afford to pay or forgive these taxes if the farmer keeps clear, unencumbered title to his land.
But if all farm land taxes were so reduced, a big factor in the money and power machine for environmentalists and land trusts would disappear.
It’s not just real estate taxes.
Farmers are hit with inheritance taxes, or what we call “estate taxes.”
You sell a conservation easement, and you reduce your net worth for estate tax purposes.
Oddly, in Washington, D.C., there is a big effort to end the estate tax, but the land trusts are strangely silent. Did you know that The Nature Conservancy is the largest environmental group in the U.S.? It has assets of over $2 billion. They have the power to lobby against the estate tax if they wanted to.
The environmental groups and land trusts gain from the estate tax, also. It sends land into their domain and through them to government. They get nice markups on some flips.
There is almost no scrutiny of these deals in New York. The Comptroller’s office has virtually no guidance for the costs chargeable toward the price markup. There is no way to know whether “imputed costs” are real interest and other costs or just charges for the interest and other costs that the land trust decided to attribute to the transaction. One sheet of paper suffices for imputed costs for a multi-million dollar transaction.
DEC quietly prearranges acquisitions with a land trust. They have a monopoly. There is no competition. The land trusts are real estate agents for government. But ordinary real estate brokers are not allowed in.
It is not just real estate and estate taxes, but also income taxes that drive landowners to sell or donate conservation easements.
Many people have told me, but none will furnish appraisals, that they are offered inflated appraisals to sell conservation easements or land outright to a land trust. They can declare an inflated loss or donation on their income tax. The same deal goes for the inheritance tax.
Farmers have Equity.
Prices are low, labor expensive, it is hard to farm. Farm communities no longer thrive on the basis of farming. National statistics show that a high proportion of farms are sustained by the wife working at a job in town.
When I drive through farm communities, I can’t help noticing the Greek Revival architecture of the houses in once-prosperous town centers. The latest that these houses could have been built was 1860. There are some Victorian houses, built, perhaps, up to the turn of the Twentieth Century. Today there is no basis for the prosperity that could create farm communities that developed up to about a century ago.
But the farmer has held on to the land for decades, his family for a century, at times. This is their equity. Others have better houses, stocks, and cash savings. Oddly, farmers have never felt inclined to lobby for laws that non-farmers should pass over their houses, stocks, and savings to farmers.
I was at a rally in Fishkill. Jay Montfort is trying to get permission to quarry the land that he owns on Sour Mountain, to provide aggregate to feed his family-owned concrete block company. Scenic Hudson and others want to preserve the mountain but don’t want to buy the land fairly. At the rally, a dignified lady carried a sign “Save Our Mountain.”
I asked her, “Where is your car?” She was puzzled, so I repeated my question.
She said, “Over there.” I asked her to point it out exactly. She did.
I said, “I see it. Nice car. Would you give me the keys?”
She said, “Why should I give you the keys?!”
I said, “I like it. It’s my car,—just like that is your mountain.”
Here is one that will get you. My husband Peter saw a book for sale from Hamilton Books, the discount house, and bought me a copy. It is called Who Owns the Cow? It is a pretty picture book for kids. It takes you through the day...The kid likes the look of it, he drinks the milk, eats the cheese, and so on. No mention of the farmer owning it. We all own the cow. Huh??
Somehow the open space people think that they have part title in your land. Why not offer you a good price? A lot of farmers would be glad to sell.
At lease not split the title as in conservation easements, to leave it in hopeless perpetual confusion, or at least as long as our government stands, or, less likely, until someone, somehow, litigates the pieces back together again.
They buy conservation easements, but never tell the whole story. I’m reminded of a letter in the Greenwood Lake News on October 25, written by Ed Scharfenberger, president of the Warwick Taxpayers Association. It was about “Say yes to PDR’s,” or Purchase of Development Rights. It was a factual letter about the proposed Warwick Bond Resolution for $9.5 million. Mr. Scharfenberger said that this is only hastening the transfer of land to government. Who else will buy it? Where is the equity for a mortgage?
Compare this accurate letter to the distortion in a letter on October 12 in the Warwick Advertiser that misaccuses bond resolution opponents of categorizing farmers as “simpletons.” This letter says, “The program is entirely voluntary and farmers who apply do so only if they feel it is in their own self interest.”
Here’s an example of an intelligent farmer in Chester County, Pennsylvania. August Natale bought land that had conservation easements on it. He applied for a permit to build a farmhouse. The land trust that holds the conservation easement sued. (In New York, any qualified non-profit can sue.) The lower court favored Mr. Natale. Nine years later he watched stoop-shouldered as his new farmhouse was torn down after the ruling was reversed by the upper court.
The elderly man and his family are still paying the mortgage on the house. Were the bank that gave him the mortgage and the lower court also “simpletons”?
Conservation easements are complicated, long (many 25 to 30 pages or longer), and elusive.
Informed consent. Our journal Positions on Property about conservation easements—there are free copies on the table—contains the first and only attempt at a checklist for informed consent for the seller of a conservation easement. It asks questions. Will the buyer flip the conservation easement to local, state, or federal government? What type of house is allowed? Will a mine be allowed? (Farmers often desire to use a source of gravel.) Who owns what? There is an idea in the informed consent checklist that the conservation easement can be set up to revert to the underlying property owner if the terms are violated, such as by transferring the conservation easement to government.
And even if you two agree, a third party can enforce the conservation easement in New York. Not in Pennsylvania, because I got to the forest industry in the nick of time this summer as a conservation easement bill was being passed. In that state, only the land trust holding the conservation easement can challenge it.
Zoning is easier to fight than conservation easements. One good feature in New York is the supermajority rule. If enough effected landowners bring a petition, it takes three-quarters of the town board to approve the zoning. With zoning, many people are affected at once, whereas with conservation easements, the government and non-profit agency can pick them off one at a time. The many people who can be harmed by zoning can work together to defeat it.
Young people may start a business adjacent to their home, and the business grows. With zoning, it may be “grandfathered” in an area zoned residential, but this grandfathering may still not be worth a dime. They get you for the slightest improvement. You can’t expand. And some zoning “amortizes” your right to non-conforming uses over twenty years. The business may have to be shut down even though it stays the same.
We did an issue of Positions on Property about zoning and building codes. It enumerates some of the seemingly unfathomable but now commonplace ways zoning infringes on property rights of landowners, especially rural landowners.
The environmentalists and the spoiled suburbanites actually fear private ownership of property. They own theirs but your owning yours is “dangerous.” They want to regulate it, buy all the valuable rights to it, or buy it outright.
New York State, the Open Space Institute, The Nature Conservancy, American Farmland Trust, the Conservation Fund, and other wealthy groups allocate millions of dollars annually to buy up land and rights in land.
In fact, on November 13, 14, and 15 the DEC and Office of Parks, Recreation and Historic Preservation are holding hearings all over New York about the new Open Space Conservation Plan. For Region 3, where Warwick is located, this will be at Bear Mountain Inn on November 15, with a 1:00 p.m. workshop, and public hearings at 2:30 and 7:00 p.m. The Open Space Plan contains a giant list of areas in Region 3 and jointly in Regions 3 and 4 that the State intends to buy. These acquisition lists are used to pressure landowners to give up.
Zoning should be defeated locally. Farmland protections, if desired, can be negotiated by farmers. Since the government grants it anyway by substituting its own payments where it designates and by exempting non-profits, tax relief should come about by straightforward legislative enactment of farmland tax exemptions, not as perverse compensation to the farmer for parting with his property rights.
Remember the words of Thomas Jefferson, the author of the Declaration of Independence. “The God who gave us life at the same time gave us liberty.”
Without private property rights and private property, there is no freedom.
Last week, over the objections of the Communists, Russia’s President Vladimir V. Putin signed a law passed by the Parliament granting the right to own land to Russians. Let’s not slide into the century of mistakes of Eastern Europe- through zoning, government land purchase, TDR’s (transferable development rights), conservation easements, PDR’s (purchase of development rights), and the like. Europeans emigrated here for freedom and property ownership. Our ancestors fought and died. It’s a small price to pay in their memory and for those who will come after us to fight against zoning and for badly needed legislative reform.
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