Conservation Easments

Currently, Congress is considering scaling back on tax breaks for conservation easements.  As habitat protection and open space have become larger environmental issues, conservation easements have gone way up in use.  As with most government programs, the laws of unintended consequences have taken over, and many have found ways to get tax breaks some feel are undeserved.  Nature Noted has a long series of posts on the debate. 

I have mixed feelings on the change.  To understand this, lets take a step back and look at government environmental policy.  As I have written in the past, I think of government environmental legislation in 2 parts:

  1. Regulation of pollution and emissions that affect other people's property.  These regulations are essential to the maintenance of a system of strong private property rights.  Without them, we would all be in court every day suing each other for damage to our property or water or air on our land from neighboring lands. Of course, we can all argue about whether set limits are reasonable, and we do.
  2. Regulations of land use that effects only your own land.  This is a relatively new area of environmental law, ushered in by the Endangered Species act and various wetlands regulations.  These regulations say that even if your proposed land use doesn't create any emisions that affect anyone else, the government may still ban your land use for some other environmentally related goal (habitat, watershed, anti-sprawl, the list is endless). 

These land-use laws constitute by far the most distressing area to me in environmental law.  In the worst cases, these laws can result in what are effectively 100% takings of a person's land without any compensation. (Example:  you buy a lot on the ocean for $500,000 to build a beach house.  Before you can build it, new regulations are passed making it illegal for you to build a house on that land.  Yes, you still own the land, but it is now worthless to you since you cannot use or develop it).  Good article on this here (pdf) and a listing of Cato Institute articles on this topic here.

I have for a long time been a supporter of the Nature Conservancy and other land trusts (see Nature Noted site linked above for lots of links and info).  These trusts works to reach the goals in #2 above but with private money instead of government regulation and takings. 

Back to the issue of conservation easements.  It is becoming clear to me that while deals made by the Nature Conservancy rely on private money, they also rely on government subsidy through conservation easement tax breaks.  Their actions are not as private as I thought the were.  And therefore my mixed feelings.  I still think that their activities, even with the tax breaks, is more fair and probably much more efficient than the government takings approach.

  • http://home.earthlink.net/~sleepyjackal/index.html Jackal

    The only gripe I have against the NC is that when they are not using money to buy property, they are in court suing to prevent others from using their land. A couple years ago, they were one of the groups suing to prevent drilling on land in Louisiana(?) even though they permitted drilling on land nearby that they owned.

  • http://www.riverhillstraveler.com bob todd

    I'm with you in your concern that the government should not prohibit someone from building a beach house, etc. But hand it hand with concern over that is my concern about the government assuming liability for damage if I go ahead and build on a beach - or in a flood plain. I say let anyone do what they want with their land (so long as it does not impact a neighbor), but let the person who does it shoulder the consequences. No disaster aid for disaster we know are going to happen. No federal aid to insurance companies.

  • Mark Hudson

    For some time now I have been suspicious of the motives of the Conservation Easment movement. Every circular I receive (and I get a lot of them) talks exclusively of the Tax Savings all the way from Local Taxes to the US Capital Gains and the Lifetime Estate Tax reductions. They never speak of the Environmental Aspects of the Easments. This concept also is a retreat from the Fee simple that our English forefathers fought so hard for in the area of Real Estate land sales and conveyances. That is the bundle of rights to have and own, sell, develope or not develope owned land. In 1535 England adopted the Statute of Uses therby eliminating the Rule against Perpetuities that are now present in Conservation Easments. What right do we have to decide forever that our land can't be used for certain purposes? Do we have the moral right to determine what our land can be used for 100 years into the future? The most serious problem with Conservation Easments is that it allows others to enter onto your property any time they wish for any reason as long as they can contend their presence is for "Inspecting" the property. The IRS rule 170(h)provides tax deductions if the gift meets certain requirments. Almost all of these requirments require use by and for the General public. But even if you can get around the "General Public" requirment all Conservation Easements are silent as to the circumstances and conditions of other persons on your property. In short, you give up your right to privacy. Conservation Easment owners pay no AD Valorm Taxes but they now own a portion of the fee simple with control of the land. Now that's a good deal for THEM!

  • Seth Oliver

    I personally think that I do not like Kelsey Smith because she burned down my house. I think that she did it because of her great grandmaw was killed by my son. I would like to donate land to a conservation easement but because of my burned down house you will have to swim with the lobsters.