Rogers 2010 10-27-psp_s4_south_sound_forestland_conversion

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Rogers 2010 10-27-psp_s4_south_sound_forestland_conversion

  1. 1. SOUTH SOUND FORESTLAND CONVERSION South Sound Science Symposium, October 27th, 2010 Luke Rogers, Research Scientist, University of Washington
  2. 2. Integrated Statewide Parcel Data
  3. 3. Washington Forestland Database
  4. 4. Concepts  What is the rate of forestland conversion?  What is the current conversion risk?  What are landowners giving?  What are landowners getting?  What are landowners willing to do?  Concerns  Opportunities
  5. 5. Land Use 1988
  6. 6. Land Use 1996
  7. 7. Land Use 2004
  8. 8. Forest land use change ~1.8% per year Forest cover change ~0.67% per year South Sound Land Use Change 1988 - 2004 Mixed Use 118,000 Urban or Suburba n 84,000 Remaine d Forest 496,000
  9. 9. 2037 1901 1885 4012 3833 3389 1636 1662 1763 1978-1979 1988-1989 2001 In/Out of FIA Inventory National Forest Reserve Other Public Forest Industry Other Private Owner Group Net ownership change 75 48 56 26 51 123 24 50 23 Non-timberland Right-of-way Urban Agriculture Timberland Ownership Net Flow
  10. 10. South Sound Conversion Risk
  11. 11. What are Landowners Giving? $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 < 5 miles 5 - 10 miles 10 - 20 miles 20 - 40 miles > 40 miles AverageForegoneRevenue ($/acre) Distance to an Urban Growth Area (miles) Foregone Revenue for Development by Parcel Size and Distance to an Urban Area < 10 acres 10 - 20 acres 20 - 40 acres > 40 acres
  12. 12. What are Landowners Getting?  Enacted by the Legislature in 1971  A typical 40 acre parcel in the South Sound pays $40 in property tax when enrolled in the DFL program vs. $1,036 at highest and best use (HBU).  Add Forest Excise Tax ~$10/acre/year = $440  FFR costs ~$1,200-$2,000/yr for that same parcel  311,000 acres of Designated Forest Lands  $10 million tax-shift to non-DFL properties = $0.13/$1,000 = $53/yr for a $400k home
  13. 13. Development Compensation?  Equalize the difference between the market value of forest lands and the net present value of managing for timber on those same lands.  Using 5% discount rate = forest NPV rate  Contiguous ownerships at least 20 acres, undeveloped, and parcels are at least 5 acres  $96m Annuity over $76bn = $1.26/$1,000 = $500/yr for a $400k home
  14. 14. Willingness to Participate 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% $0 $100 $200 $300 LandownerEnrollment Incentive Payment ($/acre) 10-year contract 30-year contract
  15. 15. Willingness to Participate Per Acre Payment Contract Length 25 50 75 100 125 150 175 200 225 250 10-year contract 7.7% 17.0% 33.7% 51.3% 65.5% 76.4% 87.1% 93.0% 96.6% 97.5% 30-year contract 0.8% 2.6% 7.7% 17.5% 34.3% 51.6% 66.2% 77.0% 87.6% 93.1% 50-year contract 0.0% 0.2% 0.8% 2.6% 7.8% 17.6% 34.6% 52.4% 66.6% 77.3% Perpetuity 0.0% 0.2% 0.9% 2.9% 8.4% 19.3% 35.7% 53.4% 67.4% 78.1% Expected acreage enrolled, percent available acreage enrolled, total payments Per Acre Payment 25 50 75 100 125 150 175 200 225 250 ContractLength 10 1700.83 3384.90 6663.34 10266.55 13118.97 15629.26 17723.22 18994.42 20200.44 20660.94 8.0% 15.8% 31.2% 48.0% 61.3% 73.1% 82.9% 88.8% 94.4% 96.6% $42,521 $169,245 $499,751 $1,026,655 $1,639,871 $2,344,389 $3,101,564 $3,798,885 $4,545,100 $5,165,234 30 227.19 745.74 1700.83 3565.59 6707.00 10285.30 13216.62 15699.66 17755.08 19014.27 1.1% 3.5% 8.0% 16.7% 31.4% 48.1% 61.8% 73.4% 83.0% 88.9% $5,680 $37,287 $127,562 $356,559 $838,374 $1,542,795 $2,312,909 $3,139,932 $3,994,893 $4,753,567 50 0.00 14.72 227.19 745.74 1710.95 3593.63 6763.01 10415.67 13368.54 15772.30 0.0% 0.1% 1.1% 3.5% 8.0% 16.8% 31.6% 48.7% 62.5% 73.7% $0 $736 $17,039 $74,574 $213,869 $539,044 $1,183,527 $2,083,134 $3,007,921 $3,943,076 Perpetuity 0.00 14.72 371.81 822.24 1784.96 3811.77 6964.03 10592.30 13505.95 15965.01 0.0% 0.1% 1.7% 3.8% 8.3% 17.8% 32.6% 49.5% 63.1% 74.6% $0 $736 $27,886 $82,224 $223,120 $571,765 $1,218,704 $2,118,460 $3,038,840 $3,991,253 Lin, Sonja. (2010) Conservation Easements as a Strategy to Retain Working Forests
  16. 16. What are Landowners Willing to Do?  Use the forestland owner survey results to determine, for a watershed, how much income would be needed to buy continued forest management  Used $200/acre/year  $70 million/year = $0.92/$1,000 = $368/yr for a $400k home
  17. 17. Concerns  Forestlands are more at risk now than ever  Loss of infrastructure, aging population, REITs, population pressure  DFL program helped to mitigate risk into the 1990s  DFL program expensive for local communities  Regulatory takings trump tax incentives 2x - 4x  Zoning – unintended consequences?  Wear et al. – between 20 and 70 ppsm Pf drops from 75% to 25%
  18. 18. Opportunities  93% of small owners willing to commit to 10 year easement for $200/acre/year, 53% for 50+  Statewide balance of tax incentive programs rather than at the county level  PSP Local Improvement/Utility Districts  Mitigation funds/markets  Development right markets (not just TDR)
  19. 19. Contact Us Luke Rogers lwrogers@uw.edu Andrew Cooke agcooke@uw.edu http://www.ruraltech.org/projects/wrl

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