Land Conservation: Incentives, Acquisitions and Easements

Land conservation - the practice of holding land open and free of development - has become a significant real estate activity in the United States. Since 1988 voters across the country have approved spending around $54 billion on land conservation in state and local ballot measures, according to the Trust for Public Land. Additional private money is spent on conservation through non-profit land trusts and conservation by individuals and corporations. Land conservation has become an important component of smart growth efforts, as well as for environmental protection and recreational opportunities.

Understanding the purpose, various techniques available and other issues associated with land conservation is essential for real estate and appraisal professionals. Land owners may receive benefits for conserving their land, but must also be aware of costs and potential issues. Sale of land for conservation may have additional benefits. Land conservation programs can have significant impacts on real estate markets, valuation, and can affect the use of adjacent land as well as the land being conserved. Implications for long term maintenance cost, valuation and taxes may be complex and substantial.

Many land conservation actions attempt to preserve the land in a natural condition to achieve environmental benefits. Other approaches may intend to preserve agricultural use rather than a natural environment. In any case, the overriding objective is usually to work cooperatively with property owners to limit urban development in order to achieve other public goals.

Land conservation actions can be as simple as an individual landowner deciding not to develop land, but instead preserve the natural environment. Land conservation can occur with relatively simple easements on private property that prevent future development. Easements can be sold, exchanged for other land, provide tax reductions, or granted for a variety of other considerations. Conservation can also occur through fee simple purchase of land. Purchase might be based on the full market value or for another negotiated value allowing some continued use or tenancy by the seller.

Government agencies are typically involved in land conservation efforts. Other non-governmental organizations (NGOs), such as non-profit land trusts and other conservation organizations may be partly or solely involved. In more complex circumstances, all the governmental and NGO entities and available tools may be used in some combination to conserve larger properties or areas.

The basic conservation tools are:

Personal action - efforts on the part of individual land owners to conserve their land because it benefits quality of life for themselves and the public. Historically, farming and ranching has maintained open land as an inherent part of the land use. Today, some individuals are acquiring and operating farms and ranches specifically for conservation purposes. Ted Turner is perhaps the best known, and is the largest private landowner in the United States. His working ranches are economically viable businesses that simultaneously support conservation goals, including water resource management, reforestation and reintroduction of native species.

Land acquisition - fee simple purchase of the land by government, land trusts, other conservation organizations or voluntary donation by the property owner. An acquisition example is the Richardson's Bay Sanctuary, located on the edge of San Francisco Bay in California. The Audubon Society purchased submerged and upland areas to provide habitat for wildlife and migratory water birds.

Conservation easements - these are legally binding agreements that limit uses and development of a property and protecting the ecological values of the property for public benefit. This is accomplished through either through voluntary sale by the property owner or grant. Conservation easements are the most commonly used conservation tool. Anyone interested in participating in a conservation easement should carefully review the conservation easement information found through state and local government resources, including a detailed review of the policies and procedures.

Financial incentives - other benefits provided by government to the property owner to conserve the land, such as special tax districts for open lands, tax rate reductions or deductions, or allowances to transfer the development potential to another location. Financial incentives typically work in combination with other tools such as conservation easements. Financial incentives such as reduction of inheritance taxes may be essential for land owners to maintain an existing use, such as farming or ranching and pass the land on to descendants.

Risks Associated With Land Conservation

All parties involved in land conservation assume some risks, such as:

  • Property owners entering into conservation easements limit the future use of the land; in most cases they won't be able to change their minds later. Tax benefits of conservation might be initially attractive, but future legislation could change those benefits. Depending on the structure of the easement, the land owner could be responsible for some maintenance with unanticipated costs.
  • The easement holder, such as a land trust, pays the cost of acquiring the easement, and may assume obligations to enforce the easement and, again depending on the specific easement, long term maintenance. They run the risk of unanticipated long term costs, and maintaining a cooperative working relationship with the current and future land owners. Unanticipated impacts to the easement area might reduce the value of the easement.
  • The public may risk similar unanticipated long term costs, as well as affects on tax base and revenues. In some cases acquisition of open space land may unexpectedly limit some future options if adequate long range planning is not first done.

Management of these and other risks indicates that all parties should exercise caution, and consult with appropriate professionals. The services of attorneys, accountants, appraisers, REALTORS and land planners may be needed, as well as coordination with government agencies and conservation organizations. The unique attributes and complexity of land conversation issues highlights the need for experienced professionals.


  • Planning for large scale conservation must consider implications to the local tax base and revenue; if public land acquisition is the preferred approach, the tax base may shrink with less private land, but remaining private land values may increase, providing an offset.
  • Property owners donating conservation easements may qualify for property tax reductions and income tax deductions; they should be cautious about ensuring they meet all applicable guidelines for claiming tax benefits.
  • Conflicts can result between active and passive recreational uses of open space; conservation actions should clearly identify the purposes of conservation and the uses consistent with those purposes in order to avoid conflict.
  • Long term maintenance of open space is a significant cost consideration that should be included in any conservation action.

Make sure that any professional you are working with is well educated in both the process and the law before engaging them in any conservation easement action.

Written and Published by: VanEd

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