rogers 2010 10-27-psp_s4_south_sound_forestland_conversion

SOUTH SOUND FORESTLAND CONVERSIONSouth Sound Science Symposium, October 27th, 2010

Luke Rogers, Research Scientist, University of Washington

Integrated Statewide Parcel Data

Washington Forestland Database

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

Land Use 1988

Land Use 1996

Land Use 2004

Forest land use change ~1.8% per yearForest cover change ~0.67% per year

South Sound Land Use Change 1988 - 2004

Mixed Use118,0

00 Urban or Subur-

ban84,000 Remained

For-es-

t496,000

1978-1979 1988-1989 2001

2037 1901 1885

40123833

3389

16361662

1763

95

281In/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

South Sound Conversion Risk

What are Landowners Giving?

< 5 miles 5 - 10 miles

10 - 20 miles

20 - 40 miles

> 40 miles

$0$5,000

$10,000$15,000$20,000$25,000$30,000$35,000

Foregone Revenue for Development by Parcel Size and Distance to an

Urban Area < 10 acres

10 - 20 acres

Distance to an Urban Growth Area (miles)Avera

ge F

ore

go

ne R

even

ue

($/a

cre

)

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

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

Willingness to Participate

$0 $50 $100 $150 $200 $250 $3000%

20%

40%

60%

80%

100%

Incentive Payment ($/acre)

Lan

dow

ner

En

rollm

en

t

Willingness to Participate

    Per Acre Payment  

Contract 

Length

  25 50 75 100 125 150 175 200 225 25010-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

Contract 

Length

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 $5,165,23430 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 $4,753,56750 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 $3,943,076Perpetuity 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

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

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%

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)

Contact Us

Luke Rogerslwrogers@uw.edu

Andrew Cookeagcooke@uw.edu

http://www.ruraltech.org/projects/wrl