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Letter to the Editor, Washington Post, Regarding Conservation Easements
by Stephen J. Small, Esq.
Submitted By E-mail to letters@washpost.com
Letters to the Editor, Washington Post
December 22, 2003
Dear Editor:
I have some thoughts on the Sunday (12/21) Washington Post article on conservation easements, and that whole "series" in general.
1. Let's cut to the chase. The principal reason for the "bad" conservation easement transactions is the incorrect, inflated, or fraudulent appraisal that throws off an incorrect, inflated, or fraudulent income tax deduction. Why would someone do a "bad" conservation easement unless there was a big income tax deduction? The way to deal with these is to tighten the appraisal rules and standards and review process. Also, a suggestion has also been floating around that the donee of a conservation easement needs to "publicize" or otherwise make available to the public a summary of the conservation values to be protected by that particular easement. We have no reason to be afraid of airing good deals and those who do "bad" deals might be deterred.
2. This story by the Post was a bit more even-handed than earlier ones. The writers did acknowledge in more than a few places that conservation easements do some good, that most deals are good deals, that the Land Trust Alliance is trying to do the right thing, etc. For the record, and I have been doing this work for more than twenty years, probably 98% of the conservation easement transactions in the "mainstream" land trust movement are good. Important land is protected, a fair deduction is taken (sometimes no deduction is taken at all). The "mainstream" land trust movement includes all local, state, and regional land trusts and conservancies so named, as well as national groups like the American Farmland Trust, The Nature Conservancy, Rocky Mountain Elk Foundation, Ducks Unlimited, etc.
3. Many "conservation easement deals" seem to be originating in a cluster from the mid-Atlantic through the southeast (this is a generalization and a theory, supported by some facts). There seems to be a loosely-knit group of "consultants" who are pushing such deals, whether related or not I do not know. Correspondingly, it seems that most of the "conservation easement deals" in the rest of the country spring from local, scattered, unrelated bits of inaccurate information. I want to keep "examples" out of this letter but here is one. I got a call from someone in North Carolina a few weeks ago, and after the preliminaries were out of the way he said, "I have this package here, and it says that for an appraisal fee of between $50,000 and $55,000, I can get a conservation easement appraisal that…." I said, "Stop right there. I can already tell you you are being sold a bill of goods." (This is a very rough generalization, but a fair appraisal fee on the facts of this particular case could be anywhere between $2,500 and $12,500.) I don't need to tell you the rest of the story but the end is that the landowner was very very glad that he had been alerted to a bad situation and he was not going to do it. What was the problem here? Not a bad conservation easement, but a bad appraisal!!
4. I continue to believe (read my speech from the LTA ethics plenary at Rally, posted on the LTA site at www.lta.org and my site, www.stevesmall.com) that the best way for the mainstream land trust movement to counteract these "deals" is outreach and education, of board and staff, education of the constituency, and education of attorneys and appraisers and other professional and technical advisors in the service area. This education and outreach continues to be sorely lacking. The demand for private land protection, coming from landowners who care about their land, has outstripped the ability of the non-profit sector and the private sector to provide good competent professional experienced advice. Land trusts need to learn more. Good education is good education and it will also drown out misinformation.
5. The Post article quotes people as saying that deductions for conservation easement donations tend to favor the wealthy. Well, duh. That is because the way the income tax system works in this country is that income tax deductions for charitable donations tend to favor the wealthy. Generally, you can take an income tax deduction for a charitable contribution up to 30% of your income for the year of the gift, with a five-year carryforward. If your income is low your deduction is low; if your income is high your deduction is high. Some people argue this is somehow skewed. Whether it is or not, that is one of the reasons LTA has been lobbying for income tax incentives for conservation easement donations that would work better for working ranchers, farmers, and others who own land and don't have much income.
6. Fans and critics of conservation easements need to keep in mind why conservation easements and the land trust business grew so fast, in the 1980s, 1990s, and now. Landowners began to realize that governments do a terrible job of protecting open space, wildlife habitat, farmland, forestland. Landowners began to realize that the zoning map on the wall is not worth the paper it is written on because it changes all the time (from agricultural, to residential, to commercial, for example). Landowners began to say, you know, if we want to protect the open space in this area, which is integral to the quality of life in this area, we need to do it ourselves and to do that we need to start a land trust. We need to tell landowners about conservation easements. The land trust business did not get started for income tax deductions; the land trust business got started for quality of life reasons that were not being taken care of by government.
7. The Post article repeats this "theory" that conservation easements aren't a good idea because we are not equipped to make long-term land use decisions. What bosh!!! Under that theory planners should never approve a subdivision or a shopping mall!! Give me a break!! Again, one of the main reasons conservation easements have become so popular is that most governments have done (and will continue to do) a terrible job of protecting open space, farmland, forestland, etc.
8. A conservation easement will never never never never increase the value of land it encumbers. When there are a lot of conservation easements in a particular locality, land values generally might go up because people realize they will not be confronting subdivisions and strip malls everywhere they look. However, unrestricted land in that "neighborhood" will always always always be worth more than restricted land in that neighborhood.
9. Golfmak? A web site with golf course conservation easement deals??!! How many "bad" conservation easement deals have they actually done? Any? Two? Maybe the story should be that anyone can create a web site and advertise anything!!
10. Bottom line. The ways to crack down on the bad easements and allow the good, important, meaningful easements to flourish include the following. Crack down on the bad appraisals by tightening the appraisal rules. Educate people about the right way and the wrong way. Pick out for accreditation and praise (and maybe grants, etc.) land trusts and other donee organizations that pass the tests, and require them to continue to be up to date on their knowledge.
Stephen J. Small
Boston, Massachusetts
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