April 15, 2009
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The short- to mid-term economic overview presented at the conference was bleak. The bursting housing bubble has heavily impacted local forestland owners and managers--no one could recall a more dramatic downturn in forest product business cycles. Yet the openness to new concepts and willingness to talk about strategies across a variety of perspectives was electric. The conference rooms buzzed with active conversation at every break and opportunity.
A wide variety of possible strategies for improving landowner income were discussed, including biomass utilization, ecotourism, regional branding and marketing, conservation easements, umbrella FSC certifications, monetizing ecosystem services, carbon markets, and smaller mills serving local retail or niche markets.
Ironically, one of the more reliable sources of temporary cash flow for landowners attempting to maintain their property through low points in economic cycles is to sell one or more small parcels from an area of their property that is less productive or more expensive to manage. One local forester went so far as to recommend choosing a parcel with a high proportion of class I, II, or III streams to sacrifice to rural residential real estate markets in order to weather this downturn in sawlog markets. While this is counter-intuitive to those of us hoping to maintain larger intact forest parcels for both working forest and conservation values, it makes perfect economic sense given current values in the marketplace for timber vs. residential development.
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their own ownerships due to inheritance taxes, sudden severe illness, or other financial needs.
This brings us to the key issues driving the controversies over the land-use element in the current Humboldt County General Plan Update process: landowners' rights to subdivide and build residential homes on land zoned for timber and agricultural uses.
The removal or existing denial of development and subdivision rights on more productive and higher-site (i.e. faster growing) working forest lands can help to provide stability for forest landscapes on the North Coast--and support the long-term sustainability and competitiveness of the timber industry itself. Properties bought and sold for timber value alone can be sustainably managed without the additional economic pressure that comes from servicing the debt that results from timberland valuations that include the potential of development for residential real estate markets.
But we face several important hurdles before removing development value from forested parcels, even though zoning and regulatory policy is justified. While this strategy would support forest management goals and returns for future landowners, it comes at the cost of significant reductions in property values for existing landowners.
From the perspective of an advocate for community-based sustainable forest management, there are two key issues:
1) The right of rural landowners to build a residential home on land zoned for timber and agricultural production--particularly on TPZ land.
2) The right of larger landowners to subdivide agricultural and timber land to 160-acre and smaller lots and to sell parcels for rural residential use.
The Right to Build
TPZ zoning regulations define "a residence or other structure necessary for the management of land zoned as timberland production" as a "compatible use."
I am not a legal grammarian. Simplistically "or" is a conjunction that typically indicates a choice among alternatives: you can have "a residence" or you can have an "other structure necessary for the management of the land." It's certainly defensible for us laypersons to think the phrase "necessary for the management of the land" refers to the "other structure," and that the sentence as a whole implies that the term "a residence" stands alone as a "compatible use" which requires no modifier. While I nitpick, many landowners' future property values hinge on just such an interpretive process.
Regardless of the correct legal interpretation for the past thirty years, this sentence has been interpreted in practice to allow owners of parcels zoned for timber production to build a house on their property. Many such homes have been built. Many such homes have been assessed as improvements on the county's property tax rolls. Many such homes have been granted building permits.
Humboldt County's real estate transaction apparatus--from brokers to appraisers and lawyers--has treated residential use as an assumed value on forested parcels. Over the past two decades development value has begun to eclipse timber values on even the largest and most productive industrial and non-industrial ownerships.
Virtually all smaller TPZ parcels have been bought, sold, and appraised at values that assume the new owner will have the right to build a home on the property. In the past decade or so, valuations based on comparable sales have established real estate values for small parcels of productive timberland that far exceed any value that can be generated through timber management alone. If a prospective buyer, concerned about potential restrictions on the property due to the TPZ designation, consulted a real estate broker, lawyer, or other real estate professional in an effort to carry out due diligence on the value of their purchase, they would have been assured that building a single home on their TPZ parcel is considered a compatible use, with many county-approved examples for evidence.
The Right to Subdivide
Curiously, there is nothing to stop a landowner from surveying their property, subdividing it, selling the resulting properties to new owners, and recording a grant deed at the county courthouse with a description of the survey that defines the new parcel. At this point the new owner has legal title to an illegal parcel not recognized by the county planning department.
Many if not most of the larger ownerships also retain underlying patent parcels. Patent parcels date from a time when the federal government surveyed public lands and established a description of parcels laid out by township, range, and section. Homesteaders who established ownership of the parcels were given land "patents" by the federal General Land Office that granted them the tracts "to have and to hold the same, together with all the rights, privileges, immunities, and appurtenances, of whatsoever nature, thereunto belonging." Most of the larger ownerships in Humboldt result from the aggregation of these "patent" parcels.
For a parcel (including patent parcels) to be considered a legal parcel by the county, it has to go through several steps. The first step is a determination of the legal status of the parcel. If the parcel was created prior to the passage of the 1984 Subdivision Map Act and was in compliance with zoning regulations in place at the time, the county issues a certificate of compliance acknowledging the parcel as legal. You can now go forward with lot line adjustments, applications for building permits, or even subdivision proposals, depending on your zoning.
For owners of larger parcels with a TPZ designation, subdivision of timber property to parcels of 160 acres is currently allowed under TPZ rules. Many such parcels have been granted certificates of compliance by the county. Even smaller parcels can be created through the use of a "joint timber management plan" that links contiguous parcels into a management unit of 160 acres or more and demonstrates that timber harvest on the resulting parcels is logistically feasible.
Where Do We Go from Here?
For the past thirty years the Humboldt County real estate apparatus has established transactional values for productive working forests that assume landowners have a right to subdivide down to 160 acres or lower, along with the right to build at least one home on each legal timber parcel. These practices were in place at the time we began the General Plan Update process. These practices were in place when Palco filed its Kingdoms Come reorganization plan in bankruptcy court a year ago last October. These are the practices that were in place when the county Board of Supervisors passed the temporary emergency moratorium on building permits on TPZ land in late 2007.
If we focus exclusively on maintaining property rights and values for existing landowners, then we promote ongoing economic pressure to subdivide and fragment existing working forests. This results in the steady incremental erosion of the accessible base of supply for local timber mills, along with open space and conservation values across the landscape. These mills provide the markets that enable the resource-based economic activity that supports the open working landscapes that define our rural quality of life. In essence, by capitalizing on residential value, landowners run the risk of eroding the viability of a key source of income for maintaining their working forests, like a snake eating its tail.
Yet if we precipitously change existing interpretations of landowner rights to subdivide and/or build on land zoned for timber production, we undermine the economic viability of the landowners themselves--adding to the increasing and ongoing economic challenges facing sustainable forest managers, particularly for Douglas-fir properties.
Effective strategies to support and maintain conservation values and intact working forests need to include more than zoning objectives that limit uses and activities on timber and agricultural lands. As evidenced at the FFII conference last month, we need to develop a more comprehensive strategy to support the economic viability and long-term stability of our open spaces and working landscapes.
If we, as a county, share a goal of maintaining healthy and productive working forests, it is reasonable for the county to define transitional land-use policies that will help us to achieve that goal. Restricting subdivision and development rights on our core productive timberlands can help to stabilize long-term timber supply, maintain open space, and support conservation values. But it will also cause a significant reduction in property values on core working forest parcels. How can we distribute the burden of this drop in landowner property values fairly among all the beneficiaries of reaching this shared objective?
We need to develop the tools that can help us to achieve a balance between protecting the basis of our resource-based economic sectors and responsible rural residential development. Some possible tools include: Clustered Planned Unit Developments on appropriate rural properties; Tradeable Development Rights; Conservation Easements and working forest acquisitions funded through a county-wide Open Space District; and Restoration Zoning to minimize the impact of human presence on the landscape.
None of these programs are silver bullets, but if we intend to protect and maintain our rural quality of life, we need to move beyond nitpicking the code. We need to begin and continue the conversations that will enable us to directly address each other's legitimate concerns. We need to move beyond letters to the editor and the three-minute input process to a format that will encourage and support our efforts to develop effective strategies to reach shared goals on the Humboldt County landscape. As the conversations emerging from Future Forests II indicate, we may have more in common than we think.
For more information: PO Box 1580, Redway, CA 95560
707/923-7004,
jrogers@newforestry.org
www.newforestry.org
John Rogers is a 35 year resident of Southern Humboldt whose involvement with forestry issues emerged through| his role as a woodworker and sustainability advocate. A member of the founding Institute for Sustainable Forestry board in 1991 John's writing focuses on the economic nuts and bolts of walking the talk of long-term sustainable forest management.
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TOC for Forest & River News, Spring 2009