Buyer-Type Effects in Conservation and Preservation Property Values

Abstract

Properties can be bought by government agencies, land trusts, or private entities for conservation and preservation purposes, such as farmland preservation, wildlife refuges, other conservation, and cultural and historical preservation. There is variation in the dollars paid per acre across properties and across buyer type. An option value model based on future potential land uses is used to explain much of this variation. The data used in our analysis is sales transactions data for conservation and preservation purposes from throughout the United States. We find that much of the value of conservation properties is derived from future potential land uses, including housing, timber, recreation, and conservation. We confirm that public versus private buyers value options differently, which makes sense from a public good point of view, if markets are thin. Copyright Springer Science + Business Media, LLC 2006Land value, Preservation property, Option values,

The impact of buyer‐type on house price

“…Lambson (2004), for example, provides evidence that buyers from out-of-state pay more for apartment buildings in Arizona than do in-state buyers. Winfree et al (2006) report a variation by buyer type in dollars paid per acre for property destined for conservation and preservation purposes that were acquired either by a government agency, land trust, or private entity. In our opinion, there is a high probability that all buyers in both these studies were more sophisticated than the typical home buyer.…”

Factors influencing property selection for conservation revolving funds

“…In some cases, covenants may have a low impact on financial value, although the effect is uncertain (Winfree et al. ). Aside from risk‐averse purchasing, the mechanisms behind fund sustainability are unclear.…”

“…active searches for and marketing to conservation buyers Unable to meet conservation goals low purchase frequency due to overemphasis on financial returns or fund sustainability mapping of areas where conservation and fund sustainability objectives coincide consideration of accepting financial loss for some properties (establishing clear criteria for which this is acceptable) low purchase frequency due to limited supply of suitable conservation properties active searches for conservation properties emphasis on resale potential means some ecosystem types or properties with high conservation values would not be suitable consider other conservation tools (e.g., acquire or voluntary covenant) for high-conservation -value land not suitable for revolving fund (e.g., ecologically sensitive properties, those with high management requirements) ecological impact from residential development designing the covenant agreement in a way that limits the impact on important conservation areas of properties attract those willing to pay a premium for conservation properties. In some cases, covenants may have a low impact on financial value, although the effect is uncertain (Winfree et al 2006). Aside from risk-averse purchasing, the mechanisms behind fund sustainability are unclear.…”

Purchase, protect, resell, repeat: an effective process for conserving biodiversity on private land?

“…Moreover, a conservation agreement that restricts development rights has the potential to diminish property values, suggesting that managers would have to consider selling properties at a financial loss on occasion, although the effects of these types of agreements on property values are uncertain (Winfree et al . ). Social factors are also likely to influence the success of PPR programs, partly in relation to the characteristics of individual properties (eg aesthetics, location) but also in terms of how buyers perceive the relative novelty of owning property of high conservation value (Corcuera et al .…”