Corbett's Cuts Could Hurt Farmland Preservation

While Governor Tom Corbett's higher education cuts have received most of the attention in recent debates over his budget proposal, other important and controversial changes have been overlooked.

In an op-ed last Friday, Rep. Greg Vitali flagged some changes that would be harmful to the environment, including a proposal to permanently eliminate $20 million in funding for Pennsylvania's Farmland Preservation program. 

This program has broad support from the voters, who are rightly concerned about the New Jersification of Pennsylvania's remaining open space and natural areas, but Governor Corbett will almost certainly be unwilling to raise more revenue or cut spending on weaker claims in the budget.

That means local farmland preservation supporters are going to need to find another funding source if they don't want the Lehigh Valley's remaining cornfields to get snapped up by Big Box retail and McMansions.

Fortunately, there is a way for local governments  to permanently preserve farmland and open space, while cutting spending, cutting taxes, and creating not just affordable, but abundant housing and office space in the LV's three core cities.

First, a little background.

Last week, Zach Lindsay at the Express Times had an interesting article about Williams Township seeking landowners to participate in its farmland preservation program.

Here is how he describes it:

Landowners who participate in the program sell the township their right to develop the land. The township pays a fair market value for the property, but landowners are allowed to stay on the property and farm it or use it for grazing or other purposes.

The good news is that the program works. The township has preserved over 200 acres of farmland in just the past year, according to Township board member George Washburn.

The problem is that all that preservation has a cost, a visible cost in that taxpayers are paying extra earned income taxes to buy up all these development rights.

But there is also an invisible cost that shows up as higher housing prices and commercial rents, not only in Williams Township but throughout the whole region.

If the township keeps buying up all these landowners' development rights, but then not using them to build anything, that's going to increase development pressures on the areas where you're still allowed to build housing.

That's all fine if developers are actually allowed to build the same amount of housing in the remaining areas that still have their development rights. But oftentimes strict zoning regulations prevent the supply of housing from keeping up with the need for housing, leading to high rents.

All these successful farmland preservation programs could end up making the Lehigh Valley's housing unaffordable.

Now imagine if Williams Township, having bought up all these development rights bucks, could then sell them to developers who do want to build the x square feet of housing and y square feet of retail that the taxpayers bought.

Williams Township voters don't want the development, but there are other municipalities who want to host more development, in the interest of growing their population and their tax base.

If Northampton County were to establish an exchange - called a Transfer of Development Rights Bank, or TDR Bank - where people who want to sell their development rights could come together with people who want to develop land, it would be possible to "send" the foregone farmland development in Williams Township to vacant or underutilized land in Easton and its environs.

Eventually, with enough landowners and developers utilizing the TDR Bank, development rights bucks would essentially become the currency of the Lehigh Valley real estate market.

This would be superior to the existing farmland preservation programs in a few key ways:

• First, no taxpayer money would have to be used for farmland preservation. Developers would buy the development rights from farmers through the TDR Bank, not taxpayers. The Township, and the County, would be able to roll back the tax increase voters approved in the ballot referenda.
• Second, it would ensure that housing remains affordable. Instead of the farmland preservation program shrinking the total amount of housing that can be developed across the region,  the TDR Bank would ensure that the total amount of developable square footage stays constant. The housing that doesn't get built on cornfields will still get built somewhere else in the County.
• Third, it would bring some strategic order to development patterns in the Lehigh Valley. A TDR Bank would make it much easier for people who want to sell their farmland development rights for cash to do so. Currently the volume of development rights that get purchased from landowners hinges critically on voters' willingness to pay the taxes necessary to fund the program. All told, government's just not devoting that much money to doing farmland preservation.

But once you create the development rights bucks, the demand for farmer's development rights is going to be stronger. Developers are going to be interested in buying a lot more development rights bucks than taxpayers are.

And for the "receiver" city, this is a huge win for the downtown economy and the local tax base. As I've argued here on a number of occasions, higher job density and population density are correlated with a laundry list of positive indicators, including a , higher GDP and wages, greater walkability, and a wider variety of retail and entertainment choices.

Best of all, it would increase the political pressure to make the Lehigh Valley Planning Commission's Comprehensive Plan legally binding on municipalities.

The biggest practical obstacles to the creation of a TDR Bank are the differences in zoning laws across all the different municipalities, which would complicate developers' ability to find enough parcels where it's legal to build mid-rise mixed-use buildings.

Having a simple, predictable comprehensive land use plan for the whole region would alleviate this problem, making it easier and less costly to develop urban land, while greatly reducing development pressure on the remaining open space and natural areas.