QACA Study Found That Limiting Sprawl Doesn’t Reduce Farmland Values

22 Feb

http://www.qaca.org/file_download/81cf31c6-8a02-46f4-9687-7007b3731628

Queen Anne’s Conservation Association (QACA) did its own study in 2008-09 with specific reference to Queen Anne’s County.  The study was conducted by William Fitzhugh Turner, a Maryland Certified General Appraiser based in Queenstown, MD who has over 25 years experience appraising all types of properties on the Eastern Shore of Maryland as well as in Delaware.

 The occasion for our study was a proposed county ordinance that would have prohibited major subdivisions on all lands zoned agricultural (87% of the county).  As Turner put it in a presentation he later made to Wicomico County, “there was a great hue and cry that reducing the density of the farmland would have a catastrophic impact on the market value of the farmland.” 

 QACA asked Turner to compare farmland values in Queen Anne’s County, where farmland can be developed to a density of one unit per 8 acres or less and there is serious rural sprawl, with neighboring Kent County, where farmland is protected by 1/30 zoning and there is virtually no sprawl.  Turner found, contrary to his own expectations, that there was no signficant difference in farmland values between the two counties.

 The study was meticulously conducted.  Having investigated and documented the comparability of the farms in the two counties in terms of soils, productivity, etc., Turner identified all transactions of 100 acres or more in both counties going back to 1997, and then removed all atypical (“restricted”) properties — i.e. family transfers, waterfront sales, properties under conservation easements, etc..  The resulting database consisted of > 80 typical sales of farms in each County.

As you will recall, some local Queen Anne’s politicians found this result so counter-intuitive that they told us they simply didn’t believe it – there must be something wrong!  But there wasn’t (3 lawyers and a planner had already cross-examined the study to a satisfactory conclusion), and the explanation for the result was not complicated. 

 Turner himself explained it later to Wicomico.  He had taken the extra step, based on his intimate knowledge of the territory, and identified, property by property, which sales in Queen Anne’s were to purchasers intending to farm the property, and which sales were to developer purchasers.  Turner:  “I . . . found that less than 15% of the sales in Queen Anne’s County were developer sales.” 

 CONCLUSION:  It was the demand of the purchasers who wanted to farm, the great majority, that was establishing the market price, not the much smaller number of purchases for development.  Based on volume of sales and price of sales, farmers drove the value of farmland in both counties, not developers.  Accordingly, restricting rural sprawl in the agricultural areas had no adverse impact on farmland valuation.

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