Making money from Conserving land

It’s a truism that land sold for property development makes more than land sold for agriculture or as woodland. In Butler county you can get maybe $20,000-$30,000/acre plus, for land with development rights on it, as opposed to maybe $8,000/acre for agricultural land.  But ... we are lucky that mechanisms have been devised to allow property owners to both keep their land for agriculture or conservation  and make money off the development rights. Thus, building a larger community with more tax revenue through development and conservation can go hand in hand.

Four Tools for Townships

1. Agricultural Easements

In Pennsylvania, agricultural easements are legal agreements that restrict the use of land to protect its agricultural value.  These voluntary contracts typically involve a landowner ("granting party") and a conservation organization or government agency ("holding party").  The easement is recorded with the county, becoming a permanent part of the property's deed, binding future owners. Basically the landowner sells the development rights to the holding party but retains the ownership of the land to hold or sell later.

The cash value of an easement is determined through a formal appraisal conducted by a qualified, independent appraiser who is experienced in valuing easements. 

The most common approach is the Before & After Value method. The appraiser estimates the fair market value of the property before the easement is placed on it, and then estimates the fair market value after the easement is in place.  The difference between these two values represents the value of the easement. So, if your land could have been sold to a developer for houses that would make the cash value of the easement $30,000-$8,000=$22,000 per acre.   

Benefits for landowners include tax advantages (potentially lower property taxes), preservation of family farmland, and protection against unwanted development pressures.  For the holding party, easements secure agricultural land, safeguard natural resources, and support the local food system.

Pennsylvania offers various programs and resources to facilitate the creation and management of agricultural easements, including the Pennsylvania Farmland Preservation Program, which provides funding for easement purchases and is administered for us by Butler County. 

2. Conservation Easements

A  land conservation easement is a legal agreement between a landowner and a qualified conservation organization or government agency.  This agreement permanently restricts the development or alteration of a property's land, protecting its natural, scenic, historic, or agricultural resources.  The landowner retains ownership of the property but gives up certain development rights. As with Agricultural Easements, the landowner will receive the Before-After value of the land for each acre conserved.

These easements are voluntary and recorded in the county's deed records, ensuring they bind future owners.  They can protect a variety of features, including forests, wetlands, farmland, and historic sites.  Common restrictions might limit building construction, road construction, or timber harvesting, while allowing for existing structures and sustainable agricultural practices. Read more about conservation easements here. 

Pennsylvania offers various tax benefits for donating a conservation easement, significantly reducing property taxes.  The Pennsylvania Department of Conservation and Natural Resources (DCNR) plays a key role in reviewing and approving easements to ensure they meet specific conservation goals and are properly structured.  Several land trusts also work in the state facilitating these agreements and providing ongoing stewardship.  The result is lasting protection for Pennsylvania's valuable natural and cultural heritage.

3. Mitigation Banking

Mitigation banking is defined as:  The restoration, creation, enhancement, or preservation of a wetland, stream, or other habitat area undertaken expressly for the purpose of compensating for unavoidable resource losses in advance of development actions, when such compensation cannot be achieved at the development site or would not be as environmentally beneficial. 

To mitigate means to reduce the severity of something. In this case, mitigation banking is reducing the damage caused to the environment. When a development is likely to damage an ecosystem, the loss is mitigated by preserving a comparable ecosystem in a different area.

A mitigation bank is a site developed for such a purpose, whereas the person or entity undertaking such restoration work is referred to as a mitigation banker. Just as a commercial bank has cash as an asset that it can loan to customers, a mitigation bank has mitigation credits that it can eventually sell to those who are trying to offset mitigation debits. Generally, these purchasers of mitigation credits are individuals or entities undertaking commercial projects. 

So, you could apply to have the area alongside your stream/river improved for conservation, have that strip of land ecologically improved (usually 100ft either side of the stream), have the improvements paid for by the Mitigation Bank,and receive a fee in lue of the development rights you would be foregoing. 

The Pennsylvania Department of Environmental Protection (DEP) reviews and approves mitigation bank proposals, ensuring rigorous scientific standards are met.  Credits represent the ecological value of the restored or created habitat; one credit typically offsets one unit of impact. The credits stay with the Mitigation Bank to sell on, but they pay you a fee for them.

 Here’s a list of approved Mitigation Bank providers in PA.

4. Transfer of Development Rights (TDRs)  (This term is more often used than Developing Rights Transfer or DRT.)

"Transfer of Development Rights" (TDRs) is a market-based system where landowners can sell their development rights from a designated "sending area" (typically land meant for conservation) to developers in a "receiving area," allowing them to build at a higher density than normally permitted, essentially enabling the preservation of land in exchange for increased development potential elsewhere; it's a voluntary process that incentivizes land conservation through market mechanisms

Pennsylvania's Transfer of Development Rights (TDRs)  mechanisms, primarily governed by the Pennsylvania Municipalities Planning Code (MPC), allow landowners with development potential to sell or transfer their unused development rights to other landowners.  This facilitates development in designated areas while preserving open space or environmentally sensitive land in other locations.  

Butler County utilizes TDR mechanisms, primarily through its Agricultural Security Area (ASA) program, to preserve farmland and open space.  This program allows landowners within the ASA to sell their development rights, relinquishing the ability to build beyond current zoning allowances, to developers in designated receiving areas.  Transfer of Development Rights (TDRs) can be used to preserve farmland in Pennsylvania. 

How TDRs are used

• Selling TDRs: Municipalities can sell TDRs to developers in exchange for funds to preserve land. 

• Banking TDRs: Municipalities can bank TDRs until they are needed by developers. 

• Joint TDR programs: Municipalities can work together to create joint TDR programs. 

Balance between growth and development and protecting the environment and natural resources, can be a win-win for all.  TDRs are a tool that townships need to properly grow the township, maintain the rural character, and protect the environment.  

The sale generates income for the landowner, incentivizing them to keep their land in agriculture.  Simultaneously, the buyer gains the right to increase density or build on a lot in the receiving area, exceeding typical zoning restrictions. This is a win-win scenario: preserving prime farmland while allowing for higher-density development in strategically chosen areas, potentially mitigating sprawl. Clinton Township, our neighboring township to the east, supports their farmers and encourages their participation in this program and has set up a Farmland Preservation Program and Ag Security to assist the farmers within their township.  In a cooperative effort with Clinton Township using their own development fees, the township has begun their own preservation program. This removes Clinton Township farms from the “countywide” list, reducing competition in the program.  A similar program could be adopted by Middlesex Township as a tool to assist farmers who want to preserve their farmland.