American Prairie unlocks another 70k acres in Montana

America needs more land that’s under stewardship of people who want to conserve it for the future. We’ve lost so much native biodiversity, but there’s still pockets that can revive it if managed appropriately.

In the early 80's, Congress passed some laws that allow people to buy undeveloped land, and declare it to be undeveloped for perpetuity (no one can develop on it even if sold). The owner gets some tax benefits from doing so.

It became a niche segment in the real estate. The idea is you find land that is cheap, but you have a feeling it has mineral wealth. You buy it cheap, get the survey done, and show that it was really worth a lot more. But instead of building a mine/oil well, you declare the land undeveloped for perpetuity. The tax benefit you receive is commensurate to the (now highly increased) value of the land.

You make a profit this way, and the environment benefits.

It's a very risky part of real estate. There are lots of environmental groups who closely monitor the land, and will file a lawsuit if they suspect you are developing on the land. Fighting lawsuits is part of the risk.

Anyway, the person who did the presentation showed some interesting statistics. Supposedly, for every 10 acres of land that is developed in a given year, roughly 9 acres are declared undevelopable for perpetuity. That's really significant (if true).

This segment is not as niche as it used to be and is frequently abused for enormous tax benefits now. There doesn't need to be any real economic or environmental value to the land, you can just pay someone to do a fake survey/appraisal and assign an astronomical value, and then not pay any taxes because you're now forgoing all that fake value with your conservation easement.

> One example: the former Millstone Golf Course outside of Greenville, South Carolina. Closed back in 2006, it sat vacant for a decade. Abandoned irrigation equipment sat on the driving range. Overgrowth shrouded rusting food and beverage kiosks. The land’s proximity to a trailer park depressed its value. In 2015, the owner put the property up for sale, asking $5.8 million. When there were no takers, he cut the price to $5.4 million in 2016.

> Later in 2016, however, a pair of promoters appeared. They gathered investors who purchased the same parcel at the market price and, with the help of a private appraiser, declared it to be worth $41 million, nearly eight times its purchase price. Why? Because with that new valuation and a bit of paperwork, the investors were suddenly able to claim a tax deduction of $4 for each $1 they invested.

- https://www.propublica.org/article/conservation-easements-th...

I think the law is still a good idea, but like many things it has been ruined by the rich and will need to be reformed or eliminated.

Wouldn't that just be straight up fraud?

They just bought the land for $5.4 million, that was clearly the actual value.