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.

Yeah, but the government would have to prove it in court, which is hard and takes a long time. As long as there are a bunch of other people doing it chances are you will die of old age before law enforcement does anything about it. Lots of rich people crime works this way. Make it hard enough to prosecute and you can get away with it, especially when you can afford to hire good lawyers.

> Yeah, but the government would have to prove it in court, which is hard and takes a long time.

Isn't this "undeveloped in perpetuity" status an application, so that you have to request an agreement to your valuation and the government has to approve it, meaning that the burden of proof goes the other way from your comment? At least, for my personal residence where I have the opposite incentive, it's not that I can go to the local government with a valuation of $3.50 for my house and they have to prove it's not; I can object to their valuation and try to prove my case, but the burden is on me, not on them.