I. Introduction

Two centuries ago, President Thomas Jefferson doubled the land area of the United States by acquiring from French Emperor Napoleon Bonaparte some 825,000 square miles of strategic territory extending west of the Mississippi River to the Continental Divide. Now regarded as the “best land bargain ever made,”[1] the Louisiana Purchase was not without critics. Nor in the years since has debate over the role of government in land matters lessened.

The dispute in Jefferson’s day centered on whether the U. S. Constitution authorized the president to purchase land. The Federalists, in particular, insisted not, and warned that the fledgling nation could ill afford so massive an expansion. Today, the federal and state governments combined own 40 percent of the American landscape, an inventory of 704 million acres, or 25 percent more territory than the Louisiana Purchase.[2] And, in an intriguing twist of history, some citizens are now more concerned about a lack of open space rather than too much of it.

This concern is manifest in the multitude of land-use controls enacted throughout the country. Michigan is no exception. Democratic Gov. Jennifer Granholm convened a Land Use Leadership Council barely a month after taking office – with the blessing of the Legislature’s Republican leaders. At the local level, farmland and open space preservation initiatives are increasingly common, in addition to a variety of programs already administered by the state Departments of Agriculture and Natural Resources.

But good intentions do not necessarily translate into sound policy. Real-world experience must be taken into account. This study is offered in the spirit of informing Michigan citizens, their representatives and state policy-makers as they confront land-use issues.

The governor’s Land Use Leadership Council, for example, is proposing an expansion of Michigan’s principal farmland preservation program as well as more centralized land-use planning. Under the preservation program, tax credits totaling nearly $800 million have been granted to owners of 45 percent of farmland statewide in return for maintaining agricultural production and resisting development.

The program has failed to fulfill the goals established by its architects, according to our analysis. The bulk of credits have been applied to farmland distant from development pressures. Simply put, these preservation tax credits have had little effect on stemming the conversion of farmland to other uses. Instead, the program mostly benefits the farmers least likely to develop their land. These results cast doubt on the notion that government can improve the environment effectively through so-called market-based mechanisms.

In conducting the study, the following questions were posed:

  1. What is the extent of development in Michigan?

  2. What values underlie our land-use patterns?

  3. What state preservation initiatives are currently in place?

  4. Has the state’s farmland preservation program achieved its goals?

  5. To the extent farmland preservation programs are favored, how can they be improved?

Each question is addressed in subsequent sections of this report.

No assessment of the farmland preservation initiative has been undertaken by the Michigan Department of Agriculture, which administers the program, or by any other state agency. However, officials of both the Departments of Agriculture and Treasury did provide some of the data used in our analysis. Further research is needed to likewise determine whether other government land-use initiatives are beneficial.

The preservation impulse is understandable. Michigan features 3,000 miles of Great Lakes shoreline, 11,500 inland lakes and millions of woodland acres teeming with flora and fauna – a soothing complement to the state’s industrial ego. Indeed, more boats are registered in Michigan than in any state in the nation, while hunters jam the highways heading north every autumn weekend.

The state’s natural bounty notwithstanding, most of us experience daily more asphalt than aspen. Of course, compared to the gritty city life of our grandfathers, ours is a veritable Garden of Eden. For all the complaints about traffic congestion, strip malls and new subdivisions, less than 10 percent of Michigan land actually is urbanized,[3] leaving nearly 34 million acres largely undeveloped. Only 6 percent of the land area of the continental United States, in fact, has been paved for roads and highways, or cleared for military, residential or commercial uses.[4]

The expansion of government into so many aspects of American life may mislead some into thinking that environmental transformation, justified or not, simply requires additional regulation. Indeed, legislators have introduced no fewer than 98 bills on environmental matters in the past six months, according to a search of the legislative tracking website MichiganVotes.org.

When government attempts to manipulate land use through programs such as farmland preservation tax credits, a host of unintended consequences result. Myriad factors drive the supply of and the demand for land – factors that change with lightning speed compared to the sluggish tick of the bureaucratic clock. Government-run programs are further complicated by the compromises inherent in the political process.

Moreover, private property rights – a fundamental human right in a free society – are undermined when the state attempts to dominate the landscape. Or as economist Terry L. Anderson notes, “Governmental control … means political control.”[5]

Special interests drive policies that increasingly treat land as a public good, thereby encroaching on landowners’ control of their own property. In decades past, the common law effectively prohibited a property owner from imposing a nuisance on his neighbors. Today, instead, dozens of federal, state and local regulations curtail the property rights that the Founders regarded as essential to thwart tyranny and thus preserve liberty.

There is no shortage of evidence that government, no matter how well-intentioned the policy, is a far less effective environmental steward than are individuals who have a personal stake in their own property.

“Control of resources by politics and bureaucracies does not bring the same pressures and personal incentives to innovate, to conserve resources, and to avoid damage downwind and downstream that private ownership and market decisions do,” according to Richard L. Stroup, former director of policy analysis for the U.S. Department of the Interior. “Political and bureaucratic decisions tend to be less efficient, more wasteful, and thus less environmentally friendly.”[6]

A well-ordered approach to public policy does not assume that more governmental control is the solution. It is far better to consider how best to harness the power of private property rights to enhance environmental quality. This becomes particularly important in light of Michigan’s budget constraints and the state ’s inability to adequately maintain its huge land inventory.

This goal is in accord with the Clinton administration’s Council on Environmental Quality, which concluded: “Shifting economic priorities, government deficits, and greater demands for a lessening of the tax burden on the private sector all suggest that the policies of recent decades, of primary reliance upon the public sector to protect and preserve the country’s natural resources, will no longer be sufficient to the task. We will have to rely heavily upon private landowners and organizations to play a greater and greater role in protecting these resources.”[7]