For Some, State Land Plan Provides “Aha!” Moment

As the DNR continues its process of regional meetings and public comment on its recently released Land Management Strategy (a.k.a. Land Plan), some surprising reactions have already been noted.  Most of us fully expected that the comments received from some northern Michigan residents and most locally-elected officials would be, “enough is enough,” and “we already have too much  public land.”  What we didn’t see coming, however, were those who have said, “We sure hope that you don’t sell off a bunch of public land and depress our already-low land values!”

Perhaps most surprising was that this epiphany was shared by some of the biggest critics of the DNR’s past land management practices, as well as others in the real estate community.  It seems that some now realize the potential implications on local land values if the State were to release the one-quarter of a million acres referenced for public sale in the Land Plan. Although this would represent only slightly over 5% of the total state land portfolio, if it is land you use, or near your family camp, this percentage becomes irrelevant.

This is one of the points that many attempted to make during last year’s Land Cap Bill debate.  There is no shortage of land for development or for private recreational use.  In fact, just the opposite is the case.  Estimates that we have prepared for our professional use suggest that based upon current rates of market absorption, most northern Michigan markets currently have a 5 to 7 year supply of land currently available for sale, even if no new parcels were added to the market.  This condition would be further exacerbated if the “second tier” inventory were ever to make its way to the market. This represents those lands which people would LIKE to sell, but have no interest in doing so at current price levels. 

Even if you are not involved in these matters professionally, most of us realize that nearly every northern Michigan community has at least one community-sponsored industrial park that has development lots available.  In many instances these are available for little or no cost if a business is willing to commit to a defined level of job creation.  There also seems to be an endless supply of residential lots available in failed subdivision projects which continue to cost all of us in the form of mortgage forfeiture and bank liquidations by federally-insured institutions.

The point is just this.  None of us knows exactly how much public land is too much, nor do we know what the true value of our current inventory is, not only in an economic sense but to our quality of life as well.  To answer long term questions pertaining to public land ownership, we need to continue to call for better research and data upon which to base these decisions.

Absent the kind of in-depth economic analysis which is needed, even a quick “back of a napkin” calculation provides some pretty compelling results.  As we mentioned in a post last September regarding Michigan’s estimated 18.5 billion dollar annual tourism economy, the return on our investment in public land appears to be a quick one.  If we were to conservatively assume that just 10% of this $18.5 billion total is attributable to the presence of State Parks and Michigan-owned/managed public land, $402 per acre in total revenue would be suggested ($1,850,000,000/4,600,000 acres = $402/acre). If we were to assume a land ownership replacement cost of $3,000 per acre –  an amount which considers riparian ownership –  this would suggest a 7.5 year payback ($3,000/$402 = 7.5 years).  Even at an assumed replacement cost of $4,000 per acre, the payback period is only 10 years. If we were to add in the economic benefits of the State’s forest lands to Michigan’s $12 billion timber and wood products industry, and the $6+ billion associated with hunting and angling, this 7 to 10 year payback calculation may even be halved.

We won’t pretend to suggest that this informal narrative in any way constitutes a comprehensive cost-benefit analysis of public land ownership.  It does, however, reinforce the need for a study prepared by a qualified and credible third-party who can help to provide answers to these questions in response to what we believe in many cases is a false hypothesis. When it comes to our state’s natural resources, there are many ways we should be measuring how “green” our lands are.

While the Land Plan does effectively lay out priorities and values to be considered in both the acquisition and disposal of public land, more detail on the process for both should be encouraged. As has been done in past DNR land consolidation efforts, public comment and engagement should be made an integral part of any future land disposal initiative.

The public comments on the Public Land Management Strategy can be made via email through: DNRlandplan@michigan.gov.  The public comment period on the draft the ends April 30^th.

P.A.R.