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Farmland development rights in Suffolk County, New York began in 1975 in Suffolk County as the state of New York began a program to purchase development rights for farmland to insure they remained as farms and open space rather than being developed for housing.
Suffolk County, New York, comprises the eastern portion of Long Island and borders Nassau County on the west. The remainder of Long Island is occupied by Queens County and Kings County, which are part of New York City. Suffolk County is more than 80 miles (130 km) long and 20 miles (30 km) wide and encompasses 922 square miles (2,388 km2). With its close proximity to New York City and amenities prized by land developers, Suffolk County was ripe for intensive development.
The program involves purchasing from landowners what the county has defined as "development rights." Development rights are all of the property owner's rights, title, and interest in the property except raw ownership, the right of possession and the right to use the property for agriculture. The program involves the solicitation by the county of bids on a voluntary basis by property owners interested in selling the development rights of their property to the county. If a bidder's offer is accepted, the county pays to the bidder the sum of money equal to the appraised market value of the development rights by certified check, assuming that, following a title examination at county expense, it is determined that the bidder can convey good and marketable title, free of any encumbrances, to the county for his development rights.
The program does not require any bidder to offer the development rights to all of his property. He may offer such rights for all or part of his ownership. The concept provides an extraordinary opportunity for imaginative and innovative preservation techniques at minimum risk. For example, it is possible that a farmer [1] who owns and operates his farm could readily sell his development rights to the county, retaining the agricultural title to his own land, while using the proceeds of the sale of his development rights to acquire the agricultural title to adjoining land or land within reasonable proximity suitable for expansion of his farming activity.
The concept is attractive to farmers anxious to remain in the agricultural industry in Suffolk County, but hard-pressed by periodic cash shortages and ever increasing real property taxes, as well as the threat of extensive complications and problems of liquidation upon the death of the farmer.
Through the sale of the development rights, he liquidates the greater proportion of his total equity in the value of his real property and converts it to cash which, in turn, can provide him with operating capital, investment capital or income-producing investments. The conversion of the development rights from real property into cash also places the family in a position of avoiding forced liquidation at a sacrifice price at the time of the death of the farmer. The real property tax picture also brightens for such a participating farmer because assessments of real property must be made in full recognition of actual value. The sale of development rights thus precluding the use of the property for anything other than agriculture in perpetuity reduces the market value of the property by virtue of that limitation.
While the purchase of development rights provides a great benefit to the farmer, it also provides benefits to the people of Suffolk County now, and in the future, through the preservation of a vital industry and extensive open space. Furthermore, the development rights concept provides for the retention of ownership and possession and maintenance of the property with the landowner who, through the pride of ownership and possession can be far more effective in maintaining the physical condition of the property than the county.
The history of the real estate development of Long Island followed the classical mode from inner city to the suburban areas of Nassau and Suffolk Counties. The greatest development occurred shortly after World War II. In 1970, the census count for Suffolk County was over the one million mark. It appeared that there would be no end to this wave of development and that Suffolk County was destined for the same fate that befell Nassau County. Nassau County, at the end of World War II, contained many viable working farms growing food crops and producing dairy products for New York City. By 1970, the farms of Nassau County were gone, covered over by urban sprawl.
Early in 1972, John V.N. Klein, the newly elected County Executive, envisioned the idea of buying farmland development rights. Suffolk County is the leading agricultural county in New York State in dollar amounts of agricultural products grown. He believed that the agricultural industry was a vital economic, environmental and social resource worth saving. The eastern end of Suffolk County supports a thriving tourist industry because of its many miles of sandy beaches, but also because of its open spaces and rural atmosphere.
After years of meetings, conferences, discussions and the issuance of various committee reports from farmers, environmental groups, citizen groups, and the Suffolk County Legislature, a local law sponsored by Klein was finally enacted in 1973 which created the farm preservation program.
Early in 1975, the County Legislature approved the hiring of appraisers and subsequently values were submitted to the Legislature based upon a July 1975 valuation date. At that time, the municipal government of New York City was in the throes of financial collapse which consequently affected the municipal bond market and forced the interest borrowing rates to escalate to an exorbitantly high level. This caused the Legislature to decline the approval of the acquisition of development rights because of the exorbitant expense of securing bond monies.
In September 1976, the Legislature completely reversed its position and approved the acquisition of the development rights of 60 farms based upon the original valuation of 21 million dollars. The resolutions that were passed by the Legislature included the bid values tendered by the farmers along with the appraised values that had been submitted the prior year. In October 1976, the total project was turned over to William R. Lockwood of the Department of Land Management for review and approval of the appraisals to justify the expenditure of 21 million dollars for the development rights acquisition. It was at that time that he first became involved with this project.
In pre-reviewing the land appraisals, it was recognized that it was necessary to update and re-appraise due to a decided decline in land market values in the eastern end of Suffolk County. In January 1977, the County of Suffolk hired new valuation consultants to assist in determining the value of the development rights for the 60 farms. The original appraisal concepts which were developed by the consultants were sound and were used to re-appraise the total project.[ citation needed ]
A real estate appraiser was hired who analyzed the real estate market in the three townships being appraised. Data was secured on all of the comparable sales that occurred in the recent past along with present-day listings of similar comparable property together with the analysis of recently foreclosed land. This information was verified and analyzed in detail by the appraiser and submitted. The information contained therein was subsequently used by the appraiser in documenting and supporting his appraised values of the property before the development rights were acquired.
It was decided to make appraisals using a before and after technique. The after value would reflect the value of the property after the development rights had been acquired. This was the basic bundle of rights theory: only the right to development was being bought; hence, the after value was theoretically a pure farm. A farm expert,[ who? ] who specialized in appraising farms in New York State and the immediate adjacent states, was hired. It was determined that there were no pure farms on Long Island. The farm expert concluded that the farming of the land in Suffolk County was a holding operation as all of the farmlands had the potential for development for other than farmlands and this potential was reflected in the prices paid for farm land on Long Island. This was no recent occurrence as it had always been thus on Long Island. The farmers were forced out by development from Kings County to Queens County, to Nassau County, and finally to Suffolk County.
The farm expert advised that he would have to go to other comparable farm areas to determine pure farm values. He secured farm sales in areas where development wasn't probable within the foreseeable future. He investigated comparable sales in the entire State of New York, including the Orange County and Mohawk River Valley muck lands, the States of New Jersey, Connecticut and Massachusetts. He secured and categorized comparable sales from all these areas and submitted them to us[ who? ] in a brochure which was voluminous. He discarded many of the areas as not being comparable and finally selected sales in northern Massachusetts, in the Connecticut River Valley, the Orange County muck lands and the extensive South Jersey farmlands. All of the properties selected as being comparable had similar soil characteristics, irrigation problems, modes of transportation and growing seasons. If there were any differences, these items were noted and adjusted when the appraiser submitted his appraisal of the farms after development rights were acquired.
The review appraiser's additional function in this project was one of coordination and guidance. Monthly meetings were held to assure the project's progress. The information accumulated was voluminous and mind-boggling that it was decided instead to use visual displays to assist us in presenting the program to the farmers. As a result, a consultant display expert was hired to develop town wide aerial photograph maps which displayed all of the market data in a simple fashion that could easily be seen and understood. Not only were the comparable sales, subject properties, listings, foreclosures and subdivisions included on the maps color-coded, but also other important data such as zoning, water districts, school districts, major street names, etc. This consultant also prepared individual survey-type sketches of the properties to be acquired. These were drawn on reproducible aerial photographs. They were used by all of the consultants. Copies were given to the property owner and eventually used in preparation of contracts for purchase subject to confirmation by a survey supplied by the County of Suffolk.
The initial accumulation of market data which was gathered by our[ who? ] valuation consultants indicated that the pure farm values in the metropolitan area held steady; however, real estate that was suitable for housing developments or at least had the potential for development decidedly had declined. In September 1973, there was an economic downturn. Comparable sales data indicated in 1974 that the real estate market still was active and the prices were still high. However, this data did not reflect current trends and in 1975 there were few sales. during this time the original appraisals were made on the farm property. Further market analysis indicated that the prices were decidedly low in 1976 and again lower in 1977.
Trying to establish the value of these properties proved difficult in the downward market. Complicating the situation were the offers made to all the owners based upon the original appraised values. These values had to be solidly supported to make the presentations convincing and acceptable to the farmers and speculators. Because it was evident that there was a distinct change in values, an additional real estate consultant and land planner was hired to further investigate the factors that led to the market decline. This resulted in an "Economic and Land Development Study" that included a complete analysis of all of the subdivisions filed in the townships within the past 10 years along with detailed studies of airport development, road development, the bridge construction to Connecticut, population studies and any other factor that would assist us in determining when this land ultimately might be developed.
Upon receiving this data, appraisers decided they would not only rely upon the consultants, but instead verify this information in the field themselves. The market data was presented and discussed with many real estate brokers in town, the assessors, farm credit service representatives, cooperative extension agents, builders, land planners, vineyard owners and bank representatives. This exchange of information not only verified and gave details and facts about each transaction, but allowed missed facts to be uncovered. This survey was ultimately used in our[ who? ] presentation to the farmer.
An unexpected result was that the real estate experts were convinced that the appraisers were determined to arrive at just compensation and the fair market value of development rights. The real estate appraiser used all of the information received from the experts and ultimately reduced this information into one appraisal report. The report included a before value, the real estate appraised value, an after value that was the pure farm appraisal (appraised as if the development rights were secured by the county) and then ultimately the difference between the two resulted in the value of the development rights. During the presentation, data showed that the potato blossoms in June on farms in Northern Massachusetts and in the Connecticut River Valley were the same size as those in Suffolk and further that they were picking strawberries at the same time. This information was gathered through physical inspection of the comparable farm properties in New York and adjacent states.
Rather than give the farmer a copy of the appraisal, it was decided to provide all of the market data in a condensed form and a brochure was made up which included market data sales, foreclosures, listings and the broker's survey. This information was a synopsis of what was said in the presentation. This booklet, with an aerial photograph of the subject property, a letter indicating the before and after values plus the development rights value, was given to the farmer to use in decision making.
Phase I of the Farmlands Program was to acquire the development rights of 60 farms. The Legislature allocated 21 million dollars for this phase of the program. The approved appraised value for the development rights to the 60 farms came to $10,175,000, which was a substantial reduction in value from the original offers made to the owners. Farmer Nathaniel Talmadge, the first to sign up for the program, was originally offered $4,525 an acre for his development rights; he settled for $2,725 per acre. His statement to the press fairly well sums up the feelings of most farmers,[ according to whom? ] "I am pretty well convinced that they (the new appraisals) were fair. I would not say I was pleased."[ citation needed ] Fifty-two of the approved participants have agreed to sell the development rights to their farms to the county.[ citation needed ]
In the United States, a conservation easement is a power invested in a qualified land conservation organization called a "land trust", or a governmental entity to constrain, as to a specified land area, the exercise of rights otherwise held by a landowner so as to achieve certain conservation purposes. It is an interest in real property established by agreement between a landowner and land trust or unit of government. The conservation easement "runs with the land", meaning it is applicable to both present and future owners of the land. The grant of conservation easement, as with any real property interest, is part of the chain of title for the property and is normally recorded in local land records.
This aims to be a complete list of the articles on real estate.
Market value or OMV is the price at which an asset would trade in a competitive auction setting. Market value is often used interchangeably with open market value, fair value or fair market value, although these terms have distinct definitions in different standards, and differ in some circumstances.
Real estate appraisal, property valuation or land valuation is the process of developing an opinion of value for real property. Real estate transactions often require appraisals because they occur infrequently and every property is unique, unlike corporate stocks, which are traded daily and are identical. The location also plays a key role in valuation. However, since property cannot change location, it is often the upgrades or improvements to the home that can change its value. Appraisal reports form the basis for mortgage loans, settling estates and divorces, taxation, and so on. Sometimes an appraisal report is used to establish a sale price for a property.
Comparables is a real estate appraisal term referring to properties with characteristics that are similar to a subject property whose value is being sought. This can be accomplished either by a real estate agent who attempts to establish the value of a potential client's home or property through market analysis or, by a licensed or certified appraiser or surveyor using more defined methods, when performing a real estate appraisal.
Flipping is a term used to describe purchasing a revenue-generating asset and quickly reselling it for profit.
The sales comparison approach (SCA) relies on the assumption that a matrix of attributes or significant features of a property drive its value. For examples, in the case of a single family residence, such attributes might be floor area, views, location, number of bathrooms, lot size, age of the property and condition of property.
An appraiser is a person that develops an opinion of the market value or other value of a product, most notably real estate.
Highest and best use is a concept in real estate appraisal that originated with early economists such as Irving Fisher, who conceptualized the idea of maximum productivity.
Oregon Ballot Measure 37 was a controversial land-use ballot initiative that passed in the U.S. state of Oregon in 2004 and is now codified as Oregon Revised Statutes (ORS) 195.305. Measure 37 has figured prominently in debates about the rights of property owners versus the public's right to enforce environmental and other land use regulations. Voters passed Measure 49 in 2007, substantially reducing the impact of Measure 37.
A Uniform Residential Appraisal Report or URAR is one of the most common forms used in United States real estate appraisals. It was created to allow for standard reporting and analysis of single-family dwellings or single-family dwellings with an "accessory unit". It is also suitable for a building in a planned unit development (PUD) but is not meant to be used for appraisals of manufactured homes or condos.
The German income approach is the standard approach used in Germany for the valuing of property that produces a stream of future cash flows.
Liquidation value is the likely price of an asset when it is allowed insufficient time to sell on the open market, thereby reducing its exposure to potential buyers. Liquidation value is typically lower than fair market value. Unlike cash or securities, certain illiquid assets, like real estate, often require a period of several months in order to obtain their fair market value in a sale, and will generally sell for a significantly lower price if a sale is forced to occur in a shorter time period. The liquidation value may be either the result of a forced liquidation or an orderly liquidation. Either value assumes that the sale is consummated by a seller who is compelled to sell and assumes an exposure period which is less than market normal.
An Automated Valuation Model (AVM) is a system for the valuation of real estate that provides a value of a specified property at a specified date, using mathematical modelling techniques in an automated manner. AVMs are Statistical Valuation Methods and divide into Comparables Based AVMs and Hedonic Models. Other Statistical Valuation Methods are House Price Indices and Single Parameter Valuations.
Development-supported agriculture is a nascent movement in real estate development that preserves and invests in agricultural land use. As farmland is lost due to the challenging economics of farming and the pressures of the real estate industry, DSA attempts to reconcile the need for development with the need to preserve agricultural land. The overall goal of DSA is to incubate small-scale organic farms that co-exist with residential land development, providing benefits to farmers, residents, the local community, and the environment.
Louisville Joint Stock Land Bank v. Radford, 295 U.S. 555 (1935), was a decision by the Supreme Court of the United States that ruled the Frazier–Lemke Farm Bankruptcy Act unconstitutional in violation of the Fifth Amendment. This unanimous decision was one of the Court's many rulings that overturned President Roosevelt's New Deal.
Most local governments in the United States impose a property tax, also known as a millage rate, as a principal source of revenue. This tax may be imposed on real estate or personal property. The tax is nearly always computed as the fair market value of the property, multiplied by an assessment ratio, multiplied by a tax rate, and is generally an obligation of the owner of the property. Values are determined by local officials, and may be disputed by property owners. For the taxing authority, one advantage of the property tax over the sales tax or income tax is that the revenue always equals the tax levy, unlike the other types of taxes. The property tax typically produces the required revenue for municipalities' tax levies. One disadvantage to the taxpayer is that the tax liability is fixed, while the taxpayer's income is not.
A broker's price opinion (BPO) is a report that is performed by a licensed real estate agent, broker or appraiser. A BPO is an informal appraisal. It is similar to doing a CMA but most times the real estate professional gets paid to do a BPO. A BPO can be either an exterior drive-by or a full interior report. When doing a BPO, the real estate professional researches the subject property, takes pictures of it, investigates the neighborhood, as well as retrieve six comparable properties in their MLS. The final BPO is used to support their professional opinion that will help determine the potential selling price or estimated value of a property.
Real estate is property consisting of land and the buildings on it, along with its natural resources such as growing crops, minerals or water, and wild animals; immovable property of this nature; an interest vested in this (also) an item of real property, buildings or housing in general. In terms of law, real is in relation to land property and is different from personal property while estate means the "interest" a person has in that land property.
Heirs property, or heirs' property, refers to a family home or land that passes from generation to generation through inheritance, usually without a will or formal estate strategy. This unstable form of ownership limits a family’s ability to build generational wealth and hampers the efforts of nonprofits and cities to revitalize neighborhoods.