Tuesday, October 18, 2005

The true cost of preserving open space

There will be elections all over New York in just a few weeks, like the city mayoral race, and various local elections too. Local Democrats recently mailed out a fancy, glossy flier bragging,
Our town has PRESERVED more acres of open-space AT A LOWER COST than virtually any town in Westchester.

And the Republican candidates say that's "EXTREME".
No, what's extreme isn't the money spent, but how they're going about "preserving" open space. What's extreme is that they don't acknowledge the full cost of preserving the land, in their obsession to "preserve" "our small town quality of life."

Our district (comprised of a few small towns) has spent "only" $500,000 of public money to "preserve" 600 acres. The town next door, where my aunt lives, spent $1 million to "preserve" 60 acres. A town not 10 minutes away spent $2 million to "preserve" 43 acres. The Connecticut town across the border spent $11.5 million to preserve 455 acres. So it would initially seem that my local leaders preserved a lot of land at a bargain price, but the flier goes on to mention $11 million in private donations that were used to acquire 497 of the 600 acres. I certainly prefer that private individuals, not government, buy land to "preserve it," and I support private individuals' right to buy the land voluntarily and peacefully. But I still believe the flier should be more accurate and include that cost up front.

And there are more costs than just the purchase price. "Preserved land," a mere 600 acres. That could be divided into half-acre lots for 1200 families, which would help cool off Westchester housing prices. A relative's house, just a few miles from me in an exclusive subdivision, was already expensive by today's prices when she bought it a decade ago; since then it has tripled in value. She therefore pays higher property taxes, an important but rarely considered cost of closing off development so we can have more forest and fewer people around. Conversely, lower-priced land is made more affordable by lower property taxes (at least until the county leaders decide to hike them again).

The land could also go toward shopping malls and other commercial development, and with the increased supply, its price will go down just like with residential land. With reduced operational expenses, businesses can pass that on to their customers in the form of lower prices. In this part of Westchester, not just my particular town, commercial land is very scarce, and after paying high rent, businesses have no choice but to charge appropriately high prices to stay afloat. If people aren't willing to pay those prices, then they just won't get those goods and services locally.

There's a new building being constructed down the road from me, but for what I do not know. Since I first came to Westchester almost six years ago, it's the first newly cleared commercial site that I recall seeing within several miles. From the shape, it probably won't be a grocery store, which is a pity since we could use a new choice. A&P is mediocre, Gristede's down the road is ridiculously expensive, and they're it within 20 minutes of driving. So a few times a month when I'm in Mount Kisco or Danbury (Connecticut), I take extra time to go to Stop&Shop, which has better prices and much better meat and produce. If I must, I'll tolerate A&P.

When there is more space available for homes and businesses, the lower cost ripples through so that the land isn't only what becomes cheaper. This is the "wealth effect" that Frédéric Bastiat extolled in his Sophisms:
The consumer becomes richer in proportion as he buys everything more cheaply; he buys things more cheaply in proportion as they are abundant; hence, abundance enriches him; and this argument, extended to all consumers, would lead to the theory of abundance!
It's bad enough that New York City's rent control policies make city housing artificially unaffordable, driving people from their city residences. Many Manhattan ex-patriates choose Westchester, since it's just a train ride to their city jobs, but they quickly discover how the county politicians' "preservation" policies drive up the cost of real estate, in the name of "open space." It is certainly private individuals' right to raise $11 million to buy and "preserve" 497 acres, but no level of government has the right to deny 103 acres to other people for a paltry $500,000. There are many families who would pay that for a house on a one-acre lot, so how can the local government feel empowered to deny them a chance to bid (i.e. compete), and then brag about how good the officials are to pay so little for "preserved" land?

Local politicians don't care a bit. They only see dollar signs: higher real estate prices mean more property tax revenue, meaning that much more to spend on pet programs. And public officials can generally give themselves "cost of living" salary increases so that they can afford to stay in their housing, but the rest of us rarely have that luxury. As I said in my entry on the failure of NYC rent stabilization, many are forsaking Westchester for Putnam County and even Dutchess County. Rockland is becoming popular, which the increase in its housing prices shows.

So whether the people in my area want to open up land for development or support buying land to "preserve" it, I can only hope they consider all costs involved. Do they believe that fewer neighbors and more forest is worth paying more property taxes and higher prices for locally supplied goods and services? It's their right to believe that, but they should leave me out of it, and not use my portion of local taxes to fund something I oppose.

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