Room to grow? Farmland conservation in California

Room to grow? Farmland conservation in California

Richard Goodenough

In the last decade one quarter of US population growth has occurred in California, generating problems associated with service provision, air and water quality and the depletion of agricultural land resources. Evidence for the conversion of agricultural land to urban use is presented together with the implications for the nation’s leading farm state. The California Land Conservation Act (1965) has been in place for 25 years as the state’s major programme of protection for 15 million acres of agricultural land. The Act can be regarded to have reached maturity and this is an appropriate time to assess its effectiveness. With forces of the land market increasing in response to population growth the Act has been reasonably successful in protecting the economic viability of Californian agriculture, but its future success will lie in supplementing its provision of preferential tax assessment with other land use planning measures. Only through such a comprehensive framework will agricultural land conservation withstand the cumulative drive of the Californian ‘growth machine’. The author is Head of the Department of Geography, Christ Church College, North Holmes Road, Canterbury, Kent, CT1 lQlJ, UK. I would like to acknowledge assistance given by Canterbury Christ Church College and the British Academy during the preparation of this article. ‘American Farmland Trust, Eroding Choices: Emerging Issues. The Condition of California s Agricultural Land Resource, California Field Office, San Francisco, CA, USA, 1986. *J.R. Logan and M.L. Molotch, Urban Forcontinued on page 22

0264-8377/92/010021-l

California’s agricultural economy faces four major resource problems: conversion of farmland to urban uses, soil erosion, salinity and possible are interrelated; eg low shortages of affordable water.’ The problems prices in the past have encouraged irrigation in areas now suffering from salinity, and urbanization of prime land at the fringe has displaced agriculture to more marginal areas where soil erosion problems have occurred. All these problems reflect a depletion of the agricultural resource base, causing a resurgence of interest in the conservation of agricultural land at a time when the benefits of urban growth and development are being challenged.2 Land use planning and regulation are the basis on which any farmland conservation programme is built. Powers exist at state and local levels, but it is at the local level that most decisions are made. In California, as in most states, the power to regulate land use is delegated to local governments. The county and city general plan are the focus for land use decisions because the state has no comprehensive policy on land use. Instead there are a number of state programmes and policies that affect the use of agricultural land. The most important of these has been the California Land Conservation Act (better known as the Williamson Act) which has been in operation for 25 years and now affects half of the state’s farmland - 15 million acres in 48 of the 59 counties, representing 30% of California’s privately owned land. The main purpose of this article is to provide a critical examination of this major land use policy. Agricultural land conversion is an emotive issue in which facts and fears combine to confuse the real situation, so the paper will first ascertain the nature and rate of agricultural land loss using a variety of sources. This will be followed by a discussion of the implementation of the Williamson Act, its intent, operation and a substantial analysis of the implications of its use for local and state governments. Finally the potential of various options for farmland conservation will be considered.

Urbanization

and farmland conversion in California

Conversion is the process by which farmland or ranchland is given over to some non-agricultural use, such as housing tracts, industrial parks or

5 0 1992 Butterworth-Heinemann

Ltd

21

Farmland

conservation in Californiu

80

Figure 1. Farmland counties,

conversion

in 37

1984-86.

Source: Department of Conservation, Office of Land Conservation, Sacramento, CA, USA, 1988.

continued from page 21 tunes: the Political Economy of Space, University of California Press, Berkeley, CA, USA, 1987: E.P. Thomoson. ‘Protecting.agricultural lands’, in R.L. Brennan and S.M. Bates, eds, Land Saving Action, Island Press, Covelo, CA, USA, 1984. %fSDA Soil Conservation Service, Natural Resources Inventory Monitoring Manual, 510.01(6)(3), Washington, DC, USA, April 1982. %alifornia Department of Water Resources, Water Utilization and Requirements of California, Bulletin 2, Sacramento, CA, USA, 1966, p 224. ‘California Department of Water Resources, The California Water Plan. Bulletin 160-83, December 1983. ‘USDA. National Aaricultural Lands Studv. Interim’ Report No 2, Agricultural Land Data Sheet, Washington, DC, USA, 1980. 7California Department of Conservation, Advisory Guidelines for the Farmland Mappinq and Monitorinq Proqram. Division of ‘Land Resource Protect& Sacramento, CA, USA, 1984. ‘California Department of Conservation, 1984 to 7986 Farmland Conversion Report, prepared by the staff of the Farmland Mapping and Monitoring Program, Office of Land Conservation, Sacramento, CA, USA, 1988.

22

Prime

Statewide

Unique

Local

Grazing

Urban

water projects. It is not easy to determine whether a piece of land has been urbanized because agencies use different definitions of ‘urban’. The Soil Conservation Service provides urban acreage figures for all counties using a detailed definition of ‘urban and built up’. As a guide, a given 10 acre area with six or more houses meets the 1.5 acre average density standard for ‘urban’.’ The Department of Water Resources (DWR) defines ‘urban’ as any land ‘dedicated to a commercial, industrial or other urban type use (including urban parks) or land surrounded by urban uses not actively being used for agricultural use’.” Its surveys show that between 1972 and 1980 California cropland was converted to urban uses at the rate of 44 000 acres a year, of which 36 000 were irrigated. In addition, 48 000 acres of ‘other’ lands were urbanized each year, presumably much of it range1and.s Further evidence is provided by the National Agricultural Lands Survey which estimated that approximately SO 000 acres of California farmland were being urbanized each year, substantially confirming the DWR figure.” Perhaps the most reliable source to indicate agricultural land loss comes from the work of the Farmland Mapping and Monitoring Program.’ In 1981, amid growing concern about California’s declining agricultural resource base, a consensus was reached among business, building, government and agricultural interests that the state should administer a regular, impartial analysis of the resource base. In 1982 the California Legislature directed the Department of Conservation to provide regularly updated maps and acreage data on the nature, location and extent of farmland, grazing land and built-up areas. These give a clear indication of the amount of land converted to, or from, the agricultural base on a county basis. The first report compares 1984 and 1986 acreage figures for 3X counties and is accompanied by county maps at a scale of 1:lOO 000 and field survey sheets at a scale of 1:24 OOO.HA graphic display of 1984 to 1986 conversion data is shown in Figure 1, which gives full details of land conversion categories. The diagram shows that over 80 000 acres have been converted to urban use. The loss of prime farmland has obviously been a target for this growth, but it is interesting to note the net loss of nearly 40 000 acres of grazing land-an indication of urban influences at greater distances from the built-up area through ‘lot-splits’ of agricultural land to form ‘hobby farms’ or ‘ranchettes’. Table 1 quantifies these farmland conversions in more detail by showing acreage changes for the different categories of land use.

LAND USE POLICY

January 1992

Farmland conservation in California Table 1. Farmland conversions

by land use Category. 1984-86

807 097 390 964

Acres lost (-) 36 686 31 720 14892 39 717

acreage changes by category Total Acres acreage changed gained (+) 17 952 54 636 10 271 41 991 21 972 36 864 53 518 93 235

Net acreage changed -18 925 -21 449 7 179 13833

7 253 258

123 015

103 713

226 728

-19 362

53 522

15 265

68 787

-38 202

295 515

-57 564 81 778 -30 190 5 976

Total acreage

1984 2 817 732 1 624 546 768211 2062 131

Prime farmland Farmland of statewide importance Unique farmland Farmland of local importance Important farmland subtotal

1986 2 798 1 603 775 2 075

7 272 620

Grazing land

11 055 552

11017350

Agricultural

18 326 172

I8 270 608

176 537

2 095 582 9 445 566 449 397

2177360 9 415 376 455 373

1 509 62 424 13

83319 32 211 5 975

84 828 94 635 5 988

240 483

240 483

480 966

land subtotal

Urban built-up land Other lands Water area Total county area inventoried Source:

See

30318717

30318717

118978

0

Figure 1.

A final indication of agricultural land loss is provided by the latest agricultural census of 1987 which records figures for ‘land in farms’. (For census purposes, a farm is defined as any place from which $1000 or more of agricultural products were sold or normally sold during the census year.) Figure 2 maps the actual and percentage change in ‘land in farms’ from 1982 to 1987. The actual change in acres for each county is shown in Figure 3. In total, 37 of the 58 counties recorded losses of land

Figure 2. Percentage in farms, 1982-87.

-610-3

-1

-310 +3

r-1

+3to+18

change of land

Source: US Census of Agriculture,

4a*7

LAND USE POLICY

f#ggg

January

1982,

1992

1

200 km

I

23

Furmland conservation 01 California 200 000

Figure 3. Acreage change of land in farms, 1982-87. Source: US Census of Agriculture, 1982, 1987.

in farms and the distribution illustrates that this is not just an urban fringe issue. The loss of 400 000 acres in San Bernardino County affects the Victor Valley area of the Mojave Desert where, like the Antelope Valley in Los Angeles County, population has been willing to exchange long-distance commuting for cheaper housing costs. The Sierra Nevada Foothills and the Central Valley are inland locations growing at a faster rate than coastal areas. For example, the Sierra area grew in popul~~ti(~n by 43.5% from 1080 to 1990, and the spread of low-density housing subdivisions in these foothill locations has resulted in agricultural land conversion. Central Valley counties up to SO miles from San Francisco have also become attractive to those wishing to escape poor air quality, congestion and inflated house prices around the Bay. This explains the high agricultural land losses in counties such as Contra Costa, San Joaquin and Stanislaus. The conversion of agricultural land results from the demand for space created by the statewide boom in population and economic prosperity. Lower costs of land, construction and lahour at commuting distances from major urban areas have thus put pressure on rural areas, particularly where there is already an established infr~~structure of roads and water supply. The Central Valley is a classic example and will bc examined in more detail later. The character of new urban development is generally wasteful in that it takes place in :I scattered manner with farms broken up into units too small for agricultural production. This ‘ranchette’ pllcnolnent~n often develops thr[~ugh lot-splits and sales over decades, or perhaps more quickly through Iargc-scale planned subdivision. The conversion process is complicated. but appears to pass through several stages beginning with public investment for transportation improvements such as freeway construction, making lower-cost rural land more easily accessible and increasing property taxes (or rates) on ~lgricult~~ral land. Some l~lndowners welcome the ~~pportunity to car-n large profits from converting this land to urban USC. Others who want to keep their land in agriculture find that property taxes become such an economic burden that they arc forced to XII some or all of their property for development purposes. Incoming residents often come into

24

LAND USE POLICY

January 1992

F~~~l~nd conser~larion in Culif(?rnja

q. Wallace and 5. Strong, Fresno County ln?pacf yodel for Esti~atjng Public and Private Sector Economic Changes, University of California Cooperative Extension, CA, USA, 1984, pp 3-4. “American Farmland Trust, Risks, Challenges and Opportunities: Agriculture, Resources, Growth in a Changing Central Valley, Western Office, San Francisco, CA, USA, 1989.

LAND USE POLICY

January

1992

conflict with agricultural interests and, as cncroachmcnt c~~ntinues, practical farming operations become difficult and the farming future uncertain. Property tax increases have therefore speeded up urbanization by prematurely converting agricultural parcels to other uses. Tax pressures have clear land use and planning implications because scattered development results in an inefficient use of land as well as creating practical difficulties for remaining agricultural operations. Agriculture also depends on a network of services and, in turn, sustains that network. When farming declines in a region, demand for services contracts to a point where there is no longer enough agriculture to support the services it needs. This is a concern for dairy managers in Marin and Sonoma counties, canneries in the Santa Clara Valley and many other regional agricultural enterprises. Agricultural land conversion has a number of adverse effects apart from the loss of agricultural production capacity in the nation’s leading farm state. The expansive nature of land conversion has been shown to have a serious impact on the cost of providing public services at the local level. A 1984 study in Fresno compared the revenue impact of two development plans: one providing SO0 units on 139 vacant acres close to the town; the other providing 500 units in ‘ranchettes’ on 1500 acres of cropland outside the city limits.” The conclusion was that whereas the in-town development would bring a net gain of nearly $40 000 to public agencies in the first year after completion, the other development would generate a net cost of over $68 000. But apart from these economic implications~ agricultural land has value as a wildlife habitat and as green belt separating urban areas. Its continued conversion is therefore a loss of valuable open space. Nowhere are these implications more apparent than in the Central Valley, a region which increased its population by 23% from 1980 to 198X. The Central Valley - a 400-mile long, 60-mile wide, sedimentfilled trough - is one of the great agricultural regions of the world. The counties of Fresno, Kern and Tulare are the nation’s most productive in terms of gross farm sales. They also contain centres that have become attractive for urban development. The valley is in transition because land used by the farm economy is under increasing competition from non-agricultural activities of a diverse and expansive nature. The Central Valley has been defined in a recent study as a lO-county area which includes the Sacramento Valley, the Delta, and the entire San Joaquin Valley bisected by two major transportation corridors, Interstate 5 and Highway 99.“’ The study addresses a whole range of environmental issues, including agricultural land conversion, all of which stem from a rate of population growth higher than that of the state, and an accompanying rate of agricultural land loss of 12 000 acres per year. It shows that prime land is inevitably the first to be urbanized. The original towns functioned as service centres for the agricultural industry and their recent popularity has caused an expansion onto the productive soils they once served. This is particularly evident in Fresno, the Santa Clara Valley and around the cities of Stockton, Lodi and Tracey in San Joaquin County. Projections of farmland loss must be interpreted with caution, but a useful guide is the ‘sphere of influence’ boundaries established by local agency formation commissions (LAFCO) for incorporated areas of California. These boundaries define ‘. , a plan for the probable ultimate physical boundaries and service area of a local agency’, ie the

25

Farmland

conservarion in Califomiu

incorporated area. In the IO-county study area, over 335 000 acres of farmland lie within LAFCO boundaries. Boundary decisions may change, but it is likely that this land is planned for urban use especially in those cities experiencing fast rates of population growth. It is clear that a strong policy is needed to protect a maximum amount of the limited supply of agricultural land. The Williamson Act has been the major policy operating over the last 25 years. To what extent are its provisions adequate ? How do landowners and local governments perceive the effectiveness of the Act? What are the costs and benefits to farmers and legislators of the implementation of the Act? The following assessment will address these questions.

Effectiveness

of the California Land Conservation

Act

In 1972 the author collected field data in preparation for an early assessment of the Williamson Act.” Two subsequent visits were made in 1982 and 1990 to follow up this earlier study. It has been possible to identify changes in emphasis as the Act has evolved over 25 years. Interviews have been conducted with county assessors and planners responsible for the operation of the Williamson Act in the counties of Los Angeles, Ventura, Kern, Kings, Fresno, Santa Clara and San Joaquin. In addition, farmers, developers and environment consultants have been contacted. Written reports from the California Department of Conservation have been useful in providing data on financial implications of the Act, such as reduction in property tax revenues and state subventions.

Origins and purposes of the Act

“R.A. Goodenough, ‘An approach to land use control: the California Land Conservation Act’, Urban Studies, Vol 15, 1978, pp 289-297. ‘2Aqricultural Issues Center, Land in the Babce, Part Ii, Preserving Agricultural Land in California: a Short History of the Williamson Act, Office of Land Cdnservation, California Department of Conservation, Sacramento, CA, USA, 1989. 13J.H. Snyder, ‘A new program for agricultural land use stabilization: the California Land Conservation Act of 1965’, Land Economics, February 1966.

26

The Williamson Act has been in place for 25 years as the state’s major programme of agricultural land protection. ‘* Participation is voluntary for both landowners and local governments, but the fact that one half of the state’s agricultural land is enrolled under the Act illustrates the perceived effectiveness of the legislation. Essentially, the programme is a three-way relationship between landowners, local governments and the state, with the principal aim of retaining agricultural land in farming and thus enhancing the state’s agricultural industry. This is achieved by preferential tax assessment. From 1950 the taxes on California’s farmland began to escalate, and by 1965 agricultural property taxes amounted to over 15% of net farm income.13 This increase was caused by the pre-Williamson method of land valuation. Assessors were required to assess property for tax purposes at its highest and best use, taking into account the land’s potential as well as current agricultural use. Land located in urbanizing areas was therefore assessed at its urban value and farmers were expected to pay taxes related to this value. Farmers were often unable to cover this increase and were forced to sell for development, thus converting agricultural land to other uses and bringing about a scattered pattern of land development (urban sprawl). Farmers who remained were put under additional pressure to sell as land values spiralled. Early attempts to stabilize the rate of agricultural land use change involved limiting city annexations, public purchase of vulnerable land and stronger land use controls. These all failed and focus was increasingly placed on the root case of problems: the property tax system.

LAND USE POLICY

January

1992

Farmland conservation in Californiu Table 2. Property taxes and tax reductions

provided by the Williamson Act, by land use type.

Property taxes by method of valuation ($/acre)

Note: Based on weighted averages supplied by 19 county assessors’ offices, January 1981. Source: California Department of Conservation, see text, op tit, Ref 14.

“‘California

Department

of Conservation,

The Williamson Act After Proposition 13: Still a Bargain, results of a survey on the Williamson Act Tax Incentive, Division of Land Resource Protection, Sacramento, CA. 1983.

Land use Dry grazing Irrigated field and row crops Irrigated pasture Citrus Non-irrigated field and row crops Speciality crops Fruit and nut orchards Vineyards Average, all crops

Fair market’ 17.68

57.10 26.86 102.50 22 36 263.54 65.14 79.03 79 28

Williamson Act 0.86 9.12 2.83 20.00 2.72 39.28 16.32 24.40 14.44

Tax reduction provided by the Williamson Act Compared to Compared to fair market fair market value ($/acre) value (%) 95 16.82 a4 47.92 a9 24.03 80 82.50 88 19.64 a5 224.26 75 48.82 69 54 63 64.84

a3

Under the Williamson Act landowners and city or county governments are joined in a voluntary contract under which both give up certain benefits for other advantages. Landowners forgo the possibility of development on their land during the time of the contract; in return their property tax assessment is related to the income-producing ability of the land, thus resulting in lower taxes. One survey reveals that the Williamson Act offers farmers an average 83% per acre reduction in property taxes compared with taxes based on the current fair market land use value. I4 This figure varies according to the type of agricultural obviously forgoes a proportion of (see Table 2). Th e 1ocal government its property tax base in return for retaining land in agriculture or other although vital, role in open space. The state has a more distant, providing incentives to local governments through compensation in the form of subventions for lost property taxes. In this way the state supports local government participation. The major aspects of the programme are summarized in Table 3. The original Act was confined solely to prime agricultural land. Later amendments in 1969 and 1970 widened the coverage to include scenic highway corridors, wildlife habitats, salt ponds, wetlands and recreational lands, thus also conserving open space. At the same time the prime land requirement was dropped, further expanding the scope of the programme. In 1984 a further provision was added by establishing a minimum parcel size of 10 acres and 40 acres for prime and non-prime lands respectively. This overcame a real concern that the Act had been used for small parcels which were little more than hobby farms. It also discouraged lot-splits of existing contracted acreages to create smaller Table 3. Major features of the Williamson Act proyramme.

Source: See text, op tit, Ref 15.

LAND USE POLICY

January

Landowners and participating local governments sign lo-year contracts, automatically renewed every year unless other action is taken. (A few counties offer initial 20-year contracts.) The contract runs with the land and is not affected by transfer of ownership. Landowners give up the right to develop their land during the term of a contract, receiving in return a preferential tax assessment of their property. Williamson Act parcels are assessed for property tax purposes according to the income produced from farming the land, not its potential value as developed land. Parcels of land in agricultural production and other open space lands are eligible, but there is a minimum acreage size. Contracted parcels must be located in large agricultural preserves designated by county or city governments. This concentrates parcels into large blocks of agricultural land rather than scattered parcels. Contracts can be terminated through: non-renewal: cancellation; city annexation under certain circumstances. In partial replacement of lost property tax revenues, participating counties and cities receive state compensation. Per acre payments in 1988/89 ranged from $8.00 for urban prime located within 3 miles of cities of 25 000, to 40 c for non-prime land. For purposes of compensation payments, Williamson Act parcels are classified as urban prime, other prime, and non-prime.

acreage removed (not including transfers to

1967168

Figure 4. Williamson

‘69170

‘71172

Act acreage,

‘73174

1967-89

‘75176

1977

1979

1981

1963

1985

1987

(millions).

Source: California Department of Conservation, see text, op tit, Ref I 5. Note: The decrease in enrolled acreage in 1982183 resulted from the shift of approximately Timber Preserve Zones.

one million acres from the Williamson Act to

parcels. The final legislative change occurred in 1987 and addressed cancellations of contracts, regarded by the state as being possible only in extraordinary cases. This subject will be more fully considcrcd when assessing the current effectiveness of the Act.

Patterns and trends in the use of the Williamson Act

TSAgricultural Issues Center, Land in the Balance. Part I. An Analysis of Foregone Revenues, Subvention Options, Landowners Benefits, Perceptions and Local Administration, Office of Land Conservation, California Department of Conservation, Sacramento, CA, USA, 1989.

28

In the first two years of the Act. contracts were signed for only 200 000 acres in only six of the SO counties. This was a poor start for a programme which was regarded as an innovative breakthrough in land conservation. Timely revisions of the Act to include open space as well as non-prime agricultural land brought a sharp change in rate of enrolment. in 1968169 ten times as many acres were enrolled as in the first two years. Contracted acreage increased rapidly in the early 1970s (see Figure 4), rising from 4.2 million at the start of the decade to nearly 14 million five years later. Peak enrolment was reached in 19X1/82, but the total dipped in 1983, reflecting the transfer of about 1 million acres to a Timber Preserve Zone. Since that time the total has fluctuated and currently stands at about IS million acres across 48 counties.” The location of enrolled lands by county (Figure 5) shows a marked concentration. San Joaquin Valley counties dominate, indicating their status as the state’s most important agricultural producers. Major cattle counties of Tehama, San Luis Obispo, Monterey, San Benito, Santa Barbara and Mendocino show up strongly in the non-prime acres enrolled. Only 4.7% of the total contracted acres are classed as urban prime and over half of these are found in the rapidly urbanizing counties of San Joaquin, Tularc, Yolo and Stanislaus. If the major measure of the Act’s success is the proportion of prime land close to urban margins, this figure would suggest a failure. Ten counties currently fail to offer contracts to farmers, and these are in mountain and forested land with little agriculture (cg Alpine, Del Norte, Inyo, Mono, Modoc). I-Iowever, some counties such as Imperial and Merced do contain large amounts of agricultural land. Non-

LAND USE POLICY

January

1992

Farmland conservation in California

r 1

Acres > 600000 30000+599999 100000-299999

fwj

50 ow-99

r-----y

<49999

999

non-partlclpaiing

counties

San Bernardino

Figure 5. Enrolments son Act, 1988.

in the William-4

\

_“_ ,.,.,

Source: See Figure 4.

enrolment in Imperial is explained by the fact that a high farm income is achieved by double and triple cropping, which would reduce the benefits of preferential assessment for some operators. Merced feels that enrolment would have too serious an impact on tax revenues and that other mechanisms for land protection would be more effective. In Sutter and Yuba counties there appears to be little or no interest in the Act by farm groups. During the last decade there have been significant increases in certain counties in the amount of land removed from the programme. Farmers can get out of the Act by non-renewal, in which case the contract will continue to run for another nine years during which time the assessment for taxes is gradually increased from Williamson Act level to the full market value. Another method of stopping involvement - cancellation is regarded as an extremely controversial step, to be used only in exceptional cases. Cancellations were not a problem during the 1970s but have become more so in recent years. In 1979,430 cancellations increased dramatically and have remained at a relatively high level. By 1989/90 non-renewals had amounted to 600 000 acres, with SO 000 acres removed by cancellation. Patterns of non-renewal and cancellation clearly relate to development pressures, with San Joaquin Valley being most obviously affected. On the east side of Fresno City, many farmers are filing for non-renewal because of development potential. They are often the second-generation farmers who took out the original contract

LAND USE POLICY

January

1992

29

Farmland conservation in California

‘%.A. Goodenough, ‘Proposition 13 and its impact on local government programmes in California’, Policy and Politics, Vol 10, No 4, 1982, pp 439-457.

and they are not prepared to ‘lock up’ the development value of their land any longer. One particular instance of cancellation which was surprisingly approved by the Board of Supervisors concerns a 60-acre parcel in Fresno. The cancellation fee (12.5% of the parcel’s current market value) amounted to nearly $0.5 million, but this is not considered to be prohibitive especially if the developer is prepared to pay the cost on behalf of the landowner. (Cancellation fees are collected by the state and in 1988/89 amounted to over $3.3 million.) Terminations and cancellations of contracts have clearly been influenced by the passing of Proposition 13 in 1978 which drastically reduced the revenues of local governments by cutting property taxes - the major source of revenue to finance local services and programmes. The financial consequences for local governments have been enormous, because the measure reduced California’s local property tax by 58% or $7000 million. l6 Some local governments have therefore been reluctant to support the Williamson Act, which would result in further revenue reductions and perhaps a consequent reduction in the level of services a local government could provide. The Act also became less attractive to farmers because the property tax benefits resulting from the Williamson Act have been partly achieved already under the terms of Proposition 13. The Act therefore has important financial implications at county and state level. For all 48 participating counties the loss in property tax revenues in 1988/89 amounted to over $120 million (including county general funds, special district and school district funds). The five San Joaquin Valley counties of Kern, Fresno, Tulare, Kings and San Joaquin accounted for over half of the county general fund losses, with rural and foothill counties experiencing the smallest losses. A proportion of this property tax loss is made up through state compensation in the form of an annual subvention. Funds are allocated according to the acreage contracted in ‘urban prime’ ($8.00 per acre), ‘other prime’ ($1.00) and ‘non-prime’ ($0.40). These amounts date from 1976 and fail to reflect actual revenue losses to local governments and probably overemphasize payments to land in the urban prime category which, although representing less than 5% of the contracted lands, receives 40% of the total state subvention. Failure to revise the formula by reducing the differential between urban prime and non-prime payments was leading to the withdrawal of support for the programme by those counties most adversely affected. Recognizing this, the Williamson Act Advisory Committee has submitted recommendations to the state legislature. The proposals are a clear recognition of a need to make the Act more attractive to counties by establishing a single payment for all prime land of $3.00 per acre and raising the non-prime payment to $0.80 to $4.00 and $0.85 per acre per acre. These values will increase respectively in 1992. Because the programme depends upon the voluntary participation of cities and counties, compensation for lost revenues will remain a critical issue in its future success. A summary of various costs and benefits of the Act has been provided by the California Department of Conservation (see Table 4). Four benefits of strong state participation in the Act are frequently identified: food security and the protection of a resource base; the provision of a balanced economy including agriculturally dependent industries; orderly urban growth; and the preservation of open space and other environmental amenities. The costs are somewhat easier to quantify and

LAND USE POLICY

January

1992

Farmland conservation in California Table 4. Benefits and costs of the Williamson Act.

State

Local government

Farm owner/operator

General population

Development

sector

Source: California Department of Conservation, see text, op cir, Refs 12 and 15.

Benefits

Costs

Orderly growth, protection of nonrenewable resource, more diversified economic base, increased farm production with multiplier effect on the economy (and associated public revenues), cancellation fees (variable year to year) Orderly growth, more diversified economic base, savings in public service costs from more compact development, increased support from the agricultural community because of land protection policies, maintenwatershed protection, ance of land use options for the future, complement to other land use planning tools Preservation of agriculture infrastructure and support activities, lower property taxes, reduced disruption of farm operations from leapfrog development, continuity of farm ownership Amenities of open space: orderly development; contribution to food security and availability of locally produced products; protection of watersheds and airsheds; wildlife habitat Possible benefits from amenities attributable to preserved farmland

Absorption of a portion ($59 million in school funds, $14.5 million in subventions to counties and cities) of local property tax losses, minor administrative costs

Lower property tax collections (estimated at $44.5 million net loss to county general funds), administrative costs, opportunity cost of higher property taxes from development

Restrictions on property rights and development potential; one-time application fees; reduced income tax write-off

Shift in property tax burden ($120 million) to other taxpayers; reduced availability of land with high potential for development

Possible higher land prices, locational restnctions and delayed development

include property tax reduction, state compensation funding nistrative costs. This assessment will now concentrate on the effectiveness as a growth control measure.

The Williamson

17G.C. Gustafson and L.T. Wallace, ‘Differential assessment as a land use policy:

the California case’, Journal of fhe American lnstifute of Planners, November 1975, pp 379-389; G.C. Gustafson, California’s Use-Value Assessment Program: Participation and Performance Through 1975 7976, University of California Agricultural Experiment Station, Grannini Foundation Information Series No 77-2, 1977; H.F. Carman, ‘California land owners adopting use value assessment programme’, Land Economices, August 1977, pp 275-278. See also Goodenough, op tit, Ref 11, pp 293-294; and California Department of Conservation, op tit, Ref 15, pp 2.2, 2.3.

LAND USE POLICY

January 1992

Act and the management

and admiof the Act

of urban growth

With 15 million acres now protected, the Act can be regarded to have reached maturity and now is an appropriate time to make an assessment of its effectiveness. To what extent has the Act reduced pressure for development on contracted acres? Has the rate of agricultural land conversion to other uses slowed down? Can it be effective as a tool for guiding urban growth? To be fair, the Act was never intended as a major state policy on urban growth, but it has been effective in encouraging counties and cities to identify agricultural ‘preserves’. This is a major requirement of Williamson Act parcels. The preserve either already exists or is created by local government. With a minimum size of 100 acres (and often larger in some counties) it can clearly serve as a planning and land use tool with the preserve zoned exclusively for agriculture. Although counties can point to a continuing loss of 44 000 acres of farmland to urban use each year, it is impossible to say how much higher the conversion rate would have been without the designation of agricultural preserves. Previous assessments of the Act have drawn attention to its strong emphasis on the protection of remote, non-prime farmlands and open space lands rather than urban fringe land.” This remains true today, but for good reason. Currently city growth does not necessarily occur by direct expansion into nearby agricultural land. Frequently, discontiguous or leap-frog development takes place, leading to rural subdivi-

31

Farmland conservation

‘*California

Department

in California

of Conservation,

op tit, Ref 15, p 7.17. ‘glbid. D 7.19. 200ffick of Planning and Research, LAFCO’s General Plans and Annexations, Office of Local Government Affairs, Sacramento. CA. USA. 1990. 21Ameridan karmland Trust, Saving the Farm: a Handbook for Conservino AMcultural Land, Western Office, San Francisco, CA, USA, 1990. “Office of Planning and Research, A Guide to Planning in California, Office of Local Government Affairs, Sacramento, CA, USA, 1988.

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sions and homes scattered throughout agricultural land. This has restricted farming operations and increased service delivery costs. The land use stability provided by the Williamson Act in these locations has undoubtedly reduced the level of this rural development and led to a greater protection for agriculture, recreation, wildlife habitats and other open space uses. The various counties and cities have differing views on how they see the Act’s role in growth management. In some it is linked to zoning and other land use tools; in others it is little more than a mechanism for holding land for eventual development. Where it is a consistently used conservation tool the restrictive and long-term character of contracts (in some cases 20 years) is an additional level of support for the more politically vulnerable zoning measures. Where contracted parcels are located in the path of urban growth there may be a slowing of growth as contract non-renewals release land more gradually, resulting in a more careful and efficient process of urban growth with concentrated patterns of development. In a survey conducted by the California Department of Conservation, county and state officials were asked whether the Williamson Act helped to bring about orderly urban development. Ix Affirmative responses (59%) outnumbered negative responses (29%). This question was followed by a more specific question concerning the effectiveness of the Act as a land use planning technique. Again the consensus was positive, with particular reference to aspects of land use regulation (eg it reinforces present zoning policy, provides a ‘time buffer’ for better planning, relieves political pressure from the board of supervisors). One comment from a state leader is particularly illustrative: ‘. . having agricultural preserves established and land conservation contracts in place is a vital land use planning tool as far as direction of development and commitment on the part of local government to the preservation of agricultural lands’. I” In conclusion, the Act appears to be at its most effective as a planning tool when it is linked to some other policy or development control mechanism such as zoning. The activities of the local agency formation are relevant here because they have power over commissions (LAFCO) municipal annexations and incorporations and strongly influence the The ‘spheres of influence’ which they course of urban development.“’ identify for the future growth of each city can be complementary to agricultural preserves and contracted parcels, with the spheres acting as a priority for urban development and the preserves as a protection for farmland. The considerable variation in local political and planning practices is inevitable because of the voluntary nature of the programme. Ur, to now the Williamson Act has been reasonably effective in proteciing the economic viability of Californian agriculture, but with the forces of the land market increasing in response to population growth, future success will lie in supplementing its provisions with other measures such as the county general plan, purchase of development rights and alternative land use planning measures (see below).2’

Additional farmland conservation A general

programmes _ -

in California

similar to a UK structure plan, arises from the legal for cities and counties to establish a land use plan to provide the basic framework for an agricultural land conservation programme. 22 Every plan mu st include elements on land use, conservarequirement

plan,

Farmland conservation in California

tion and open space, and many address agricultural issues exclusively. Some, eg for Sonoma County, specify the use of the purchase of development rights to limit intrusion of residential development on agricultural lands. Santa Barbara specifies that LAFCO ‘spheres of influence’ should not extend into productive agricultural land, whilst Tulare County has a unique approach requiring each request to remove land from agricultural zoning to be objectively assessed using a set of 15 criteria. Zoning changes can thus become more objective and less subject to political pressures, and the technique has been very successful in directing urban growth to locations where public services are already in place. Contents of general plans clearly vary across the state, but they are a legal requirement in which stated goals and objectives must be consistent. A plan cannot therefore state its commitment to the long-term protection of agriculture whilst adopting a policy which would encourage the premature conversion of agricultural land to urban use. Zoning involves the separation of a city or county into districts (agricultural, residential, commercial, etc), with each district having designated uses and densities. It is the basic planning tool for directing urban growth, guided by the stated policies of the general plan. In some cases exclusive agricultural zoning is allocated where areas can achieve performance standards in terms of value of annual agricultural production. These zones are usually large, they exclude all non-farm uses and are effective in minimizing farmland conversion, as in the case of Napa County vineyards and Santa Cruz County’s fertile Pajaro Valley. Density-based zoning usually applies outside areas exclusively zoned for agriculture. Large-lot zoning is used widely in California to establish a large minimum lot size in which housing density will be very low. This has been extremely detrimental to farming because it leads to fragmentation or ‘parcellization’ of farmland into small ranches or hobby farms. If zoning is to be an effective tool in protecting farmland, then it is crucial that appropriate lot sizes and density standards are chosen - a very complex legal decision. Clustering and planned unit development are being used to reduce sprawl in rural areas. Both lower the cost of development by reducing the infrastructure requirements. Both allow an increase in residential density clustered onto a small part of an agricultural parcel while retaining the rest of the parcel for long-term agricultural production. Ordinances that allow clustering and planned unit development have been adopted in 34 counties. Intergovernmental agreements between cities and counties to protect farmland often take the form of agricultural green belts or buffers. Ventura County has 12 such voluntary agreements which have been in effect without violation since 1986. A different form of agreement exists between Solano Irrigation District and the City of Fairfax which prohibits the city from annexing any farmland serviced by the irrigation district for 30 years. In return, the district guarantees a water supply for a large industrial project in the city. ‘Right-to-farm’ agreements represent a further example, whereby local laws and ordinances in more than 20 counties protect farmers from liability claims from homeowners who allege that their property is being adversely affected by practical farming operations. Purchase of development rights (PDR) is a permanent means of restricting development in farmland which was first adopted in New York in 1974 and is quickly gaining support across the nation.2” Under

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1992

Farmland conservation in California

23American Farmland Trust, Protecting Farmland Through Purchase of Development Rights, National Office, Washington, DC, USA, 1989; E. Thompson, ‘Purchasing of development rights: ultimate tool for farmland preservation?‘, Zoning and Planning Law Report, Vol 12, No 9, October 1989. 240ffice of Planning and Research, California EnvironmentaT Quality Act: Law and Guide/ines, Sacramento, CA, USA, 1985. %ounty of Santa Barbara, Environmental Thresholds and Guidelines Manual, Department of Resource Management, Santa Barbara, CA, USA, 1989. 26Land Trust Exchange, National Directory of Land Trusts, Alexandria, VI, USA, 1989.

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the scheme, farmers receive a direct monetary payment in return for waiving development rights on their land. Restriction is permanent and farmers can use the payment to pay off debts and invest in future farming operations. Implementation of the programme requires five basic decisions: what farmland to protect, the type of restriction to be placed on the farmland, how to assess the value of development rights, how to enforce the development restriction, and how to finance the programme. Although California does not have a statewide programme to purchase farmland development rights, many local governments have them, especially coastal counties like Santa Barbara, Santa Cruz, San Mateo, Marin and Sonoma. The programmes can receive county and state-level funding through bond issues, budget appropriations and the environmental licence plate fund. This is an effective farmland protcction tool - especially if it is implemented as part of a balanced, comprehensive plan in support of agriculture - but it can be extremely expensive to achieve, especially in urban fringe locations. The Culifornia Environmental Quality Act (CEQA) involves a comprehensive state environmental review process which requires all local and state agencies to assess the environmental impact of proposed development projects. 24 The process is complex and has been revised frequently since its implementation in 1970, but the guidelines are clear in stating that the conversion of prime agricultural land is ‘normally considered a significant environmental impact’ and would require an environmental impact assessment. Not only are adverse impacts identified, but the report is required to indicate measures that would mitigate impacts of the development proposals. Typically this has meant a modification of the proposed project so that the impact on farmland conversion is reduced, perhaps by reducing the size of the project, thereby increasing the density of development, or forcing a detailed consideration of alternative sites. The role of CEQA in the conservation of farmland has perhaps the greatest potential of any conservation measure because it is a state legal requirement. Counties are beginning to adopt very clear guidelines which can be used to judge environmental impacts resulting from urbanization of farmland.2s Land trusts are gaining a reputation as an effective land conservation technique. They are private, non-profit, tax-exempt corporations set up for the purpose of acquiring and managing land in the public interest. They are funded privately by individuals who have an interest in the preservation of farmland. As private organizations, they have the advantage over government agencies in being able to move quickly and quietly in land sales. They have a better relationship with landowners than government agencies, for whom the farmers hold a traditional suspicion. There are more than 60 of these land trusts in California and more than 700 nationwide, each working to achieve effective, long-term farmland conservation.2h

Conclusion In recent years the rapid growth of population and the increasing demand for living space have had a profound impact on the landscape, with 44 000 acres of Californian farmland converted to urban use annually. Population projections indicate no lessening of current trends and the position of agriculture is likely to become even more threatened. Public officials, farmers and environmentalists all recognize

LAND USE POLICY

January

1992

Farmland conservation in California

and over the last 25 years have the need to preserve farmland, introduced a variety of programmes to cope with legitimate develoment demands whilst maintaining a productive agricultural base. The Williamson Act has been the most innovative response by allowing local governments to assess agricultural land at the actual income-producing value rather than ‘highest and best use’. The Act has helped farmers by providing preferential tax assessment, thus discouraging the unnecessary and premature conversion of agricultural land to urban uses. During the 25year operation of the Act there has been a succession of legislative changes, new growth pressures and land use conflicts, but the Act has emerged today as the major programme for agricultural land conservation on half of the state’s farmland. This does not imply an unquestioning consensus about the virtues of the programme. The adequacy of state compensation to cities and counties is a continuing controversy, as is the voluntary nature of the Act, but its future contribution will depend largely on the way it is integrated with the whole process of land use planning and environmental review, particularly through the assessment of environmental impact under CEQA. Only through such a comprehensive framework and with a strong commitment by the state will agricultural land conservation withstand the cumulative drive of the California ‘growth machine’.

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