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Published June 2006 By: Christine Rombouts

REAL ESTATE: The Benefits of Conservation Development

Beyond environmental considerations, benefits such as tax incentives, streamlined approvals and eager buyers await

As our country’s population continues to grow and new development encroaches into such environmentally sensitive places as agricultural areas and woodlands, it has become increasingly important to preserve what open space we have left to maintain our quality of land and life. One way to blend conservation with development is simply called conservation development (CD), or conservation easement.

Conservation development is a growing trend, particularly in the Western U.S. in such states as California, New Mexico, and Colorado. Conservation development is a far-sighted approach to real estate development in which efforts are made to protect the existing natural resources within a proposed development as well as minimize the impact of natural assets such as woodlands, watersheds, view sheds, agricultural lands and wildlife corridors.

Although still few in number, conservation developments are growing more common as developers seek ways to secure entitlement for environmentally sensitive land that might otherwise not be developed. In many instances, establishing a conservation development easement was the difference between a developer gaining entitlement for a project within an environmentally sensitive area, and having to walk away. One such project in California is the Santa Lucia Preserve in Monterey.

Set on 20,000 acres of the former Rancho San Carlos in Monterey County, the Santa Lucia Preserve was envisioned as a small residential development of 350 homes on 11/2-to-2-acre lots. The development strategy embraced three goals: 1) Long-term protection of the property’s scenic and habitat values. 2) construction of a residential community integrated into the preserve and compatible with the natural ecosystem. 3) assured, permanent financial support for the preservation of the property’s natural resources.

The developers created the Santa Lucia Conservancy to oversee preservation of the initial 10,000 acres of land designated as permanent open space, with the size eventually reaching 18,000 acres. The conservancy has three principal duties: 1) To hold title to conservation easements in order to maintain the ecological integrity of the preserve, 2) to develop and manage public access to the preserve, and 3) to engage in environmental education and outreach in Monterey County.

Today, the Santa Lucia Preserve encompasses large expanses of native habitat and wildlife mingled with low-key developments, including estate homes, a golf course, equestrian center, a sports complex, and lodging and dining services. The residential element of the preserve consists of 300 homelands sited to ensure the environmental and esthetic integrity of the landscape, providing privacy and the ability to see without being seen.

As successfully demonstrated at the Santa Lucia Preserve, the purpose of conservation development is to utilize the concept of a non-profit stewardship entity such as the Santa Lucia Conservancy to ensure a balance between conservation and development objectives. This concept allows for limited development while protecting an area’s environmental features, providing open space, and maintaining farmland and the agrarian character of communities. Typically, development is clustered, leaving 50 percent or more of the land as open space.

A conservation development is established by a contract between a landowner and a community stewardship entity or government entity that contains permanent restrictions on the use or development of land, usually through the establishment of a conservation easement. The conservation easement is recorded in the real estate records, and is binding upon future landowners. There must be a public benefit associated with a conservation development, and a landowner may reserve home sites for present and future use.

"We really need to encourage land developers and production builders to increasingly utilize conservation development programs by taking every opportunity to showcase the benefits, especially economic values, obtaining approvals/entitlements, and developing value-added communities with features such as open space, trails, and wildlife,” notes Tom Keith, principal and vice president, EDAW, Inc., the world’s largest land planning and environmental analysis firm. EDAW is a leading proponent of conservation development and last year co-hosted a major CD symposium with the Urban Land Institute in Colorado Springs, Colo.

Ed McMahon, a nationally renowned authority on sustainable development, land conservation and urban design who serves as the Urban Land Institute’s Charles Fraser Senior Resident Fellow for Sustainable Development, states that our nation must pay more attention to conservation development because of the accelerated consumption and fragmentation of open space. "We are using more land than we should for our population growth,” he says, and adds that open space preservation has a higher rate of voter approval than any other issue, including highway and school construction.

McMahon points out that regulators and developers must strive to create and implement a more strategic approach to utilization of conservation development principles, stating that conservation development offers significant benefits to both the public and private sectors, including:
• Preservation of open space
• Reducing infrastructure costs
• Increasing property values
• Expediting the entitlement process

"Ongoing land management is extremely important to successful conservation development,” explains Jeff Milder, Ph.D., a professor at Cornell University’s Department of Natural Resources. "Conservation development integrates protection of natural resources and open space with development needs of the communities. Residents appreciate the natural beauty, open space, trails, and plant and wildlife that conservation developments preserve.”

Focusing on the future potential of conservation development, Keith asks, "Can we move conservation development to the mainstream? Clearly it’s happening, but it’s not really there yet.” He points to states such as Colorado, California and New Mexico as examples of states that are leading the way. "There are approximately 1.6 million acres that have been preserved using an array of conservation development tools,” he notes. "When it’s done properly, we can achieve real contributions to land and resource conservation.”

Brooke Warrick, principal of San Francisco–based American LIVES, Inc., says there is definitely a market for communities that incorporate conservation development. "Other conservation-sensitive communities in which we have been involved are successful because they tend to attract what we call cultural creative residents, who are characterized by a focus on environmental responsibility and community participation,” he says.

Warrick states that buyers seem to invest in sustainable communities for one of two reasons. Either they believe it’s important to lead a more sustainable lifestyle, or they believe they can save money. According to national surveys by American LIVES, 85 percent of homebuyers questioned said they are willing to pay $2.25 more per square foot for sustainable housing, and 73 percent are willing to pay $4.50 more. "It may vary by a percentage point or two, but not very much,” Warrick points out. "These numbers are indicative of other parts of the country; buyers want some measure of sustainability.”

The long-term savings delivered by some Green elements can be partially reflected in increased sales price if clearly communicated to the buyer. Warrick says that for Green development to be effective, both buyers and builders need to be informed about the benefits of using Green products and practices.