Had he sold for $10.5 million three years ago, and assuming that he invested the funds, let’s say in tax free municipal bonds at a 7+/-% return, his income on the money received would have totaled $2.1+/- million. The cost of keeping a property of this size in that particular location is not less than $50,000 a year. Other than leasing pasture, the property has no income. Another $150,000 in costs. Tax rates may be changing on capital gains. If the capital gains rate increases even 10%, it’s an additional approximate $1 million cost to the seller. If inflation is 2.5% (many feel it is currently over 10%), the purchasing power of his dollars decreased about $250,000 a year. That’s another $750,000. There is a $240,000 decrease in commission to the Realtors at a 6% commission rate on the lower price, and a decrease in capital gains tax at 15% on the approximate $4 million face amount of price decrease—a savings of yet another $600,000!
Basically, had the seller done the deal three years ago he would have been free to move on—energized by the sale and his future dreams, and removing uncertainty from his life equation. His total financial benefit, including the risk of increased capital gain tax, the opportunity cost of money even if invested at a paltry 7%, plus the savings in operating costs and considering inflation, would have been the equivalent of a current $14 million sales price.
Perhaps the seller will now get $10.2 million at some point from someone. I wish him well. The fact of the matter is, he’s lost three years and left a minimum of $3.7 million or more on the table due to the delay.
Pigs are fat and happy. Hogs get slaughtered.
Whichever side of the political spectrum you’re on, there’s widespread agreement that there is more government, and more regulation. These rules from on high, and to a lesser but noticeable extent, flowing from state and local governments, affect land, real estate in general, and your purchase, sale, ownership and improvement of these assets in direct and indirect ways. We’ve discussed some thus far, but it’s impossible to review all in a few chapters or one book. Some regulations, like Dodd-Frank, could justify a volume all by themselves. This chapter is intended to give you a feel for trends, what’s “big” in this ever connecting, ever thickening ganglion of rules which affect, or could affect your land.
The Folks Outside of America—
How They Feel About Your Land
From Agenda 21: “Private Property Ownership is the primary cause of Social Injustice”—United Nations—UN.org1
The United Nations Conference on Environment and Development (UNCED) held in Rio de Janeiro, Brazil, in 1992 was the start of “Agenda 21.” This forty-chapter, ever-evolving bible of globalism is divided into four sections: (I) Social and Economic Dimensions, (II) Conservation and Management of Resources for Development, (III) Strengthening the Role of Major Groups, (IV) Means of Implementation.
Warm, fuzzy language, ambiguous or general in meaning was, and is cleverly used, first to get one hundred and seventy plus sovereign nations to sign on in 1992—including the United States2—and over the last decade of “implementation” to sift into and permeate governments and government policies at Federal, regional and local levels worldwide, the United States included. There are those who get lost in the feel good “sustainability, poverty, education” language and are inclined to dismiss any thought of a more sinister intent directed at the sovereignty of nation states, or individual freedoms around the globe. Are we are misreading the words or intent? Here is a summary—again from the Agenda 21 Treatise itself:
Effective execution of Agenda 21 will require a profound reorientation of all human society, unlike anything the world has ever experienced a major shift in the priorities of both governments and individuals and an unprecedented redeployment of human and financial resources. This shift will demand that a concern for the environmental consequences of every human action be integrated into individual and collective decision-making at every level.
I believe that—putting aside the fuzzy mask of feel good words that few could argue with if used in the normal context—a careful reading of Agenda 21, and all other documents ancillary to Agenda 21, all prepared by or under the auspices of the UN, are revealing and support the excerpts above. The essence of Agenda 21 is indeed that the root of social injustice is the ownership of land.3
The problem is not at the local level. The problem lies in the smoke-filled chambers where politicians huddle to cut deals and create ridiculous laws intended to woo this constituency or that, and promote their ideology, and from the stark offices at the highest level of government where regulations enforcing these laws are written by clever, shadowy bureaucrats who sincerely believe bigger government, more regulations and less private is good. It is from these higher levels that the culture trickles down to agencies that then trample the property rights of specific people, classes of people, and landowners. The poor folks at the local Fed level have to operate within this framework. I can tell in my discussions with them that most of them are not pleased with their predicament.
The danger of ambiguous diversionary language is that it is used to power agendas that were not part of the original intention of those who ratified the agreement, and that ambiguous language covers all the bases. In other words, even if you assume this all began with honorable intentions, Agenda 21 has morphed into an international attack on personal property rights everywhere. Here is more from Agenda 21—Core Document. These sections should be read with the bigger picture disclosures revealed above in mind. Those are the core beliefs that drive the rest of the Agenda 21 document.
“Humanity stands at a defining moment in history. We are confronted with a perpetuation of disparities between and within nations, a worsening of poverty, hunger, ill health and illiteracy, and the continuing deterioration of the ecosystems on which we depend for our well-being. However, integration of environment and development concerns and greater attention to them will lead to the fulfillment of basic needs, improved living standards for all, better protected and managed ecosystems and a safer, more prosperous future. No nation can achieve this on its own; but together we can—in a global partnership for sustainable development.”
“Agenda 21 is a comprehensive plan of action to be taken globally, nationally and locally by organizations of the United Nations System, Governments, and Major Groups in every area in which human impacts on the environment.”
Note: Every area in which human impacts on the environment. Wouldn’t that be everywhere on the planet?
“7.27. Access to land resources is an essential component of sustainable low-impact lifestyles. Land resources are the basis for (human) living systems and provide soil, energy, water and the opportunity for all human activity. In rapidly growing urban areas, access to land is rendered increasingly difficult by the conflicting demands of industry, housing, commerce, agriculture, land tenure structures and the need for open spaces. Furthermore, the rising costs of urban land prevent the poor from gaining access to suitable land. In rural areas, unsustainable practices, such as the exploitation of marginal lands and the encroachment on forests and ecologically fragile areas by commercial interests and landless rural populations, result in environmental degradation, as well as in diminishing returns for impoverished rural settlers.”
“The objective is to provide for the land requirements of human settlement development through environmentally sound physical planning and land use so as to ensure access to land to all households and, where appropriate, the encouragement of communally and collectively owned and managed land. Particular attention should be paid to the needs of women and indigenous people for economic and cultural reasons.”
“(g) Accelerate efforts to promote access to land by the urban and rural poor, including credit schemes for the purchase of land and for building/acquiring or improving safe and healthy shelter and infrastructure services;”
“(h) Develop and support the implementation of improved land-management practices that deal comprehensively with potentially competing land requirements for agriculture, industry, tr
ansport, urban development, green spaces, preserves and other vital needs;”
“(i) Promote understanding among policy makers of the adverse consequences of unplanned settlements in environmentally vulnerable areas and of the appropriate national and local land-use and settlements policies required for this purpose.”
Note: Above, they discuss all land on the planet. These subsections (g), (h) and (i), seem to reference every possible human economic and personal use of land imaginable. Let’s peruse a bit more!
“7.29. All countries should consider, as appropriate, undertaking a comprehensive national inventory of their land resources in order to establish a land information system in which land resources will be classified according to their most appropriate uses and environmentally fragile or disaster-prone areas will be identified for special protection measures.”
“The sustainability of urban development is defined by many parameters relating to the availability of water supplies, air quality and the provision of environmental infrastructure for sanitation and waste management. As a result of the density of users, urbanization, if properly managed, offers unique opportunities for the supply of sustainable environmental infrastructure through adequate pricing policies, educational programs and equitable access mechanisms that are economically and environmentally sound.”
Note: Read carefully, given the overall intent of Agenda 21 in its own words on page one and two of this chapter, this appears to assert that on a country by country basis, population should be moved, or forced to move into compact urban areas (“human settlement”) from rural areas, especially away from “fragile or disaster prone areas.” Who determines that? See Reference page for the link to the UN map of “World Heritage” and “Critical Biosphere” areas in the United States. How could such a stance ever be enforced? They have thought of that, too:
“Laws and regulations suited to country-specific conditions are among the most important instruments for transforming environment and development policies into action, not only through ‘command and control’ methods, but also as a normative framework for economic planning and market instruments. Yet, although the volume of legal texts in this field is steadily increasing, much of the law-making in many countries seems to be ad hoc and piecemeal, or has not been endowed with the necessary institutional machinery and authority for enforcement and timely adjustment.”
“8.14. While there is continuous need for law improvement in all countries, many developing countries have been affected by shortcomings of laws and regulations. To effectively integrate environment and development in the policies and practices of each country, it is essential to develop and implement integrated, enforceable and effective laws and regulations that are based upon sound social, ecological, economic and scientific principles. It is equally critical to develop workable programs to review and enforce compliance with the laws, regulations and standards that are adopted. Technical cooperation requirements in this field include legal information, advisory services and specialized training and institutional capacity-building.”
“8.15. The enactment and enforcement of laws and regulations (at the regional, national, state/provincial or local/municipal level) are also essential for the implementation of most international agreements in the field of environment and development… The survey of existing agreements… has indicated problems of compliance in this respect, and the need for improved national implementation… In developing their national priorities, countries should take account of their international obligations.”
“8.16. The overall objective is to promote, in the light of country-specific conditions, the integration of environment and development policies through appropriate legal and regulatory policies, instruments and enforcement mechanisms at the national, state, provincial and local level.”
These are rather chilling statements from an organization, the United Nations, to whom the United States gives approximately $6–$16 billion in annual support, far more than any other country.4 International obligations? “Programmes?” “Enforce compliance?” “…local/municipal level?” That seems a bit invasive coming from a global institution. I—and virtually everyone I know involved in land—and many others are all supporters of “sustainable” resources, good “land use”, a sparkling “environment” and helping less fortunate folks help themselves. I am a rancher. My life, income, passions and energy flow from the land. But, I have this nagging feeling that our concept of the end game of these objectives, and implementation by free individuals incentivized not only by conviction but because they are owners of and vested in land is wholly different than the grand plan of global authority, control, regulation and implementation envisioned by Agenda 21 and its supporters.
If ownership of property is a foundational cornerstone of liberty and self-reliance here in America, and the price of freedom is vigilance, than we all know what we have to do. Be informed, be aware, and stand shoulder to shoulder with our fellow landowners. Be particularly observant of any clues that some of these big picture notions are creeping into your state and local government’s policies, such as the use of the Agenda 21 buzz words “sustainable”, “vision”, and “consensus”. Whether you are a buyer, seller, owner or manager of land and real estate, the trends in today’s world mandate keeping yourself abreast of the actions and thoughts of other folks, within and outside of the United States, who may not share your convictions about the sanctity of private ownership of land and property.
The Feds—Hungry for Your Land
and Thirsty for Your Water
We have discussed financial regulations. Perhaps the arc of objectives in Agenda 21, and the federal government’s attempts to exercise increasing control over state and local lands, waters, and your private property, is coincidence. However, the undeniable facts are that when bills get blocked in Congress, the result is end-run enforcement actions by the Environmental Protection Agency, (EPA), the United States Department of the Interior (Interior) and the USDA. Let me emphasize that most of the people who work in these bureaucracies at the local level are good, hard-working souls. They care. Many of them strive to make a difference. I have worked with folks on conservation boards, local Farm Service Agency (FSA) and field people from the USDA in countless locations. Only in one case, over decades, did I feel a local conservation board and FSA field office had an ulterior motive.
I’m the EPA—I Must Destroy You to Protect You
The callous rules and regulations of the EPA fill tens of thousands of pages. It is impossible to discuss it all in this book. Here are just some of the highlights, regulations and potential enforcement actions which could affect each and every landowner at some point in time, if they don’t already.
Of Critters, Winged Things, Flowers and Fish
The Endangered Species Act (which also includes threatened species, candidate species and critical habitat) is among the most insidious. Which animals, fish or fowl or flora and fauna, are endangered or “threatened” is far less driven by science than by other, far-reaching ulterior motives of environmental groups using the EPA and other federal agencies as their foil to achieve objectives having nothing, or little, to do with the smokescreen of warm, fuzzy critters in danger.
It is no coincidence that many of the “concerns” that arise under the auspices of the Endangered Species Act regarding plants, animals and habitats seem to coincide, when mapped, with some type of actual or planned resource development—the northern spotted owl in the heart of prime Northwest timberlands, the greater sage-grouse throughout the oil and gas discovery zones of western states, the delta smelt, a three inch fish that ventured from the Pacific into irrigation systems in the San Joaquin Valley shutting down almost one hundred thousand acres of one of America’s most fertile and productive agricultural regions, to name just a few.
The result is not only restrictive policies that affect private parties, but a general cessation of resource utilization on federal lands that are owned by all of us. While some protections are good,
virtually all have been carried far forward of reasonable, affecting value, use, and infringing on private property rights. The administration of these regulations is cumbersome, snail-like, and sometimes politically motivated. And, unfortunately, Section 10 of the Endangered Species Act, which provides for proactive cooperative Habitat Conservation Plans—similar to conservation easements but without the perpetual commitment of property, is largely ignored.
Several years ago, we designed a pond on one of our Wyoming Ranches as part of our overall, multifaceted resource and agricultural improvements plan. The location was perfect, the water source excellent, and the water rights completely owned by the ranch. As I have recommended in this book, the pond was esthetic, created a fishery, allowed for upland grass utilization by livestock, provided water to several previously dry pastures, was used to augment irrigation, and contributed to wildlife values. It was properly designed and fully permitted by the necessary Wyoming agencies. In the review process, the U.S. Fish and Wildlife Service (USFWS) determined that this area could be prime habitat for the Preble’s meadow jumping mouse. Putting aside that there’s only been four specimens in the history of mankind of what might be that species, and half the biologists involved believed they were simply four mice with extraordinarily large heads, potential Preble’s meadow jumping mouse habitat, combined with greater sage-grouse habitat, is now interfering with improvements, oil, gas and other resource extraction, and other plans in many of the Rocky Mountains states.
USFWS was supposed to do a review and field visit. A month stretched into two, then four, then six. The contractors that had been scheduled to work on the pond got busy with other projects. Cost of the construction was increasing. The benefits to the ranch described above were delayed, in the case of agriculture resulting in a reduced crop yield. I finally called the USFWS administrator in charge of Preble’s meadow jumping mouse habitat. The conversation went something like this:
Land for Love and Money Page 9