30 June 2005

Why do Houses Cost so Much???

Have you ever wondered what goes in to the price of a house or a residential lot? Well, the majority of the costs are associated with land acquisition. Land, which may have been held for generations or traded many times within a year. Regardless of the mechanism of ownership, one thing is for certain -- they don't make it anymore. Constraints placed upon developable land only drives up the costs of land which is free of any constraints.

The U.S. Fish and Wildlife Service (Service) has released a draft economic analysis that estimates the costs related to conservation actions for vernal pool species at a whopping $992 million during the next 20 years, with 97 per cent of the cost “relating to lost development opportunities.” Where I live and work as an environmental consultant, housing and development are the main contributors to the economy of California's Central Valley. Gone are the days of acres of tomatoes and peppers. Sugar comes from the Caribbean -- not from beets refined in Manteca by Spreckles. The valley is not the agricultural hot bed it once was. However, growth is still at the root of the economy. We grow houses. Lots of them.

The $965 million in lost development opportunities is based on an estimate that 259,814 housing units would normally be built in the 36 counties where critical habitat was proposed. Critical habitat would result in a reduction of 1,618 housing units, according to the analysis prepared for the Service by CRA International, an Oakland-based consulting firm.

What this means is that the critical habitat designation is destined for lands which are privately owned. Lands which may represent the sole source of income or behest for a family.

Further, the analysis says that "“roughly half of all economic impacts are attributable to less than five percent of designated acres‚" of critical habitat. In each of three California counties, the lost development impacts exceed $100 million: Sacramento $374 million, Butte $154 million, and Placer $120 million.

In releasing the analysis, the Service reopened the public comment period on both the proposal to designate critical habitat for the vernal pool species and on the draft economic analysis. The Service will accept public comments for 20 days. The closing date for comments is July 20.

In its notice, the Service advises that it is considering excluding from critical habitat the areas that represent 80 percent of the costs of the designation. It asks for comments on the possibility of excluding 35 or 50 of the highest cost areas, representing 90 percent and 95 percent of the costs respectively.

The Service is under court order to publish, by July 31, a final critical habitat rule for land previously excluded in five California counties (Butte, Sacramento, Solano, Merced and Madera ). All proposed critical habitat in the five counties was excluded in the 2003 rule.

The 15 vernal pool species are protected under the Endangered Species Act (ESA). Four tiny freshwater shrimp were listed as endangered species in 1994. Eleven vernal pool plant species were listed in 1997. On Aug. 6, 2003, the Service designated 740,000 acres of critical habitat for the species in 30 California counties and one Oregon county. The final designation was a reduction from the 1.7 million acres the Service originally proposed as critical habitat on Sept. 24, 2002.

In January 2004 the Butte Environmental Council filed suit challenging the exclusions. In an Oct. 28, 2004 order, the U.S. District Court for the Eastern District of California directed the Service to reconsider and to provide opportunity for public comment on the exclusion, then publish final critical habitat in two actions.

The first action occurred on March 8, 2005, when the Service confirmed its exclusion of 136,358 acres due to non-economic reasons. That land had originally been excluded because it was covered by protective measures, including Habitat Conservation Plans (HCPs), state wildlife lands and Department of Defense lands.

The second review directed by the court relates to the five counties originally excluded for economic reasons. In its court pleading, the Service advised that "“at a minimum, it is appropriate to reopen the comment period, reanalyze all of the areas excluded pursuant to Sec. a (b) (2), and make a new determination."” It is that process which led to the new economic analysis. The court directed the Service to complete its reconsideration of the critical habitat exclusions in the five counties and publish a final critical habitat rule by July 31, 2005. Under the court order, the designated critical habitat in the other 31 counties remained in place during this process.

Critical habitat is a term in the ESA. It identifies geographic areas that contain features essential for the conservation of a threatened or endangered species and may require special management considerations or protection. The designation of critical habitat does not affect land ownership or establish a refuge, wilderness, reserve, preserve, or other conservation area. It does not allow government or public access to private lands. Federal agencies that undertake, fund or permit activities that may affect critical habitat are required to consult with the Service to ensure such actions do not adversely modify or destroy designated critical habitat.

Areas designated as critical habitat for the 15 species may be found on the August 8, 2003 press release.

When specifying an area as critical habitat, the ESA requires the Service to consider economic and other relevant impacts of the designation. If the benefits of excluding an area outweigh the benefits of including it, the Secretary may exclude an area from critical habitat, unless this would result in the extinction of a threatened or endangered species.

In 30 years of implementing the ESA, the Service has found that designation of critical habitat provides little additional protection for most listed species, while preventing the agency from using scarce conservation resources for activities with greater conservation benefits.

Provides little additional protection, yet prevents a rightful owner from fulling the highest and best use of the land.

In almost all cases, recovery of listed species will come through voluntary cooperative partnerships, not regulatory measures such as critical habitat. Habitat is also protected through cooperative measures under the ESA, including Habitat Conservation Plans, Safe Harbor Agreements, Candidate Conservation Agreements and state programs. In addition, voluntary partnership programs such as the Service's Private Stewardship Grants and the Partners for Fish and Wildlife program also restore habitat. Habitat for listed species is provided on many of the Service's National Wildlife Refuges, and state wildlife management areas.

Voluntary cooperative partnership? I wouldn't call designated someone's property as anything other than what that person sees fit as "voluntary."

Comments on the proposed critical habitat and/or the draft economic analysis should be submitted to: fw1_vernalpool@fws.gov or by fax to: 1.916.414.–6710, or by mail to: Field Supervisor, Sacramento Fish and Wildlife Office, U.S. Fish and Wildlife Service, 2800 Cottage Way, Suite W-2605, Sacramento, CA 95825.

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