Government and Real Estate

Farmland values not impacted by Kent County preservation program

November 14, 2012
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Farmland value holds under Kent County development rights program
There are 48,000 farm families across Michigan that help drive the state’s $94-billion agriculture industry. Photo via

Members of the Kent County Finance Committee have learned the county’s Purchase of Development Rights program has so far had little effect on the market price of farmland.

County Equalization Director Matt Woolford said buying the development rights doesn’t instantly alter a land’s value. “So it’s not immediate and direct, but clearly there is a use for those properties.”

Commissioner Jim Saalfeld, though, said a logical conclusion is that a PDR would reduce the value of a property somewhat because its use would be restricted, since a PDR bans commercial development on a property. “The PDR has to lower the value because you’re taking something away from the land,” he said.

Woolford said if homebuilders were putting up subdivisions on farmland — currently, not the case — then the PDR has little impact on what a property’s value is. “The assessor in each unit will have to make that determination. The effect can be determined for that unit, but not overall,” he said.

Commissioner Tom Antor remarked that on his trips to Lancaster County, Pa., to investigate its PDR program, officials there told him the value of the lands surrounding the preserved farms has risen.

Mary Swanson, Kent’s assistant administrator, said the county has purchased the development rights of 1,982 acres since the PDR ordinance went into effect in 2002 and has approved purchase agreements for another 300 acres a few weeks ago. The county’s average cost per acre over the past 10 years has been $2,401, an expense that has been funded by federal, state, local, county and foundation dollars.

In the last few years, however, the per-acre price tag has dropped drastically. Swanson said the average price for an acre was $3,934 from 2005 to 2008. But from 2010 to today, the average has been $1,634. “The prices have varied over time. The last couple of years, we’ve seen a drop,” she said.

Swanson also told the committee the county still has foundation dollars available for the PDR program, which Kent uses to help meet the local match required by federal grants. She said there was $104,165 left from a three-year grant the county received from the Grand Rapids Community Foundation, and $135,786 from a three-year grant from the Frey Foundation.

Both grant agreements required a set contribution from the county to receive a full share each year, a requirement Kent failed to meet. So the foundations prorated their yearly amounts to match the county’s annual allocations to the program and that was why there are dollars available.

“There still is money on the table, so to speak, from those grants,” said Swanson.

But Commissioner Jim Talen said the county has left about $250,000 on the table that could have gone to good use in the program because commissioners didn’t meet the grants’ requirements. “I’d like to see us use that $250,000,” he said.

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