The cost of "saving": you take it, you pay for it.

NEEDED: A way to even the playing field when private landowners are asked to bear the burden of environmental regulations.

Suppose we spin a Wheel of Fortune in which the segments are labeled teachers, writers, coal miners, biologists, bus drivers, and so on. And whomever the arrow points to when the wheel stops will have to pay, say, $20 or $30 million for the longleaf-pine stands needed by the endangered red-cockaded woodpecker. The group targeted by the next spin would pay for a few hundred thousand acres of grizzly habitat. Then lands for desert horned lizards, Puerto Rican crested toads, and Connecticut rattlers. Then wetlands, scenic-river basins, greenbelts, and farmlands.

Sound crazy? The system by which we choose who really does pay for environmental protection appears just as crazy to the people to whom the arrow points.

Back in the days when we wanted a few well-defined parks and seashores, and the national debt was a lot lower, government bought what we wanted with our tax money. Today the polls say we want a lot more--but not if we have to buy it--so we take what we want by law and regulation. The property owners from whom it is taken feel singled out by a Wheel of Misfortune.

Is this a case of the public good versus individual rights? Even assuming that everyone agrees that the Connecticut timber rattler is a public good greater than moderate-income housing, is it fair to single out one or a small group of citizens to bear the cost? This is the question behind the environmental movement's greatest challenge. Vice President Gore says we must make sweeping changes. Among those are Interior Secretary Babbitt's sensible proposal that saving entire habitats is more important than saving species. But the more environmental change we want, the bigger the "taking" problem will become.

We have grown so accustomed to assuming that environmental measures are opposed by the callous and greedy and supported by the public in general that we fail to understand that this is not a problem of us or them. If the American public has a subterranean bedrock unity, it is the right to enjoy private property--at least our own.

I am reminded of Professor X, a specialist in Latin American studies who believed strongly in laws and taxes to spread out American wealth more fairly, and in the redistribution of land. He believed in what people often call "economic justice." In the middle of the 1970s, when I was both president of a state conservation group and a realtor helping landowners create environmentally sound development, he asked for help in dividing some lots from a 100-acre farm he owned. When he saw my plan and the prices I suggested, he said, "Well, I thought I could get almost twice as much for these lots."

"You can," I said. "But these prices give you more than a 50 percent profit, and I thought you were interested in seeing that the land was available to the greatest number of people possible."

In those years, I worked near a university community polarized by the Vietnam War and many social issues. I discovered that when it came to money, the country was not divided into conservatives and liberals, or environmentalists and exploiters. I went on to become a specialist in property values and an appraiser for scores of landowners whose properties were being taken in whole or part for lakes, conservation easements, greenways, parks, footpaths, bikeways, and universities. And for environmental groups and governments that did the taking and regulating. I learned that only the rich and people near the end of their lives willingly give land away for nothing, and they usually take the tax deduction. In America, I learned, Professor X was Everyman.

Underneath his special interests, he was like rural landowners east of here in the North Carolina coastal plain who say they are suffering from "RCW." That's Red-Cockaded Woodpecker, an endangered species that nests in mature longleaf pine. One man whose father began managing more than 7,000 acres of longleaf pine for wildlife and timber found out that his trees had grown old enough that they had become RCW habitat. Dan Gelbert, a consulting forester in North Carolina, says the family's careful management has endowed it with some $2 million in timber that can't be cut, because cutting timber anywhere near a nest tree would violate the law.

Gelbert says a farm widow called him recently and asked that he sell all of her growing longleaf pines before they got old enough to attract woodpeckers. Another client, an elderly farm couple, learned they could not cut their last stand of mature pines to pay their medical bills because they have RCW.

Across America, government regulations--from local zoning to the Endangered Species Act and the Clean Water Act--have demanded changes in life-styles and land use, and they usually impose real costs on landowners.

Environmentalists who back these regulations and discount the costs too quickly assume opponents are driven by greed and callousness. An article in the National Wildlife Federation's bulletin for its affiliates calls people fighting to receive compensation for lost values "anti-environmentalists."

WHO IS THE PROPERTY-RIGHTS MOVEMENT?

Ann Corcoran of Maryland has a forestry degree from Yale and worked as an Audubon Society lobbyist until the late 1980s. But when the National Park Service started what she says were secret maneuvers to incorporate her home and land into Antietam National Battlefield, she saw the side of regulation that has divided America. The Corcorans, like many neighbors, have gone to great expense to restore their home, a former Civil War hospital. Although she has kept her home, she was insulted that a government agency considered itself a better custodian of her property. She became a property-rights activist.

Peggy Reigle retired as vice president of finance for the New York Daily News, bought an abandoned farm, and settled in to enjoy the beauties of Maryland's Eastern Shore. When wetlands regulations threatened to wipe out the savings her neighbors had invested in land, Reigle became a property-rights activist. In July 1990 she promised her husband her fight would be over by Thanksgiving. Today she chairs the Fairness to Land Owners Committee (FLOC), which has some 12,000 members in 45 states, and says she is working 12 hours a day, seven days a week without pay.

Environmental groups sometimes try to equate property-rights advocates with the Wise Use movement, which is heavily loaded with western ranchers, large-scale farmers, and mining, timber, and other extractive users. The amorphous Wise Use movement embraces the goals of the property-rights movement, but last October representatives of more than 130 corporate foundations--including Apple, Chevron, and Ford--heard a surprising report on this question at the Environmental Grantmakers Association. Debra Callahan, author of a report on the property-rights movement sponsored by the W. Alton Jones Foundation, surveyed 50 states and concluded the movement was not allied with Wise Use and its members are not the foot soldiers of corporations. The Wise Use movement's focus is on rights to public lands and resources--rangeland, mineral deposits, rivers, and forests. The property-rights movement, Callahan reported, focuses on government action that affects private lands. Callahan told the meeting, "This is pretty much a grass-roots movement." These roots, the diversity of groups, and their modest means, Callahan concluded, made discrediting them difficult. "Some of the grass-roots groups are dirt poor. Which is a problem because it means there's no silver bullet."

Just as environmental groups find support and money from oil companies and other industries, property-rights groups have found philosophical backing from a variety of conservation groups, including members of the Wise Use movement.

REGULATION VS. THE BILL OF RIGHTS

In fact, property-rights activists are fighting for a tradition that is basic to the American psyche and system of government. Like environmental groups, they have gone to court quoting the Bill of Rights and winning the most important series of battles since the civil-rights movement.

The trend began to gather momentum in the mid-1980s. When floodplain zoning in California left a Lutheran Church with nothing but picnic property, the Supreme Court ruled that when government leaves a property with no commercial uses, it must pay. When the owners of a piece of coastal property tore down an old house there and asked permission to build a larger one on the site, the California Coastal Commission said yes, but required the owner to dedicate a third of the property to public use. In 1987 the Court said the requirement had nothing to do with the Commission's real purpose--protecting the coast.

This decision had to be in the mind of Maryland's Secretary of Natural Resources when he found out the state's Department of Environment had been demanding deed restrictions unrelated to coastal protection. (Developers commonly attach deed restrictions, or covenants, to a property record to specify such things as home size, appearance, or land use to the buyer and all future buyers.)

In one case the state told a landowner who wanted to build his retirement home on a half-acre of his 18 acres that in return for a permit he would have to record a deed restriction prohibiting the development of any more land. In this case state officials dictated covenants that would save open space but only by gutting the owner's investment. Soon after Peggy Reigle confronted the Secretary with this situation at an Ocean City meeting, the governor ordered an end to the practice of offering permits for restrictions.

NEW LAWS FOR AN OLD PROBLEM

Court cases to decide these issues soak up millions of dollars. Property-rights activists have proposed dozens of state and federal laws to put teeth in the Fifth Amendment's "just compensation" promise. In 1993 more than 20 state legislatures have considered "assessment bills" or "compensation bills." Assessment bills require the state to define when a regulation that destroyed value requires payment. A compensation bill requires payment if the damage reaches a certain threshold. A bill sponsored by a third of the Florida House would have required compensation if a regulation reduced a property's value by more 40 percent or more. In Congress, Senate minority leader Bob Dole has gathered 21 Republican sponsors for a taking bill. In the House, California Democrat Gary Condit's bill convinced 61 cosponsors. House Republicans under the leadership of California freshman Richard Pombo, a 32-year-old farmer, have formed the Congressional Property Rights Task Force to hold hearings and draft new laws.

THE COMPLEX NATURE OF OWNERSHIP

The chain of legal action that eventually led to American property laws began in 1215 with the signing of the Magna Carta. Until that time property was not so much owned as "held," hence the still-used term "landholders." The king granted his nobles rights to hold manors so long as they pledged loyalty and would defend the king. The barons who forced King John to sign their Magna Carta or Great Charter were particularly grieved by "arbitrary infringements of personal liberty and rights of property." Article 28 of the Magna Carta says, "No constable or other bailiff of ours shall take grain or other provisions of any one without immediately paying therefore in money..."

Reinforced by philosophers and by private property's role in creating an individualistic middle class and unprecedented prosperity, these attitudes became part of the Constitution's Bill of Rights, a clause at the end of the Fifth Amendment:

"...nor |shall any person~ be deprived of life, liberty, or property without due process of law nor shall private property be taken for public use, without just compensation."

This phrase, like the entire Constitution, conveys to citizens a right as old as Roman law. Property, or ownership, is actually a "bundle of rights," like a bundle of sticks. The bundle of rights concept can make life very complicated when the public and private sticks clash. Environmentalists argue that landowners' loss is eventually compensated by a healthier economy and other public good. That still means, though, that a few individuals are chosen to be the investors while the fruits of their sacrifice are distributed to everyone.

As regulations touch more and more land, both citizens and the courts are thinking harder about how to defuse the taking issue. If the trend in lawmaking and court decisions continues, enforcing regulations is going to become more and more expensive.

THE PROBLEM AS THE SOLUTION

More than 10 years ago the Natural Resource Defense Council's sharpest thinker, Peter Borelli, warned that environmentalists had "ignored certain basic facts of life in America. Borelli said extremists had not caused the repeated defeat of better land-use laws. "The real cause," he said, "has been the inability of reformers to deal with rather than confront prevailing attitudes about the land." For most environmental groups, the self-interest of property owners still seems like an unmovable obstacle. Jay Hair, president of the National Wildlife Federation, sees few alternatives to the present government command-and-regulate system. He says that "the federal bureaucracy's red tape is sometimes frustrating, |but~ the substitutes for ESA mandates would be persuasion and consolation." This sounds out-of-date to the growing number of people who think government interference is a bigger environmental problem than private property. They point to environmental report cards issued by groups like National Wildlife Federation and Worldwatch Institute. The decrease in environmental quality described by these reports comes at the same time as regulation has increased. This may not be cause and effect, but it argues that regulation alone is not the answer.

Senator Bennett Johnston (D-LA) introduced a bill this year to provide $1 billion per year for federal land purchases. Both environmentalists and Interior Secretary Babbitt were enthusiastic, but Administration officials said there was no money for the bill. Utah's Senator Robert Bennett suggested the government sell some of its larger holdings to buy environmentally important lands.

The Nature Conservancy is the best-known purchaser among environmental groups. Since 1951 the Conservancy has acquired some 5.5 million acres. The Conservancy and other organizations also economize by buying only those ownership rights they really want. Ducks Unlimited, founded in 1937, has improved more than six million acres of habitat in several countries, in many cases buying only a conservation easement--a guarantee that an owner will not disturb the wetlands.

Deseret Land and Livestock Corporation and International Paper have both proven that environmental protection and business can mix. Ecologically sound management of Deseret's 200,000-acre Wyoming ranch has allowed the company to increase both its cattle herd and wild elk herds while earning extra income from hunting fees. International Paper's southern holdings are larger than Yellowstone, and the company has set aside areas for wildlife. Hunting, camping, hiking, and fishing fees have made the program profitable.

Some land conservancies and private developers have already done this with real estate development. They buy land with important resources, set aside the vital areas or write covenants to protect them, then allow controlled development under their rules to pay the expenses. The Nature Conservancy frequently sells land it receives that has no special natural value.

In Brazil, naturalists have proposed that chemical and pharmaceutical companies buy rights to set aside forests as biodiversity preserves where they could prospect for valuable chemical compounds that might lead to new fuels or drugs. In Siberia, some local governments have welcomed privatization as a way to stabilize reindeer production by assigning herds to private owners who will be more sensitive to overgrazing of tundra and forests than the old collectives where bureaucrats tried to maximize short-term production.

DISCOURAGING PRIVATE PRESERVATION EFFORTS

Private efforts to use rather than consume natural resources--like forests--have been hampered by what might be called unfair dumping by competitors. The competitors are state and national governments who sell recreation rights (read entry fees) at far below actual market value. For example, hunting rights are free to 48,000 acres of federal B. Everett Jordan Lake near my home. That's a powerful disincentive for local landowners who might consider preserving wildlife habitat. Only eventual overcrowding on free government trout streams will encourage private landowners to nurture their own trout streams.

Scholars at the Pacific Economy Research Center are developing a variety of free-market solutions to environmental controversies. But even the free-market enthusiasts there recognize that the market doesn't care about everything. Where incentives and the free market won't work, PERC senior associate Richard Stroup says, we must establish priorities, focus on habitat rather than species, and budget the money where the needs are.

If the government pays when it takes property in time of war, Stroup argues, why should protecting wetlands or endangered species be different? Paying for preservation may be expensive, but there may be no choice. The courts seem ready to implement Justice Holmes' concept that when the degree of damage becomes severe, a taking has occurred. And in any case, under our system of government, making enemies of landowners guarantees precious funds will end up in lawyers' pockets, and too often the environment will lose.

PRESERVATION AND PEACE WITHOUT SPENDING MONEY

But taxes do not have to be the sole source of compensation. One of the most talked-about, least-expensive, and yet seldom-tried mechanisms for regulating land uses is the transferrable development right or "TDR." The theory is simple: A county or state assigns every acre of land a certain number of development rights--say 10. Then it zones. In some places one house is permitted per 100 acres. Maybe it's a forest where the city wants a greenbelt. That leaves 99 TDRs the property owner can't use. Meanwhile, an acre in the city is allowed 100 apartments in a high rise. Like the single acre of farmland, it has 10 rights. It needs 90 more to build the whole project.

Here the market takes over. The developer advertises for rights just as he or she might advertise for land. The forest owner can sell 10 or 90 rights to the developer. They negotiate the price just as they would negotiate the price of a piece of land. In the end the landowner has sold just one stick out of his bundle of property rights. He or she can still cut timber, lease hunting rights, etc. The community has the benefit of a forest nearby, and except for setting up the system, taxpayers haven't paid a nickel or taken a landowner's investment or savings. Unfortunately, TDRs are seldom tried until development is well under way and installing the system is very complex. Montgomery County, Maryland, adjacent to Washington, DC, has one of the country's most sophisticated TDR systems.

Even simpler is straight barter. The federal government already owns between one-quarter and one-third of all the land in the U.S. Using the new National Biological Survey as a guide, some of this could be sold and the proceeds used to purchase conservation easements on ecologically valuable natural lands. Alternatively, as San Francisco lawyer Mark Pollot has suggested, the federal government could compensate landowners whose land it wishes to preserve by simply trading land with them. Both methods would be a kind of environmental trading-up for the environment, and perhaps an economic boon for the landowner.

People like Ann Corcoran and Peggy Reigle believe that's the way it ought to be when private landowners are asked to bear the burden of regulations. They believe that when environmentalists recognize the rights of property owners, they will have reconnected with mainstream America.

I think we're going to see a third wave of the environmental movement, Peggy Reigle predicts. For Corcoran, that wave will begin with "the first environmental group that works with landowners, instead of against them."

PUBLIC WELFARE VS PRIVATE RIGHTS: THE LEGAL CHALLENGE CONTINUES

The surge in environmental interest in the 1990s--marked especially by the 1992 Earth Summit in Rio--has sparked once again a long-running debate over how far government should go toward regulating the rights of private-property owners in order to protect the welfare of society at large. As author Wallace Kaufman points out, many private landowners feel that federal, state, and local governments are increasingly going too far in restricting their actions and, in effect, diminishing the economic value of their property. However, these restrictions reflect widely held public perceptions that there is a need to protect environmental values for society today, as well as for future generations, and that one of the best ways to accomplish this, in the absence of private initiative, is through regulation.

The debate over public welfare versus the rights of private forest landowners has been going on for at least a century in the U.S. In the late 1800s and early 1900s, courts broadly endorsed the use of state police power to regulate private forestry and land-use actions in the public interest. Legal challenges to early forest-regulatory programs were generally denied on the basis of either the right to protect the environment from harmful spillover effects from private lands or to protect the rights of future generations. Even today, according to Frederick Cubbage and William Siegel, writing in the Journal of Forestry, most regulatory programs affecting private forest land are likely to meet most legal challenges, since they usually allow for at least a reasonable return on private investment and, at the same time, provide valuable public benefits.

Although the debate over public welfare and private rights is sure to continue and regulation will always be a policy tool, another approach is to seek ways to protect both environmental values and private-property rights through non-regulatory mechanisms. This is the approach that AMERICAN FORESTS is taking through a series of workshops to be held by our Forest Policy Center. The project "Building Partnerships for Ecosystem Management on Forest and Range Lands in Mixed Ownership" will examine ways in which landowners on intermingled public and private lands can cooperate in the planning and management of their lands. If we are to meet the goals of ecosystem management, planning and management at the landscape level will be critical, and efforts at this scale will almost always require the cooperation of various landowners.