Land Conservation Options

Introduction

Arlington occupies only about 5.5 square miles (3,517.5 acres) and, according to the 2010 U.S. Census, 42,844 residents live in a mix of single-family homes, two- and three-family homes, condominiums and apartment buildings. The Town’s small residential lots (averaging 6,800 square feet), high population density, and relatively small amount of undeveloped open space are among the reasons why Arlington residents seek to preserve, protect and nurture their community.

There are many advantages of land conservation, especially on a small scale in a densely developed community like Arlington.

  • Provides breathing space in the midst of dense residential and commercial development;
  • Increases habitat diversity for birds and other native wildlife and vegetation;
  • Improves air quality and decreases runoff of storm water, road sand, lawn herbicides and pesticides, and oil from cars and trucks;
  • Controls flooding through protection of wetlands; and
  • Creates public access to open lands and water bodies so that residents can commune with nature.

This introduction to land conservation options is designed to alert landowners to the need to protect Arlington’s remaining undeveloped residential lots and to encourage them to take steps to permanently conserve land in their ownership Most at risk are lots that are zoned for two or more houses (but host only one house) and lots of sufficient size that they could be subdivided and redeveloped with two houses. A drive through Arlington will confirm that houses and commercial buildings are regularly being sandwiched onto surprisingly small lots in already dense neighborhoods.


Donating Land for Conservation Purposes

Donating land for conservation entails conveying the land to a conservation organization, such as the Arlington Land Trust, or public agency such as the Town without compensation or for a nominal fee (as little as $1.00). Ownership and management responsibilities are transferred to the donor organization or agency, thereby ending the landowners’ property tax burden. Donation of the land provides the landowner with maximum income tax and estate tax benefits and avoids the capital gains tax. Donations may occur during one’s lifetime or upon death as provided in a will. One can donate an entire property lot or a smaller portion of the parcel.

Benefits

  • Is simple and straightforward.
  • Benefits adjacent or nearby property, including any nearby land retained by the donor.
  • Often results in a substantial income tax deduction and other tax savings.
  • Eliminates property taxes on the donated parcel.
  • Is permanent.

Possible landowner concerns

  • Conveys ownership and control of the property.

Donating a Conservation Restriction (CR)

One of the best ways to protect a property while retaining ownership is to donate a permanent conservation restriction (CR), also known as a conservation easement, to a nonprofit organization or government agency. The landowner retains full ownership and the ability to sell or convey the property, by deed or will or through gift or sale, but such a sale or conveyance will always be subject to the terms of the CR document. In effect, the CR becomes a permanent part of the deed to the property. When granting a restriction to an appropriate organization or public agency, a landowner agrees to restrict development and use of the property as specified in the CR. The CR must be accepted and recorded by the recipient agency or organization, which is then legally empowered to monitor and enforce the agreement. Although conservation restrictions are donated and enforced for the benefit of the public, they do not automatically give the public the right to use the property.  Any public access or use must be specifically included in the CR Massachusetts law (M.G.L. Chapter 184, Sections 31-33) authorizes conservation restrictions, and both the Town Board of Selectmen and the Massachusetts Executive Office of Energy and Environmental Affairs must approve the transaction.

Benefits

·         Leaves land in private ownership
  • Terms of the CR can be tailored to the needs of the landowner and the conservation values of the property.
  • May provide a charitable income tax deduction and reduce property and estate taxes.

Possible landowner concerns

  • May be difficult to meet state requirements when the parcel is small.

 “Bargain Sale” of Land for Conservation Purposes

In a bargain sale, land is sold to a nonprofit organization or public agency for less than its fair market value. This approach makes the purchase more affordable for the agency while still providing financial benefits to the landowner.  A bargain sale provides immediate cash, avoids some capital gains taxes, and allows a charitable income tax deduction based on the difference between the land’s fair market value and its sale price. A bargain sale is one way to close the gap between the funds available to the land trust or government agency and the price the landowner would like to receive.

Benefits

  • Provides the landowner with immediate income while protecting the property for conservation purposes.
  • Offers the landowner additional tax-reducing benefits.
  • Reduces the cost to the conservation entity acquiring the land.

Deed Restriction or Other Interim Techniques

Deed restrictions can provide interim protection to give both the landowner and the land trust time to explore permanent conservation alternatives. Deed restrictions and mutual covenants are most appropriate where they protect features of local importance, primarily for the benefit of adjacent residents. However, they are do not provide tax advantages to the landowner, and they are not permanent. Generally they last 30 years in Massachusetts and can be renewed before the end of that period to last up to 90 years. Nevertheless, deed restrictions remain an important tool for conservation organizations where a permanent conservation restriction cannot be arranged.

Benefits

  • Leaves land in private ownership with certain limitations.
  • Provides temporary protection when other options are not available.

Possible landowner concerns

  • Do not give an income tax deduction or reduce property or estate taxes.
  • Are often as complicated and time-consuming as permanent solutions.
  • Do not provide permanent conservation protection.

Considerations and Questions

Land conservation decisions can involve complex and interrelated issues in property tax law, estate planning, real estate, and conservation management. Landowners interested in pursuing the donation of land or any form of restrictions on the future use of their land should consult with an attorney, appraiser, financial planner, and other advisors experienced in land conservation transactions, real estate and tax matters before concluding any such agreement.  However, conservation organizations such as the Arlington Land Trust can help set up solutions and answer many basic questions before other types of expensive services are needed.  We can work with interested landowners to evaluate the following points, which will help to determine the best conservation option for each situation.

  • What are the conservation values and special scenic, historic, or ecological features of the property?
  • What are the landowner’s motivations and goals for conserving the land?
  • What are the landowner and land trust’s financial status and goals?
  • What are the tax implications, costs, and benefits of the various conservation options?
  • What are the needs and interests of other family members?
  • Does the landowner wish to retain ownership of the land after it is protected? If not, will the land be transferred during the owner’s lifetime or posthumously through a will?

Next Steps

Many resources are available in print and online. If you are interested in more information about how the Arlington Land Trust may assist you in conserving your land, please contact info@arlingtonlandtrust.org.