Land and landscape: A backdrop and a business
The grain mills have rusted away, the clothing assembly lines are silent, and the apple business has mostly rolled o to North Carolina, Winchester, the Pacific Northwest and China. Rappahannock County’s surviving treasure is land — land tucked inside sunsets, punctuated by fences and streams, home to calf-and-cow operations, vineyards, ne eateries, art galleries and footpaths. The cows, cooks, artists, tourists and retirees all are here because of the land, whether they gaze at it or graze on it. The county treasury needs it just as badly: real estate taxes this year will bring in $10,668,017, or 70 percent of local revenue, to support the schools and help fund a panoply of services.
But ringed by towns and exurbs subject to crowding and commerciality, Rappahannock’s timeless hills command ever
higher prices. The average price per acre has soared from just under $ 1,000 in 1974 to about $ 7,000 in 2017. In 2020, despite COVID- 19 ( or maybe because of it), real estate offices and construction firms have never been busier, with building permits rising above pre-pandemic levels. By driving up prices, land buyers threaten the landscapes that enthralled them in the first place, because for farmers, costlier land makes it harder to get started or show a profit after taxes. Should a developer approach, it’s more tempting to cash out.
For the artist, tourist or weekender, the land needs to be a beautiful and evocative backdrop. Not so for most farmers and owners of substantial parcels. For them, the landscape is also an economic asset. It doesn’t only have to be protected; it also needs to generate income.
The threat of landscape loss extends far beyond Rappahannock County. The American Farmland Trust found that between 2001 and 2016, 11 million acres of U. S, farmland was paved over, chopped up and built on, effectively taking those thousands of pastures out of agriculture forever. Some of the lost farmland still looks something like a farm, though it has effectively become a piece of exurbia. In Virginia, in the same time period, 340,000 acres of farmland, twice the size of Rappahannock County, was developed or threatened with development.
Using one measure of development — population density — Rappahannock County is succeeding in maintaining its open spaces, notwithstanding its 75-mile proximity to a major metropolitan area. In 1930, there were 28.9 “persons” per square mile in the county, and following a decades-long tapering o in population, the latest calculation shows 27.7 per square mile — still below the level 90 years ago.
The number of farms has been rising, with fluctuations; in 1987, there were 288, and in 2017, there were 439. But the farms are getting smaller, shrinking from an average of 268 acres in 1987 to 160 acres in 2017.
Taxes: A tool for conservation
Tax policy has always been a tool for encouraging some activities and discouraging others, and in Rappahannock they’re calibrated to encourage farming, forestry and generally, letting land be. Conservation easements lower tax rates while placing permanent limits on development. But some farmers want a tax break without taking options away from future generations. So in 1982, the county adopted land-use tax deferrals to keep the farmers farming, including weekenders who grow hay that a farmer cuts, bales and takes away. Deferrals also are available for land used for forestry and horticulture (the latter being a tiny proportion of the acreage subject to land use). In some cases, the bene t shrinks the tax bill to about half of what it would be if taxed at fair market value.
To qualify, residents must have at least ve acres dedicated to agriculture or horticulture, or 20 acres in forestry, to gain that land-use deferral. The arrangement — particularly when applied to those whose only crop is hay — can be an irritant to longtime residents whose taxes are based on fair-market value because their holdings are too small to meet the land-use threshold. But by giving the weekend hay farmers an incentive to enter land-use, the tax structure helps cattle farmers avoid buying hay. Easing the nancial strains, it keeps farmers farming, and protects the landscape.
By any measure, land-use is widely used — and popular. Together with conservation easements and public land holdings, it whacks deeply into the revenue that the county might earn from its main asset. Here’s the breakdown: Starting with 170,496 acres, the Commissioner of Revenue Mary Graham must immediately subtract the untaxable Shenandoah National Park as well as various taxexempt properties, plus highways, roads and rights of ways, leaving 136,581 acres of taxable land. Of that, 33,634.9 acres are under conservation easement and 83,363.8 acres are in land-use. That leaves just 19,582 acres, 14 percent of all taxable land, that is taxed at fair-market value.
Farmers say that without today’s land-use tax breaks, for-sale signs would proliferate and Rappahannock’s beloved landscape would begin to mutate. According to Mike Kane, the Piedmont Environmental Council’s land conservation director, studies show that land-use tax deferrals, by easing the burden on farmers, help preserve the landscapes that visitors and homeowners prize, generating more economic gains for the county than they cost in lower tax receipts. He adds, “You can’t nd a study that doesn’t support the notion that agricultural and open spaces generate more revenue than they demand in services.”
Given its commitment to protect farms and farmers, the county counts on construction of new houses to generate new tax revenue. There are 171 homes that the assessors designate to be “mansions,” old and new. Amassing to a total assessed value of $202 million, the mansions account for 12.7 percent of the taxable value for the county. Says Al Henry, a member of the county’s Planning Commission: “That’s where the increases in our taxes is going to come from — people building houses.”
Of course, there can be too much of any good thing: Build
too many over-large, showy houses in visible locations, and the county loses its rural ambiance. So far this year, there are 20 building permits for new homes, up from 17 a year earlier. The 20 new structures covered by this year’s building permits will provide a boost in the county’s tax revenues, but, depending on location and design, some may encroach on a cherished landscape.
For the time being, there is no groundswell to raise taxes on land that’s farmed, forested or protected under easements. In fact, the one idea that gets some attention is an additional land-use category for “open space.” The State of Virginia allows this tax break, and a number of neighboring counties, such as Madison and Fauquier, have adopted it. The open-space tax break was initially understood as a way to encourage golf courses and other private recreation spaces. But experts point out that the participating county can attach a variety of conditions to qualify, such as cultivating native plants, providing habitat or encouraging pollination. And to avoid competing with the farming tax deferral, the county could set the tax reduction for open space below that for agriculture.
Here’s a hypothetical situation where an open-space tax break could help preserve the landscape. A large farm cuts back, opting for a family farm, or smaller, more specialized commercial operation. The land taken out of active farming would lose its agricultural land-use advantage, immediately bouncing into a highertax category. The owner might decide to carve the old farm into parcels to sell to home-builders. An open-space landuse deferral would allow the farmer to
retain the agricultural land-use deferral for the new, smaller farm, applying the open-space tax advantage for the rest. The formerly farmed land would be tended according to healthy land-use practices, encouraging native plants and pollinators, which would bene t neighboring orchards and vineyards. As a result of careful environmental management, if the land were to transition back to active farming, it would be in healthier condition. It’s not known how many Rappahannock land-owners would claim the openspace tax deferral if it were available, but PEC analysts say it has worked well in Fauquier and Madison counties, without resulting in a signi cant loss of tax revenue.
Land as business
Farmers and conservationists see landscape preservation as a threelegged stool: conservation easements to remove land permanently from development; land-use tax deferrals to lighten the tax burden on land under management; and third, business strategies for generating enough income from land to reduce the Modest population temptation to sell. growth projected
The strategies don’t follow a
e median number of
single rule other than a willingness on people the part in the of county landowners is to rethink projected and to reinvent. increase A look at two de ning by about agricultural 700 people in mainstays for Rappahannock the next two decades. — cows and apples — underscores how much, and 7,996 how quickly, 7,618
7,252 rural economies can shi . The cattle population, which stood at 17,548 in 2002, dropped to 12,997 in 2017. The prospective sale of the 7,000acre Eldon Farms would bring the numbers down further. Apples, once an economic engine, show an even starker decline; orchards occupied 1,378 acres in 1992, but by 2017 covered just 211 acres in the county.
U.S. agriculture is increasingly concentrated, dominated by a handful
2018 2028 2038
of processors and distributors,
Source: American Community Survey
with prices set by sweeping market
e Rappahannock News
forces well outside the control of the producers. “The large commodity-type markets aren’t friendly to agriculture on the scale that is practiced in Rappahannock County,” says one land-use expert in the region. But because cows need large swaths of land for grazing, the calf-and-cow businesses are uniquely valuable in keeping Rappahannock’s landscape looking as it does now.
For comparison, a major vineyard adds beauty, diversity and income to the county, but it requires no more than about 25 acres. A comparably positioned cattle farm needs ownership of, or access to, hundreds of acres. Once the land is in place, these businesses can generate pro ts, though not at the level that alternative sectors might o er in today’s economy. The proposition shi s when farmers have to acquire the land. But if the land is already in the family, or can be economically leased, many believe that beef cattle can become a solid business.
Farm by farm, landscape by landscape
While tax policies for easements and land-use are stable, those businesses strategies, the third leg of the stool, are constantly in ux, and likely to remain so. And other than repeatedly, and calmly, asking, “What now?,” there’s no single template for success.
The following trio of snapshots o er three currently successful approaches. They are wildly divergent, suggesting that Rappahannock’s future will be more of a quilt than a monochrome blanket. But for all their di erences, the three management approaches have these elements in common:
• All three take advantage of Rappahannock’s proximity to the large customer base in the Washington metropolitan area.
• All three engage the fresh thinking and continuity brought by younger generations.
• All three focus on the future more than the past, listening closely to today’s customers.
ree farms, three stories:
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