Agenda - 06-28-1994-IX-B - Laserfiche WebLink

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t 8 insufficient area for septic fields may permit only 50 units or one dwelling unit per two acres. The objectives of farmland preservation may be served by purchasing and removing the development rights from the bundle of rights which comprise full-fee ownership of farm property. This is equivalent acquiring an easement on the property and is also referred to as the acquisition of a development or conservation easement. Known as a "negative" easement, it simply prevents the owner from doing something with his/her land; e.g., developing it. Each easement can be tailored to the parcel to which it applies, specifying what type of development will and will not be allowed. Development rights apply to each specific parcel of property. Therefore, their removal must be accomplished parcel-by-parcel and recorded with each deed. The resulting lien on the property typically "runs with the land." It is binding on subsequent purchasers and can be enforced against them by the agency or organization which holds the development rights. 3. How is the value of development rights determined? One of the most difficult aspects of a PDR program is determining the value of development rights. Generally,the cost of a development rights purchase for farmland preservation purposes is usually figured on a per acre basis as follows: Market Value -Agricultural Value = Development Rights Value Market value is determined by an appraisal and is usually based on recent sales of comparable land. It represents the amount for which the property with all rights intact would be sold. Agricultural value is also based on an appraisal and based on the current and prospective net returns from agricultural production. It represents the amount for which the property would be sold based on its income potential. Shown graphically, the value relationship would be as shown on the following page. Land values vary widely from one part of the country to another and even within a single county. This feature makes it difficult, if not unwise, to draw conclusions about the cost of development rights in other PDR programs.Nationally,however,the cost of purchasing development rights has averaged$1,500 per acre. In Montgomery County, Maryland, a jurisdiction noted for its farmland preservation programs (including PDR), $1,500 to$4,000 per acre has been paid for development rights. The average of$3,200 per acre is competitive with appraised PDR values elsewhere in Maryland. Forsyth County, North Carolina has had a PDR program in effect since 1987. The average price of development rights in that county has been$1,500 per acre.However,the former administrator of the Forsyth County program indicated that recent appraisals show an increase in the average price to$2,500 per acre. He predicted that similar values would be found in the Research Triangle area. Using tax appraisal data on land in Orange County,it is possible to make some assumptions about the value of development rights.However,this information should be viewed as a generalization and should not be presumed to apply to any specific property. The per-acre value of agricultural land may be estimated using values assessed to property under the Preferential Assessment/Deferred Taxation Program. Authorized by G.S. 105-277.2, the program permits land to be assessed based on its actual use for farm or forest purposes. Values are based on 10-year production averages for corn and soybeans under a sound management program for each of five major soil groups. Applied to parcels based on the types of soils present, the values are similar to those derived by actual appraisals.