Anyone who owns a piece of land zoned for housing is faced with the choice of what to do with it: whether to keep it, sell it to developers for a profit, or give the development rights to a land preservation group to keep the land free of houses. To many people, it’s a choice between personal gain and the betterment of the community.
Not so fast, says Wade Martin, a volunteer for the D&R Greenway Land Trust. There may be more profit in giving the land away than most people realize. “Most landowners, accountants, attorneys, and financial advisors don’t understand that land preservation has a great financial benefit,” Martin says. A financial planner at Morgan Stanley by day (though the job is unrelated to his land preservation efforts), Martin is familiar with the surprising monetary rewards that go to landowners who opt to give their development rights away for free.
Martin will speak on the future of preservation funding at PlanSmart NJ, a land use planning group, on Friday, October 10, from 8 to 10:30 a.m. at the D&R Greenway Land Trust, One Preservation Place, Princeton. Visit www.plansmartnj.org. Tickets are $45 for members, $65 for nonmembers. Tom Gilbert of Keep it Green will describe the statewide referendum on open space funding and what it means for the future of open space. Other speakers include Michael Frank of the Open Space Conservancy, Ed Wengryn of the Farm Bureau, and Damon Rich of the City of Newark Planning Office.
In some land preservation deals, groups like the D&R Greenway buy the land outright, such as was the case in 2010, when the group, using $11 million raised from the state farmland preservation program and the Hopewell Valley community, preserved the 340-acre St. Michael’s tract on the edge of Hopewell Borough. But more and more, Martin says, funds for that kind of purchase are drying up. Instead, he is trying to persuade landowners to donate the development rights.
“But,” Martin says, “landowners can get income tax advantages and still live on their land, which is a great thing.”
The income tax advantages can be substantial depending on the income of the landowner and the value of the land. IRS regulations allow landowners to deduct up to 30 percent of their gross income up to the value of the land that is donated, for five years. “If people just donated the development rights, and the value of those rights was a million dollars, they would be able to deduct a million dollars off their income tax for the next five years up to 30 percent of what they usually make,” he explained. “If they made $300,000 a year, they would be able to take a $90,000 deduction and still own their property.”
Anyone can do this as long as they own a piece of property on which houses could be built. As little as one acre in the center of town, zoned for six buildable lots, would qualify the same as a 1,000-acre ranch. Businesses and nonprofits can also donate land, and corporations can get similar tax benefits to individuals.
“It’s a really undiscovered avenue for people to explore that they may not know about,” Martin says.
Martin grew up in Belle Mead, where his mother was a nurse and his father worked in finance. He earned a degree in finance from Susquehanna University. His high school graduating class had 11 students — today that same high school has 450 students. Seeing the great change in the community prompted Martin to attend a meeting of the D&R Greenway group 20 years ago. “I just thought it was great for society as a whole,” he says. “I figured if land preservation could slow the growth, that would be a great thing.”
The D&R Greenway Land Trust has been preaching the gospel of preservation all over the state, and regularly holds classes at its Preservation Place center to educate people about the issue. The organization also trains preservationists from all over the country. As a finance expert, Martin offers free advice to landowners who are interested in preservation.
“People should look at all the avenues, and approach it in a holistic manner, and keep an open mind,” he says. “If they did, they would realize the benefits outweigh what negatives they might have preconceived. Land preservation is a great thing for everybody involved.”