On Mon, 11 Sep 2000, Michael Lorrey wrote:
>
> Artifically induced market conditions, you ought to say, since at least 1/3 of
> the US is under the ownership of the federal and state governments, where no
> development is allowed.
Of course, federal ownership is not evenly distributed. In most western
states, 75+% of the land is owned by the feds. In Nevada, where I have
most of my real estate interests, 87% of the state is controlled by the
federal government. At this level of federal ownership, most real estate
becomes effectively undevelopable. Dense urbanization is inevitable if
for no other reason than it is being forced on the populace by the
destruction of the economic network that is created by adjoining real
estate parcels in less developed regions.
A lot of people don't even consider the damage caused by Federal land
purchases in terms of network effects with respect to parcel boundaries,
yet if you look at maps of federal land acquisitions, it appears that the
feds are well aware of what they are doing, leveraging small purchases to
control vast regions. In most western states, the Federal government does
not acquire large contiguous blocks of land. Instead they purchase dozens
or hundreds of small parcels (small means anywhere from a couple acres to
a few hundred) in a random shotgun pattern across a region. What
eventually happens is that in states that have a high percentage of
federal land ownership, almost every parcel not already in a town or city
has federal land on at least 3 sides and typically all 4 sides. In many
places in Idaho and Nevada for example, privately owned parcels are
separated by a mile or more of federal land on all sides. You can't
give these parcels away, it devalues the land so much to be
surrounded by federal land. Having federal land on even one boundary can
be a problem, as they can effectively impose an arbitrary number of
restrictions on land use that is even proximal to federally controlled
land.
Since the federal government never gives up land, it becomes effectively
impossible to develop regions, as the federal government strictly limits
use and access of federal land in these areas and the individual parcels
are not big enough to be developable in their own right. The net effect
is that the scattered privately owned parcels become nearly useless, as
even getting federal permission to put in a dirt road to individual parcels
is a herculean undertaking on its own and can be flat out denied a fair
percentage of the time. Also, in order to expand the borders of towns
(which are usually surrounded by federal land in places like Nevada), the
feds will only give surrounding parcels to the state in exchange for much
larger parcels elsewhere. In states that are growing very rapidly in
population, such as Nevada (5% annually), you see the federal government
acquiring an even larger percentage of the state by forcing uneven trades
so that the economy of the state can expand. Eventually, almost all
privately owned land in the western states will be isolated to existing
metropolitan areas. Many smaller towns, on the other hand, are
evaporating and will continue to do so.
The long-term ramifications are unclear, other than the apparently forced
urbanization of most of the western states, and the country at large. The
biggest potential impact on the country is the increasing restrictions on
mining near (which is effectively everywhere) or on federally controlled
land in the Great Basin region. Almost half of U.S. mining and mineral
extraction (mostly heavy metals and industrial minerals) occurs in this
region, and accounts for 6% of the world's metal production. Also, some
of the heavy metals produced almost exclusively in this region, such as
gold, are among the only export metals the U.S. produces; most domestic
metal consumption is augmented by imports to meet demand.
I wandered a bit, but my point is that current government land
acquisitions will eventually force virtually the entire population into
densely packed metropolitan areas, with its attendant issues and problems.
And with the current trend in "environmentally friendly"
regulation of these lands, the U.S. may become even more dependent on
resource imports than it already is, as domestic resources go
underutilized. Actually, the first resource that will create a stink will
probably be water. Most urban areas import their water; on the west coast
of the U.S., almost all of it comes from aquifers and resevoirs in the
rural western regions. If some organizations get their way (and it
appears that they may), the importation of water into places like
California may be strongly curtailed.
-James Rogers
jamesr@best.com
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