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Why Can’t the US Use Its Assets Like the UK?
If you’re like many Ricochet folks, you get “The Daily Shot” in your inbox every day. (No, I’m not going to scold you if you don’t.)
Wednesday morning’s edition caught my eye because of some talk about Queen Elizabeth II getting a pay raise. As Americans, we’ve occasionally made comparisons between the Royal Family’s expenditures versus our own First Family. This was a relative sport for some, until earlier this year.
In both the US and the UK, the citizens bear the bill for their respective “families,” but across the pond, that isn’t as direct as it is here. The esteemed writer and editor of the daily newsletter did a fine job of explaining that:
Then there’s also something called the Crown Estate. That’s a corporation sole (basically a one-person corporation) belonging to whomever is on the throne. It owns a lot of stuff: property holdings, including in central London, two million acres of land, various traditional holdings and rights, a park, a racecourse, as well as gold and silver mines.
All that is worth $15.8 billion, but it doesn’t belong to her personal estate, nor does she control how it’s managed, and she can’t sell it off. It’s the sovereign’s public estate. Revenue from those holdings go right into the UK treasury for the benefit of the nation. That’s where the cash we’re talking about comes from. Since 2011, the Queen gets the Sovereign Grant based on the profits of the Crown Estate.
So, in short: No, Queen Elizabeth is not a billionaire. But, yes, she is a shapeshifting space lizard.
Now, I can’t speak on the lizard part, but what definitely caught my attention was the concept of having an estate that earns the cost of upkeep for the Royal Family. Obviously, the citizens of the UK don’t have much of a problem with seeing their royals live in the lap of luxury at least in part because they really aren’t paying for it directly through taxation.
Here in the US, we’ve had issues with the concept of government lands, even to the point of armed standoffs. We also have a horrible habit of allowing government to claim land with the specific purpose of doing absolutely nothing with it at all. Southeast of where I am in western Pennsylvania, the state of Maryland has turned this into a regular practice, funded by a tax on the transfer of real estate.
Yes, Maryland residents pay a tax on property transfers that gives their state government funding to buy property so no one else can have it. Apparently this includes “saving” acreage from being developed, presumably because someone in government doesn’t want anyone living near them. That brings “not in my backyard” to a level that even the master George Carlin himself probably couldn’t foresee.
This scheme is called Program Open Space, and some of the details they offer in their overview are absolutely priceless! I suppose they would have to be, in order to convince the citizens that government is the best entity to have control over hundreds of thousands of acres in their very small state.
As the site explains:
Program Open Space has…
- Protected 380,000* acres of land
- Awarded more than 5,800 grants to local governments through Program Open Space Local
- Enhanced quality of communities
- Established Greenways and Green Infrastructure network
- Provided state and local park or public open space areas within 15 minutes of most residents
*Acreage includes Program Open Space Stateside, Program Open Space Local, and Conservation Reserve Enhancement Program permanent easements as of September 1, 2015. Updated acreage by program is available at Maryland’s Conservation Lands Reporting Site.
In case you’re wondering, no they don’t link directly to that mystical “Conservation Lands Reporting Site” on this overview. Who can blame them? Someone might actually click on it, and figure out that “Conservation Reserve Enhancement Program permanent easements” really often means “lands that your state holds and forbids anyone from even setting foot on, ever.” As a yearly traveler to the beach in Maryland, I already noticed that there were wide swathes of lands that never seemed to change — no new development. I wondered about it, and recently found out the reason why what many would consider prime real estate for even limited residential and commercial development was untouched for years. Those lands are part of the state’s reserves.
Maryland was actually rather brilliant in their sale of this idea to their residents:
What are the economic benefits of open space
- Program Open Space is good for business and for the overall quality of life in Maryland and its attractive residential communities.
- Home values tend to increase faster around parks and protected open space than comparable homes in other settings.
- New businesses prefer to locate in communities with parks and quality environments.
- Tourism is one of Maryland’s top industries. Historical structures, landscapes, parks and forests supported by Program Open Space are essential to the continued growth of this sector of Maryland’s economy.
- The Joint Economic Committee of the U.S. Congress reported that a city’s quality of life is “more important than purely business-related factors” when it comes to attracting new businesses.
- Businesses which move to an area because of tax incentives tend to leave as soon as the incentives expire. Businesses drawn to an area because of its quality of life remain long term residents and taxpayers.
Sounds great, doesn’t it? Remember, Maryland is not a big state, has limited land to begin with, so if the state is buying up real estate all the time to prevent people from developing it, there eventually won’t be anywhere for new businesses to move in anyway.
Now, if instead of just sitting on all of that property, and Maryland took a page from the UK, the residents of that state might actually benefit from the state (temporarily) claiming all that land. Sure, the government would reserve some of the ridiculous amount of acreage it already owns, but why not sell some at a profit? It’s logical, so no one is really expecting Maryland to do that.
And Maryland is just an example of the federal government in miniature. Of course, the President has already talked about reviewing the property holdings of the government, and it’s safe to assume that there will be some “for sale” signs going up on current federal properties in the relatively near future. Since real estate is Trump’s wheelhouse, we can hope that will end well for all concerned, at least when it comes to making sure lands aren’t undervalued in the process. But, maybe we need to think about making our real assets as a nation work for us, like the royals do in the UK.
Making the most of real estate value is something the British have definitely figured out, since they’ve been doing it for centuries. Maybe it’s time to import that skill to America. Just something to think about, since it’s very unlikely that we will get the government out of the business of owning a lot of real estate right away, even if that does remain the goal.
Published in Domestic Policy
It’s even weirder than that explaination. The state really only has rights to the income from the land and the land is held in trust for the royal family. Should parliament ever dissolve the relationship the royal family would be entitled to all that land back:
The Queen (Crown Estate) doesn’t sell the land. The Crown Estate sells leases on the land for a fixed period of time. When the time is up, a new lease is sold and a new revenue stream occurs. Sustainable income stream.
You can see their holdings here: https://www.thecrownestate.co.uk/estates-map/map?lat=55.75&long=-4.0&zoom=6
Your idea of selling the land would result in a one-time revenue stream.
You stated:
“As a yearly traveler to the beach in Maryland, I already noticed that there were wide swathes of lands that never seemed to change — no new development. I wondered about it, and recently found out the reason why what many would consider prime real estate for even limited residential and commercial development was untouched for years. Those lands are part of the state’s reserves.”
If you maintain that these pristine tracts of land should be sold for commercial development then I must strongly disagree. Not a “treehugger” here but how refreshing it is to walk along unspoiled beaches that look like they must have looked hundreds of years ago. These tracts provide sanctuaries for wildlife and migrating waterfowl. The states along the Gulf Coast have these beach preserves saved for posterity and I would strongly oppose the sale of one acre for commercial development. State money spent on maintaining these preserves is money well spent regardless of the one time big bucks that could be made. I hope you don’t disagree.
Yes, and no. As long as the lands are sitting unused and owned by the state, they are netting zero revenue for the state. If the property is sold and developed, there will be revenue, from taxation. Even if there is no property tax, there is revenue from income, sales, and business taxes, from the companies and individuals who take up use of the land.
I did say “limited”. The lands in question are mostly former farm lands on the peninsula, not sea or bay side. The region is generally dotted with small sections of residential development with some commercial properties nearby. It is similar to what we have here in south central Pennsylvania, outside of our capital complex – former farms with small housing developments and a small shopping center with a grocery store, some small businesses, and a gas station nearby. I guess you could call it a modern form of a country village, sitting in the middle of farms or open land.
I agree with you about the preservation, but Maryland is going way beyond that, and it is being sold to the citizens as something good, when it really isn’t. It’s also not all driven by the desire to preserve wildlife, of course. I’ve been told that some of the land purchases were made to prevent construction of another bridge to cross the bay, something that the state really does need.
OTOH – keeping those lands “unproductive” means that Maryland is depriving itself of additional tax revenue. Considering that (1) the Democrat legislators in Maryland would not generously cut taxes in response to additional tax revenues that would be generated by the sale of the “preserved” property, and (2) the Democrat legislators in Maryland would undoubtedly use the additional tax revenue generated from the sale and development of the “preserved” property to line their own beds and to further expand oppressive state government – to the detriment of the citizens, it’s probably a good thing that the land is held, but not developed. Just wait, when Maryland decides it has taxed its citizens all that it can get away with, the state legislators will start casting their greedy eyes toward the preserved property; then we’ll see how quickly their selflessness turns to selfishness and how quickly the property will be liquidated.
The government should not own land other than that used for conducting government business.
I mostly agree, however I am also for government ownership of certain land of historic importance. Again, I am from Pennsylvania, and given the current social climate, if Gettysburg Battlefield – which is essentially acres of land with stone markers of where soldiers died in battle – was not a national park, I have no doubt it would be destroyed. That would be a tragic loss of history that we definitely do need to remember, so it is not repeated.
I think this would be preserved by some billionaire who shares your sense of history.
I can see the ads now:
Jamie Lockett is for selling Old Faithful to his rich developer friends.
That is true. It is equally true of the land that is leased rather than sold.
While I’m all for our government making the most of assets as opposed to wasting them, I’m also all for getting government mostly out of the “owning real estate” business. The UK has been working from the concept of royalty leasing lands to the masses since feudal times. That is something that we shouldn’t import to the US. Making money, yes. Playing “lords of the manor” over citizens? No.
Delmarva is ripe for development. In my humble opinion, there is no reason to not ease some of the restrictions and let the towns and counties make some of their own decisions in regards to land use. No one is talking about touch Assateague, that fight was fought and decided well in the past. However, the inland and the bay side there could room for middle ground.
Given the Kelo decision, couldn’t we take it back and resell it as many times as we want?
I disagree most strenuously. I do not think people are a blight – we improve nature. Given the choice, people beautify that which they own – and they despoil the commons.
The government is a terrible landlord, even of fallow land. The US Forest Service is but one example of how poorly the government “protects” land.
After Mt. St Helens exploded, the government, which owned some of it, “preserved” it. Weyerhaeuser went and cultivated it. The result was stunning: Weyerhaeuser grew a gorgeous forest, home to countless wildlife. The “government-preserved” volcano continued to look like a sterile moonscape for years and years.
Exactly. I know, this is a “mom” thing, but I’m not sure if we’d vacation on the MD shore yearly if my kids were still in grade school. Even the main road to Ocean City doesn’t have enough stops if you’re traveling with little ones who insist on drinking gallons of stuff. Hehehe!
I’d agree, but there’s a lot of evidence to the contrary in Gettysburg now. Anything that isn’t government owned is preparing for trouble this weekend, since the town will be invaded by protesters determined to raise hell and vandalize. Sure, a billionaire theoretically could take over the national park lands, and “might” manage to keep everything in fine order while leaving it all open to the public. But, the billionaire wouldn’t have the ability to invoke federal laws and penalties against vandals. The vandals heading to Gettysburg this weekend are avoiding the park lands, because they don’t want the trouble of federal penalties.
Some data:
The forest to the left was Weyerhauser-owned. The dead trees to the right are “unspoiled by man.”
Government sucks.
Post a bounty….
Just sayin’
Yes, it does, especially when it comes to protecting nature. It’s somewhat passable when it comes to preserving man-made things, like monuments, but half of that really is about preventing intentional damage with the threat of hefty penalties that lower level governments can’t use, and private citizens or corporations certainly can’t.
There are also going to be groups who are descendants of the “evil” Confederacy there this weekend. This can’t end well. Yes, I did ask my husband if he was up for a road trip there, so I “might” be writing about what happens there next week. That’s assuming my husband doesn’t get too worried about our family going in the middle of what could become a battlefield – again.
Exactly. It was beautiful.
Except when it rained, and caused more mud slides of volcanic ash sludge.
Except? Can’t God play in the mud, too?
If you think you don’t like the Forest Service, Park Service or BLM, wait until a bunch of the highest bidders own those places. Many would probably be Chinese fronts and Disney would buy some of them. These government organizations do a pretty good job of making our outdoors available to us and I want my great grandchildren ( I already have one) to be able to enjoy them like I still do with utter delight. If they were privatized that would no longer be the case. It ain’t broke lets not fix it. The private sector produces better outcomes for one reason, it faces relentless competition so better outcomes emerge as if planned, but it isn’t planned, and as soon as competition is removed it behaves exactly like the government often worse. If we sold them off we’d be creating monopolies. There is only one Yellowstone park, or my favorite Grand Teton and the Snake River that runs through it and the Buffalo, Pacific and Gros, Ventre rivers enter it from a National Forests which are far less crowded because they don’t have the budget to keep their roads first rate, so much the better. So we could have competition in food courts? God help us.
I think I would trust Disney at least as much as the federal government. A lot of people say that the National Park Service is more interested in acquiring new land for parks than in maintaining the parks they already have.
This isn’t about getting rid of “all” the lands Maryland is reserving. They are doing it far too much, which is a problem. The land department in question is probably the richest agency in the entire government there, and it is set up so that it really can’t share its wealth efficiently with the rest of the agencies. While your points about questionable investors buying up property are valid, we mustn’t forget that government also determines how and when currently undeveloped properties can be used. Those “bad” investors you mention could be kept out of the equation by keeping the options for development highly limited in the first place. That was something that was suggested in the first place – limited residential and small commercial property usage, essentially creating “more of the same” small communities in the regions in question without taking over or significantly disturbing wetlands. Let’s be brutally honest here on that one. We have a department store that built adjacent to a small patch of wetlands in my own area. That decision has proved to be a headache for the company, because part of its parking lot is repeatedly being “reclaimed” by the wetlands, since every few years, it collapses. And the store has to pay to repair it. It’s not worth the headache for many developers, since they usually can’t do what they did many years ago anymore. No more back-filling wetlands beyond the boundaries of your property to prevent that kind of thing.
Of course, they’re a Federal bureaucracy and like private business they want to grow but get to dip into our pockets to do so. Frankly they over maintain their parks, they’re ninnies about everything. Still parks and unique wilderness national forests would be private sector monopolies even if owned by Disney. I would never trust either party to put these things on the block. The reason we don’t like the Federal government is because the corruption runs deep and they are driven by short term personal gains. Disneyland is not a monopoly, they must compete with all other amusement parks which can be built wherever. Much of Grand Teton was donated by Lawrence Rockefeller, they got the concessions in return and there is a huge chunk around leigh lake that is a private Rockefeller summer home. There are lots of things I’d change, but it would be extraordinarily risky to try to reap the one time cash infusion. It would vanish and we’d be left without public access to most of these lands.
As it is, many of the “protected lands” already are restricted from public access, so this agency is claiming that it is buying up land for the “public good” but is really just posting piles of “no trespassing” signs instead of making parks.
Yes. It’s rotten and has to be policed. Environmental extremists have too much power and have passed a lot of laws that make it worse. Still we have to be very careful because it is corrupt and extremists care more about the issues than normal people. One piece at a time, but not to raise money rather to correct insane laws, corrupt practices and abuses of power. We could go a long way if we were to make environmental decisions that destroy value government “takings” that must be compensated at the full market value that would exist without the environmental law’s overhang.