A Model for Federal Public Land Surface Rights Management

Journal of Real Estate Research, The, Apr-Jun 2009 by Spahr, Ronald W, Sunderman, Mark A

Abstract

The U.S. Forest Service and the U.S. Bureau of Land Management (BLM) control large tracts of federal public lands. Management goals for these tracts are described as "multiple-use." Some of the lands are forested, mountainous, contain wildlife or possess other scenic and recreational attributes and warrant the multiple-use designation; however, a significant portion, especially that under BLM control, contains little scenic, recreation or wildlife value, thus offering little multiple-use potential and non-pecuniary value. Inherent in the management of all federal lands is a defacto fiduciary responsibility to prudently and efficiently manage these assets. We develop a framework that measures present values of both quantitative and qualitative economic benefits and costs of federal public lands to assist managers and policy makers in determining future management policy. By applying this framework, federal public land policymakers may be aided in fulfilling their fiduciary responsibilities.

The largest inventory of federal public lands in the United States is under the control of the U.S. Department of Agriculture, via the U.S. Forest Service (USFS), and the U.S. Department of Interior via the Bureau of Land Management (BLM).1 The largest proportion of these lands is found in the western United States, although public lands exist in almost every state. The primary objective for both USFS and BLM lands is multiple-use, where the definition of multiple-use is managing a land area to simultaneously provide more than one of the following resource objectives: fish and wildlife, wood products, recreation, aesthetics, grazing, watershed protection, and historic or scientific values.2 Given these multiple-use objectives, a de facto fiduciary responsibility to the public requires that these lands be prudently, efficiently, and effectively managed.3 The purpose of this paper is to develop a framework that measures the present values of both quantitative/pecuniary and qualitative/non-pecuniary economic benefits and costs of federal public lands to assist managers and policy makers in determining future management policy, and to assess the effectiveness and efficiency of surface rights management for both types of federal public land.4

The paper addresses two issues. First, we develop a management model that considers the present value of future multiple use attributes (both pecuniary and non-pecuniary) and future management costs of individual public land parcels in the decision to either continue to own and manage each parcel or sell the parcel to private ownership. Inherent in the non-pecuniary attributes are multiple-use attributes including scenic, recreational and hunting, as well as pecuniary attributes including grazing and foresting. Much of the public land that we are specifically targeting for inventorying is BLM land that is completely surrounded by private land and contains little scenic or recreational value. We recognize that there may be other alternatives mat would improve management efficiency and effectiveness. Specifically, the model may also assess the benefit/costs of other modifications of land use that may include changing management policy or selling the land to private ownership. For example, this may include turning control of some parcels over to the states in which the parcel is located.

We further use a hedonic model developed from private land sales in Wyoming to estimate the value of public lands controlled by both the USFS and the BLM. Because of the scope of this study and data availability, we limit our estimation of the value of federal lands to USFS and BLM lands in the State of Wyoming; however, we observe the entire operating budgets for both types of federal lands. Even though we limit our estimation of federal land values to those lands located in Wyoming, we are confident that much of our analysis also pertains to the value of public lands in other western states, and to a somewhat lesser extent nationally, since federal lands located in the western U.S. are very similar to public lands located in Wyoming. Because of lower population density and lower potential demand for lands in Wyoming, our valuation is a very conservative estimate of the value of federal lands nationally. Higher values for public lands will enforce our policy recommendations.

Although management goals for all lands controlled by these agencies are described as multiple-use, some of the lands possess very few of the attributes to provide significant multiple-use contributions. Some of me lands are forested, mountainous, contain wildlife or possess other scenic and recreational attributes and warrant the federal multiple-use designation (significant non-pecuniary attributes); however, a significant portion of the land, especially that under BLM control, contains little scenic, recreation or wildlife value, thus offering very little multiple-use potential. Much of the land not warranting multiple-use potential has never been titled to anyone except the federal government (never sold nor homesteaded). Since it is our finding mat management inefficiencies, operating deficits, and bureaucratic overstaffing for USFS and BLM lands have created a situation where government's fiduciary responsibility may have been abrogated, we suggest that all federal lands be inventoried with regard to multiple-use attributes and be assessed on a benefit-cost basis. Large operating deficits resulting from the management of USFS and BLM surface rights makes these lands an expensive liability rather than an asset. Thus we posit that these agencies be required to justify their continued defacto ownership of these lands.5