Farming Magazine - January, 2013


Opinion: Trifecta: Control, Money and Land Use in the Near Future

An agricultural forum for the progressive farmers of the Northeast.
By Martin Harris Jr.

Even though the "urban farming" phenomenon is (forgive the pun) gaining ground, most agriculture is still done in BUB (beyond the urban boundary) country, in counties that are suburban, exurban or rural. Yes, there's vacant lot "community agriculture" in places like Detroit, apartment balcony arugula culture in places like New York City, and newly legalized poultry-keeping in places like Johnson City, Tenn., but both the large-scale commercial farming and the smaller-scale mini farming that feed both the 99 percent and the 1 percent (a little new economics jargon there) aren't happening at significant levels in the central cities. They're happening out in farm country: the still-rural counties and the exurban and suburban counties that are now counted by the Census Bureau as parts of a central city metropolitan area because of economic connection indicators such as job commuting patterns.

There's a lot of wealth out there in BUB country; not only the large-scale commercial farms, which usually furnish commodities to the beyond-the-farmgate food system at less-than-cost-of-production prices and whose owner-households make up the difference with off-farm jobs, but also in the more suburban and exurban counties, where commerce and manufacturing, professions and trades are increasingly located. Central-city advocates are now claiming that the household net worth and income disparities, the taxable wealth per capita, and so on - BUB residents higher, central-city residents lower - simply aren't fair. Their new slogan is "regional equity" (RE), and their objective is wealth redistribution from the so-called haves (BUB residents) to the have-nots (central-city residents), who are statistically less wealthy and also the political client base whose votes the RE advocates seek to earn.

Regional equity, as a subject of political calculus, can't easily be

accomplished by votes alone; with more than half the U.S. population in BUB locations, central cities can't easily majority-vote BUB wealth redistribution into reality. Restoring to the central cities their early 19th-century legal powers to annex outlying areas at will, irrespective of residents' wishes, is the only practical route.

There is also a new awareness of how much wealth is out there beyond the urban growth boundary (a little Oregon smart growth lingo there; visit to learn more about smart growth), which has been revealed by new studies of an old phenomenon: rural gentrification (RG), the label for the tendency of successful urbanites to acquire a bit more personal living space in more salubrious surroundings out beyond the apartments, the congestion and the various pollutions of the central city. Measured by the Census Bureau in terms of household passive income growth by county, new maps show that RG counties can be found all across the U.S.; they're part of the reason why RE advocates, looking for wealth to redistribute, are pursuing new (actually, quite old and near-forgotten) annexation powers for cities. At the end of the (commuter) line, it is, indeed, all about the money.

The third element of the trifecta, land use, has already become part of the regional equity campaign (see Portland, Ore., for the leading example) through the use of smart growth regulations to discourage BUB residency and encourage inside-the-urban-boundary growth by requiring higher land use densities and offering such supposed amenities as below-cost light rail commuting, TIF (tax increment financing) subsidy for new urban commercial and manufacturing enterprise, enhanced spending for such supposed attractions as pedestrian malls (think Church Street, Burlington, Vt., for an example), specialty shopping and even magnet schools, all aimed at raising inner-city attractiveness to prevent further middle-class flight and to encourage BUB resident return.

As the Portland example has shown, such growth-containment initiatives do raise inside-the-boundary property values and costs for housing and business, but don't raise city revenues, which explains why the search for more money is always a part of the regional equity campaign. Should RE succeed, the various impacts on BUB residents - for example, the several ag-oriented sectors that make up the Farming readership - will be substantial: not only the redirection of existing taxes into new, more center-city-oriented distribution patterns, but the imposition of new sets of fees and charges to make BUB residency more expensive and thereby less attractive, as author Stanley Kurtz describes in detail in his new book on the regional equity subject, aptly titled "Spreading the Wealth." And new rules for land use - not mentioned in the Kurtz book, but previously described in this space - are the several statewide planning and zoning controls adopted by Oregon to suppress BUB residency and to control BUB land use by creating minimum lot sizes (80 acres for farming and 20 acres for housing) for any site beyond the urban growth boundary (UGB).

The intent to suppress BUB population (and voting) levels while increasing inside-the-UGB numbers is obvious. Application of the Oregon model, even if the minimum requirements are diluted somewhat, to such BUB counties as cover the rest of the country would have remarkable effects on governance patterns (citizen/voter local control), money (how high the taxes and fees are and where they go for spending) and land use (can you even live on the land you farm, mini or otherwise?), as is well illustrated, on a small scale, by Vermont's 14 counties. Three - Chittenden, Franklin and Grand Isle - are already recorded by the Census Bureau as part of the Burlington Metropolitan Statistical Area and are therefore legally more susceptible to annexation. Six more counties are in the core-based statistical areas around Barre and Bennington, Vt., and Berlin and Lebanon, N.H. - susceptible, but perhaps less so. Only the remaining five are truly rural, not that their rural gentrification qualities wouldn't make them targets for regional equity.

Supporting the potential trifecta of control, money and land use, there may be two additional categories as well: one is the new political campaign directed at the eventual federalization of state debt, starting with the present proposals for Washington to guarantee first state and soon municipal obligations such as governance debt and employee obligations; and the other is the scope of the enormous intergenerational wealth transfer, which has been quietly under way for a couple of decades, as the "greatest generation" bequeaths its savings and wealth to its children, and now as the "boomer generation" goes into retirement and estate planning.

Estimates of the sheer size of the intergenerational treasure vary. The Boston College Center on Wealth and Philanthropy pegged it in 2003 at $41 trillion over the next four decades, while consulting firm Planned Giving Design Center calls the $41 trillion a "low-growth" number, in 1998 dollars, not counting bequests prior to '98. The number reflects a massive wealth transfer, largely to middle, upper-middle and upper-class beneficiaries who are largely resident in precisely the BUB locations for which regional equity advocates want the control and the taxing rights. It would happen as cities incorporate their former suburbs and exurbs and as states' and cities' obligations are subsumed by the federal treasury.

Or not: Regional equity, intensified wealth redistribution and federalization (equalization) of state and local debt are all subjects of political speculation. Oregon's rigorous pro-urbanization land use rules are Oregon's alone. Only the intergenerational wealth transfer is a nationwide reality. It shows up in the well-known and measured "flight to the suburbs," now a century or more in longevity and resulting for nonfarmers in such assets as the post-World War II Levittown cape, tiny by modern standards, and the occasional contemporary McMansion; and for farmers in higher net worth, if not higher farming incomes. The acerbic old New England one-liner about farmers living poor but dying rich illustrates this. A newer one would recognize that the on-farm standard of living has largely caught up with nonfarm patterns, but the fact remains that farming, whether commercial or mini, is based far more on net worth and far less on profitable income than nonfarm business.

Even as your humble scribe prepared to draft this column, Hoard's Dairyman was reporting (September 10) in the Milk Check Outlook column: "Margins to Remain Negative Through December." That's such a common accounting fact of life in commercial agriculture that it explains the 90 percent or so of farm household income that is earned off-farm to support the enterprise and thereby to subsidize the cost of food for the urbanites who now want, via regional equity, to share the wealth of BUB residents even more than they already do.

The same net worth foundation underlies the new and rapidly growing mini farm ag sector, but stats and data are harder to get. We know that item pricing substantially exceeds supermarket pricing. We also know, statistically, that off-farm income is at the highest percentages for the smallest farms; and we think we know, anecdotally, that most mini farms are part-time operations, some by practitioners in the "trust-fund" wealth category. The overall picture is unclear so far, but it seems that the role of intergenerational wealth transfer in the net worth situation that underlies much of the economics of mini farming is a critically important element. It may - we don't yet, statistically, know - underlie the rural gentrification phenomenon (as census-defined by passive income), which in turn underlies some fraction of the mini farm phenomenon itself. Maybe it's just an outcome of very long-term prosperity and wealth accumulation in the U.S. economy that eventually current income matters less than net worth.

The author is an architect and former farmer.