Observing Forest Property Tax Enrollment Preferences in Light of a Multiyear Restriction on Development

Abstract

The cost of an 8-year developmental deed restriction for nonindustrial private forest (NIPF) owners in Minnesota was estimated by examining the property tax records from 1,200 landowners (1,341 parcels) who enrolled in one of two property tax incentive programs that promote sustainable forest management. These programs were the Minnesota Sustainable Forest Incentive Act (SFIA) and the Minnesota 2c Managed Forest Lands (2c) program. The coexistence of these two programs provided a unique opportunity to analyze empirical data on NIPF resistance to a temporary loss of developmental rights. This study found that a majority of the landowners in our study were willing to forego substantial annual property tax savings ($422 on average) to avoid the deed restriction required by the SFIA program. A logistic model was developed to predict the probability of enrollment in the SFIA program over the 2c program. Developmental pressure, as measured by two proximate variables, and the level of annual financial savings offered by each program, were highly significant variables in predicting a landowner's enrollment decision.