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2005 Starker Lecture Transcripts

US Forest Ownership: Historic and Global Perspective

Lloyd C. Irland

The Irland Group and Yale University

Introduction

Who owns a piece of real estate has a profound effect on how it is used, who can use it, and how the benefits and costs of its uses are distributed. For this reason, resource economists and political scientists since time out of mind have paid attention to the institutions of property ownership and their effects. From the beginning, ownership has been a contentious issue in forestry, and statisticians have paid close attention to who owns the forest.

An attempt at a historic and global perspective on this issue can only be highly selective, but I think it is nonetheless interesting. I will first offer a highly thematic history, touching a few high points that stand out to me. I then summarize quickly the current situation, before painting a quick picture of recent trends affecting private forest ownership. At present, these are mere ripples on the larger tidal movements, but they seem likely to continue and in doing so to pose challenges for our larger society. Setting the US in a global context would call for a series of lectures by persons more learned than I. But I will close with some brief global comparisons and a few observations about the future.

Briefly, my story is this: US forests have seen a series of major changes in ownership over our history. We are now in the midst of one of them. The changes from natives to the monarchs, and thence to the United States, have left marks on our legal and social landscape. The old proprietors, land barons, and railroads have also left their marks, even though their holdings are much reduced today. Of particular interest today is the period from the 1920s to the late 1980s, the high water mark of ownership by forest industry. The slow retreat of industry ownership, while important, is less important than the massive re-arrangement of forest ownership now under way as our highly mobile society converts vast expanses of forest to a consumption good. Unlike the ownership patterns of the land barons, railroads or Blue Chip paper companies, the ownership changes currently under way are leading to fragmentation and dispersed development patterns that will not be readily reversed in the future. Regrettably, time does not permit considering the role of farmers and agriculture in this long story.

Considerable scientific and professional energy has gone into debating sustainability, how to define it, and whether we are practicing it. Precise conclusions remain elusive. Yet it seems difficult to practice sustainable forest management without sustaining the area of the forest land base itself. Right now, we aren’t.

Thematic History of Forest Ownership in US

In the Northwest, some of these steps never occurred, but a brief sketch will be useful to gain national view.

Natives

When the first explorer/conquerors first stood on North American shores, rights to land and resources were managed by the native inhabitants, on principles entirely alien to the newcomers. Forests covered an estimated billion acres or so out of 2.4 billion acres of land. This story should absorb a series of lectures but I will have to leave it here.

Monarchs

Acquiring a New World empire in the days of yore was simple: you hire an unemployed mariner, they bump into a continent somewhere. They plant your banners in the sand, the priest mutters a prayer, and it’s yours. If you had the biggest cannons you held on to it. If not, somebody else did (Williams, 1989; Meinig, vol. I).

Owning all that land gave the monarch some problems. They had to spend a lot on cannons. They wanted to control the gold, raw materials trade, and shipping, but they had no money. Keeping their empire required somebody who did. Which is where the grantees come in. The monarchs tried with varying degrees of success to use the land as trading stock to get private investors to settle the land, develop ports, and find rich mines whose royalties would flow into royal coffers. The Spanish found the mines; the British, French, and Dutch found fish, forests, and furs instead. The New World still lives with the consequences.

A quick windshield cruise level tabulation indicates the acres of forest that came to the new nation from the four monarchies of Britain, France, Spain, and Russia, over a period of less than a century. From colonial precedent, the new United State inherited a policy that the natives held rights to these lands that had to be formally extinguished by the sovereign. (Table 1)

Monarch’s Grantees

The hidalgos, the seigneurs, the unemployed titled younger sons, from families great and small, came to the New World to gain fame, fortune, and lands. Some came to gain religious freedom or to escape oppression or poverty. The grantees, or their customers, brought sugar, cotton, and other crops which built new economies and changed land uses. In fact, a principal market for forest products of the early colonies was the Sugar Islands. The Tidewater tobacco business emerged very early, creating family fortunes, some of which still exist, and dramatically changing the land.

Some of these aristocrats surprised everyone with their vision, ability and energy, and forged new communities and industries. Others never saw their domains. A few attempted to re-create feudal domains or seigneuries based on thoroughly medieval principles. They could not see that there would be no serfs in a New World of virtually free land. There would be no feudal dues paid where no royal power or machinery of local government existed. They sought workers willing to cross an ocean, often in a large open pinnace, indenture themselves for 7 years, and then labor, attached to the soil, with no hope of advancement in a feudal system like the one they had just left. To the surprise of these worthies, there were no volunteers.

Some of the land barons of this time did not even leave behind a placename on the map. Yet by their own methods of distributing land to settlers, they left a calling card on the American landscape (see, e.g. McManis, 1975; Price, 1995). On today’s air photos, you can see the field boundaries of the old arpent lands along Maine’s St. John and along the Mississippi (Fig. 1). Plats on New Mexico still reflect the Spanish grants; titles from the Russian period still exist in Alaska.

Our modern economy and society reflect the slow dismantling of many medieval institutions (North and Thomas, 1973), and converting medieval land rights into treating land as mere fungible monopoly money. The feudal period did get a few things right, however. Institutions to hold land holdings together included customs and laws governing primogeniture and entail. It was recognized that there was a longterm social interest in keeping estates from fragmenting ever smaller with each generation. Without doubt, the medieval era got the balance wrong from the standpoint of a modern society. Today we don’t have the balance right either. Many parts of the world suffer from lack of a modern property rights sytem (DeSoto, 2002). At the same time, our society has not found a new social compact to adjust the conversion of land to commodity to meet the realities of the future.

Also, in many European nations, public rights to walk over undeveloped private lands have their roots in feudal rights based on the fragmented plots that each farmer tilled. The medieval economy would have collapsed had every tiny plotholder posted No Trespassing signs. Today’s hikers, berrypickers, birdwatchers, bicyclists, and joggers remain in their debt. The only places in America, and these rights are tightly circumscribed, are in some states – notably Oregon -- where the public access rights persist on coastal beaches. It is a pity that some good European ideas never made it across the Atlantic.

Federal Government of a New Nation

A footnote in creating the United States was devoted to determining who would own the vast domains west of the Appalachians, which were subject to overlapping claims left behind by royal grants that spoke grandly of extending all the way to an ocean, thousands of miles westward, that neither the drafters, nor any white man, had ever seen. By this history we created multiple sets of public land systems, one dominated by states in the East, a system of rights originating in Spanish grants in the Southwest, and elsewhere in the West, a system based on grants of federal lands to states, territories, and private companies and individuals. The state land systems of western states were largely inherited from this system (Robbins, 1947; Gates, 1968; Hibbard, 1924).

Federal land policy from 1787 to 1862 reflected a bitter battle between sectional interests over one of the great social challenges of the day – distribution of the federal lands to private owners to create a republic of independent freeholders. The US was in acquistion mode for just over 60 years (Fig. 2). Following the last major acquisitions on this continent, the US transferred land to states and the private sector after 1850. The federal government, apart from railroad grants and grants to states, stayed in the land business, with generally dismal results. There were neither the resources nor the political will to carry out the intent of the land laws. Wily operators could, and did, gain wealth stealing federal timber and then get elected to Congress.

Railroads

One of the most famous photographs of the 19 th century – every school child has seen it – is the joining of the rails at Promontory Point. Federal land indirectly provided much of the currency that paid for this event, and other railways since, including the railways that finally connected Portland and the Willamette Valley to the East. The Congress granted directly to railroads about 94 million acres (Gates, 1968, p. 385) – about the entire land area of the state of California. The colorful history of larger than life personalities, graft, violence, and injustice to the Indians need not detain us here (Ambrose, 2000). But it is not an accident that two of today’s largest industrial forest landowners (Weyerhaeuser and Plum Creek Timber) have their roots in those land grants. And, in this immediate area, we need only look around to see the BLM lands that came from a failed land grant – the revested O&C lands. The original intent of these grants was that the railroads would re-sell the land, presumably increased in value by the very construction of the railroad itself. Over the years, they did re-sell, often to lumber magnates. By 1981, several major railroads still owned a total of about 3 million acres.

An enduring heritage of this period, which persists long after the tracks have been torn up, is the checkerboard pattern of private and public ownerships that stands out still on the maps of National Forests, BLM Resource lands, and private owners (Figs. 3, 4).

Land Barons

Governments were inept land retailers. Political leaders in the states finally figured that out and got out of the retail business. They then tried wholesaling instead. In most instances this also worked poorly. Roy Robbins pithily declares the efforts to sell land through large grants to big speculators “a failure” ( Robbins, 1942, p. 11). Most of the wholesalers were politically well-placed, even corrupt land barons looking for a quick buck. Most of them didn’t do well financially, as the market for vast expanses of land developed slowly. Their goals were for quick short term profits, and they lacked capital to make investments the State expected (good background is found in Gates, p. 68 ff, and his ch. VI; Meinig, vol. I, pp 348 ff; Hibbard, p. 9-11; and Hibbard.ch XII) . Many of their customers were unhappy (Taylor, 1990). There is no statistical summary, but the total granted directly by the previous sovereigns, proprietors, colonial governments, and the United States must amount to a total similar to the sum of the direct federal land grants to the railroads.

Current Land Ownership Patterns

For an Oregon audience, perhaps a quick regional tour of ownership patterns around the US may be of interest. This will give you an indication of how unusual the Douglas fir region is.

For the whole Northeast, the states now own twice as much land as the federal government. Virtually all of that state land was acquired since about 1890 (see, e.g., Irland, 1999a; Irland 1999b, ch. 9). Acquisition programs were especially large in Pennsylvania and New York.

In the Lake States, the collapse of private ownership in the Great Depression was nearly complete. The owners handed the deeds to millions of acres of stumpland and fire-scarred aspen back to the counties because there was no way to pay the taxes. (but the mortgages on the mansions in St. Paul were paid off). Counties and municipalities took millions of acres from tax forfeit lands. These lands, acquired from the 1920’s to the 1940’s, form the base of a locally managed public forest estate that is almost as large as the federal ownership in the region.

In the South, due to longtime hostility to public ownership, and a history of impoverished state governments, the States own only ¼ as much as the federal government. Federal holdings in the South reflect something of a historic accident, based on desperate economic and social conditions in the upland South during the Depression. As in the North Central, tax –forfeit lands went into public – but here only federal --ownership. The soils were literally washing away and few rural people had regular meals. Under such conditions, “Conservation” was a remote abstraction. Most rural southerners were only too ready to see off the idealists from away, preaching such notions, when conditions improved after about 1950.

In 2002, forest industry nationally owned a total of 66 million acres, down slightly from its all time peak. It is interesting to compare its role in comparison to the federal lands. In the 1990’s, in 7 northeastern states, industry owned far more than the federal government. In Maine and New York, industry ownership in 1997 was 10 times as large, in Pennsylvania, 5 times as large as federal (Irland, 1999b). This region was the culture hearth of the capital intensive paper industry which began accumulating land here in the late 1890’s, absorbing as it went many family and lumber properties. Federal ownership on a significant scale has little support in this region, though federal funding for state and local acquisition does (Dobbs and Ober, 1995).

In the north central states, by the late 1990’s, industry owned ½ as much as the federal government. This region was also an early center of paper industry investment, though the industry never accumulated the large holdings that it did in the Northeast.

In the Northwest, industry owned half as much timberland by 1997 as did the federal government. In South, by the late 1990’s, industry owned more than twice as much as the federal government.

Over the half century from 1953 to 2002, forest area, and total public and private ownership, barely changed. This is a net change, averaging across increases in area in some places, decreases in others. On these numbers, the states were active acquirers of lands, gaining more than did the forest industry. The NIPF owners sold, on net only a small area. Today the state, county and municipal governments own more land than the forest industry.

Post 1990: The Integrated Corporation Peaks as Landowner

Measured by acres to date, recent sales by industry are a mere ripple on the larger tidal movements.

From the turn of the century to the 1980’s the publicly traded blue chip paper company seemed a permanent feature of the landscape. The modern Blue Chip papermaking Corporation appeared in only a few countries. This enterprise owned mills, dominated national and regional markets. It conducted its own research on mill technology and paper technology, owned extensive timberlands, maintained a force of foresters and trained technical workers to manage those lands, invested in plantations, actually investing in timbergrowing and research. Outside of North America, such enterprises arose only in Scandinavia, Oceania, and S. Africa. Several are emerging now in Asia.

In North America, the Blue Chip model is unraveling. A few paragraphs here inevitably oversimplify a complex story. Stiffening international competition is driving margins down. Major markets are mature or even shrinking – US Newsprint consumption fell 8% from August 2004 to August 2005. A complex of forces has prevented construction of new world class mills, placing the paper side of the business in a grim downward spiral. The quickest thing an overextended company can do for its balance sheet is to sell land. They believe they can control fiber supplies through longterm contracts rather than ownership. They no longer fear being wood buyers.

Industry ownership topped 70 million acres in 1987 according to the USFS. By 2003, it had fallen below 50 million and was still heading downward. Industry ownership is fairly concentrated. In 1981 there had been 6 industry owners with more than 3 million acres. In 2004 there remained only 3. Between them, they held 21 million acres of land – so a very small number of people – the majority on three corporate boards – holds in their hands a commercial forest area larger than the National Forests of Oregon and Washington combined. From 2003 to 2004, the top ten industry owners sold 9 million acres, their remaining ownership falling to 31 million acres by year end 2004 (Table 3).

Industry profitability and expectations for future growth often enabled large forest products companies to take a long view, to invest in intensive management, and to make conservation donations for special tracts. They funded their own research as well as research by others. The stewardship record varied from company to company and time to time. I think that on the whole the period of their stewardship, say post 1960, was on balance a positive one for the forests under their care. I say this even though over the years I have found much to criticize, and my free advice was not always appreciated. Today, the industry’s financial advisers and critics are urging it to get out of owning land (see, e.g. Wilde, 2005; Neilson, 2003)

Maine presents an extreme example of how swiftly this apparently permanent feature of our geography could change. Over the 20 th century, industry mergers and acquisitions would change the corporate landscape. Up to the early 1990’s most of the land transactions were between industry buyers. A decade ago, industry still owned 8 million acres or more of the state’s remote wildlands. By late 2004, US based industrials owned nothing, and Canadian owned firms still held about 10% of the state.

A recent report by the Manomet Center for Conservation Science (Hagan, Irland, and Whitman, 2005) examines the Northern Forest, its forest land turnover, and the possible impact on biodiversity (the Northern Forest consists of the forested regions of northern New York, Vermont, New Hampshire, and Maine, see NFLC, 1994). From 1980 to spring 2005, we found that more than 19 million acres had been sold in this region . This only counts tracts larger than 100,000 acres. This is equivalent to the entire land area of Maine. Some of this land had been sold several times. The total in large parcels sold by US industry was 17 million acres, 87 % of all the acres; Canadian owned industry sold about 900,000 acres (Table 4) . Company to company trading was extensive, but industry bought only 52% of the land sold – where did the rest go? It was bought by large private investors, Canadian industry, and TIMO’s (Table 5). The public sector was rounding error.

We classified the large sales into categories:

Breakups	24.6%
Sale with mills	21.5
Takeover	14.7
Sale with fiber contract	14.9
Merger	15.0
Sell intact ownership	5.6
Other	3.9

So, when we say that 19 million acres were “sold” over this time period, the term conceals a great diversity of motives and effects (Table 6).

In little more than a decade, industry empires that took 50 years to assemble were sold, re-sold, and often divided yet again. The conditions that supported private ownership of extensive areas, which were available for habitat and for recreation, and also paid taxes, no longer existed.

Even among heirs of the old Bangor timber families, the social status associated with being a timberland owner has largely vanished. By the 80’s, heirs to the large private “kingdoms” of the Adirondacks and elsewhere were selling. Electronics and telecom tycoons are now investing again, creating a mix of new “kingdoms” and investment tracts. Their financial advisers are telling them timber is a good investment.

In the northern forest, the ownership turmoil of the 1980-spring 2005 period can be summarized as:

Longtime family owners – still there 8
Corporate, come and gone 14
Longtime owners – gone 11
New owners since 1980 still here one dozen plus

In the late 1970’s people close to the business were predicting a different result. They wondered how the old line families could survive. Nobody questioned the durability of the Fortune 500 publicly traded corporations.

On this evidence, then, and perhaps consistent with events in other regions, the privately held company and the family ownership, suitably structured, have demonstrated better longevity and resilience to stress than has the modern, blue chip, vertically integrated corporation. There is a story here of tradition, values, and culture within families, families whose leaders see forests as financial assets but not only as financial assets (See, for local exmaples, Fisher, 1991; Roseburg Forest Products, n.d.). A changing economy and unwise policies threaten to undermine the economic conditions that enable such ownership to continue, though some have survived a century and a half of ups and downs. The generosity of just such a family enables me to be here with you today.

What’s a TIMO?

Going back even to the 1970’s, there has been a trend to securitize more classes of assets, and to create intermediaries so that investors can invest indirectly in new asset classes. Each generation of MBA’s looks forward to creating new ones. Who in 1970 would have imagined trading futures on the S&P 500? More to the point, who in 1970 would have imagined that by year-end 2004, organizations called Timber Investment Management Organizations -- TIMO’s -- would be managing 13 million acres of forestland on behalf of investors? (see, e.g., Block and Sample, 2000; Binkley, Raper, and Washburn, 1996).

The TIMO’s were created as an analogy to the investment funds that own and manage shopping centers and garden apartment complexes for investors. The idea was to create organizations managing portfolios of commercial timberland in much the same way. TIMO’s got off to a slow start, because the newest asset class faces the most skepticism. It had not been done before. Increasing financial stress on the large industrial owners came along at just the right time for the TIMO’s. As tax-advantaged (usually) total return investors, they could outbid industrials for land. And the industrials were steadily shifting into net selling mode from net buying.

The TIMO’s found themselves able to attract ever more capital. At year-end 2004, the leading TIMO in acreage was Forest Capital partners (who bought the former Boise lands). This one TIMO held more land than the fourth ranking industrial owner (Temple-Inland) at that time. TIMO’s are now firmly institutionalized in the forest landscape. They look to be around a while. TIMO’s vary in management practices and outlook. While there is no firm rule, many plan to own the land for a period of 8-12 years, selling on a schedule determined by their investing sponsors. So, these lands have transitioned from owners who held for periods, at times, of decades, to owners whose plans are much shorter. In several regions, TIMO’s have been active in cooperating with conservation buyers and states in land sales and conservation easements for conservation purposes. Yet, a certain nervousness among observers is understandable in view of the high yield promises being made to investors, the short planned holding periods, and formulations of fiduciary responsibility that are exclusively financial in content.

Will the TIMO’s be just another actor in a long history of forest ownership, or will they be forced to become a new form of subdivider? It is too soon to tell. Market forces will dictate the answer.

Third Sector: Private Nonprofit Conservation Landowners

An striking trend of the past dozen or so years is the emergence of the nonprofits as owners of forest lands or interests in large, managed forest ownerships. There are thousands of local land trusts, scout camps, state Audubon Societies, hunting and fishing groups, and similar organizations owning small patches of land of local conservation significance. Today, nonprofits are owning forest tracts as large as the Nature Conservancy’s 175,000 acre tract along the St. John River in Maine. Much of that tract is being managed for wood production. Organizations like the Trust for Public Lands, the New England Forestry Foundation, and others are holding easements on large tracts, such as the Pingree easement of 750,000 acres. Not only are these nonprofits emerging as significant landholders, but they have developed sophisticated capabilities for financing, negotiating deals, and making things happen (See, e.g. Ginn, 2005). Such capabilities are literally an innovation on the US conservation scene of just the past 5 -10 years. I am aware of no current national acreage estimates.

An important conservation gain during this period took for the form of conservation easements. No comprehensive inventory exists, but we can say that across the Northern Forest, some 2.5 to 3 million acres are covered by large-scale easements that prevent future development. This region is now the place where more people know more about conservation easements than anyplace else. The trends is creating its own backlash, which cannot detain us here (Bick and Haney, 2001, Pidot, 2005, Morrow, 2005) So, though the amounts are small, the trend toward ownership by TIMO’s, by nonprofits, and in various mixed forms such as conservation easements are in the news today. But, compared to the current tidal wave of sprawl, they are modest indeed.

A Tidal Wave of Sprawl

When the land use and ownership history of this period is written, it will be seen that the ownership re-arrangements depicted above are less important than the grand tidal wave of sprawl now sweeping over the nation. Sprawl, formerly a concern at the edge of the Big Cities (Gottman, 1961), now penetrates far into the remote corners of the northern woods, of the mountains, and the dry woods and shrublands of the Southwest (see, locally, Kline and Alig, 2001, Alig et al. 2000). In each region it takes a different form (see boxes)

Long distance leisure travel has become swift and safe with the completion of Interstate highways into remote regions. Long distance commuting, based on four day workweeks and internet/fax communication, has become increasingly common. Suburbia now extends 3-4 hours out of town, not just 45 minutes as it did in the 50’s. Suburbia has become a disposable landscape, grid subdivisions, malls, and all. The pavement cracks, houses look less modern, and traffic becomes unbearable. This usually takes 15-20 years. Homebuyers then pick the easy solution – move out farther and build more. A fortunate few miss the traffic by telecommuting.

A recent US Forest Service report (Stein et al 2005, p. 7) predicts that by 2030 –only 25 years from now, 21.7 million acres of rural land will shift from rural or exurban to urban; an additional 22.5 million acres will shift from rural to exurban. Some land will shift from farming to forest over this period – but these will be parcels already highly fragmented. As Evan Richert (2004), notes, this land will shift from being a productive resource to a consumption good.

We are using land like spendthrifts. Urban land increased from 18 million acres in 1950 to 66 million in 1997, more than tripling, while population only rose by 77%. The ERS (n.d.) estimates that one million acres per year of rural land are being converted to “rural residential land”, totaling 73 million acres in 1997. Forty-four million of this was in ten acre and larger tracts. The concept of shadow conversion – that building on one acre compromises rural uses on 3 to 5 acres -- applies, I think, with extra force in the forest.

The surviving turn of the century “grand hotel” is now a Historic Registry property, visited by nostalgia seekers and hosting elite conferences where well-dressed people talk about conservation, financial planning, or company sales trends. But few go there for vacations. Instead, everyone wants to own a piece of the place they love to visit, whether to ski, to hunt, or just relax on the deck. In many areas, privately owned lakefronts have been subdivided and developed. Now that the available waterfront has been taken up, a newly emerging market exists for the “backland”, especially the mid and upper slope “view lots”. The spread of backland development is truly unprecedented, with the possible exception of limited areas near ski resorts (see Fig. 6). Our new, fast-growing “Wildland Urban Interface” (Radeloff, et al. 2005) is presenting society with a whole list of new issues and costs (Burchell and Downs, 2005, see Fig. 7 and box). Further, as land prices rise, the average size of ownership falls, compromising forest management, fire protection, wildlife habitat, and recreational values (Wear, et al. 1999; DeCoster, 2000; Irland and Field, 1980)

Low interest rates facilitate this trend toward owning your own piece of the wilds. Surely they are a factor in rising prices of remote forested land. Tax reforms have advantaged second homes (I own one too) but by driving up land prices they hurt those who own no first home.

 The grim truth for forestry today is that at the prices suburbanites are ready to pay for ten acres of back land, nobody can afford to grow wood on it anymore. Or allow people to ski across it, or walk to the creek to fish, or hunt.

To survive as a longterm owner of a large forest property today you have to be a part – time breakup artist. The only way to make forest ownership pay in many regions is to boost low current returns by occasionally slicing off the prime “Highest and Best Use” (HBU) lands for sale, or by selling development rights in one swoop as a conservation easement.

The tidal wave of exurban sprawl is reaching far into the wildlands in intensities never before seen. (See Table 9 for examples from the Northwest; also Wildland Urban interface box) Policies such as use value taxation or other aids to private forestry were never designed to cope with today’s land prices and real estate demands (see, e.g., Committee on Nonfederal forests,1998; Best and Wayburn, 2001; Ellefson, Cheng, and Moulton, 1995; Teeter, Cashore, and Zhang, 2003; Northern Forest Lands Council, 1994; Sampson and DeCoster, 1997) . They are a six inch levee facing a 20-foot storm surge. The implications go far beyond mere timber availability. They go to what kind of a rural society can survive, to what kind of access to wildland will exist in 50 years.

The ongoing privatization of formerly public resource values is of enormous importance. On the outer suburban fringe as well as in remote areas, “Spersopolis” (John Fraser Hart’s (1998) term), is spreading, isolating land from views and access, and fragmenting habitat. Ironically, privatization feeds on itself – when the no trespassing signs go up along your favorite trout stream, the first thing you want to do is buy yourself a piece of it. The real estate agents exploit this feedback effect – “Buy a piece on the Narraguagus before it’s all gone!” We are in effect privatizing access to public lands, as development in the valleys, and in inholdings blocks off the public lands from the public (Cordell, English and Randall, 1993). There has been an encouraging outburst of research interest in this phenomenon, but I do not believe current projections fully indicate the seriousness of the situation before us.

As recent research depicts the outlook (see, e.g. Wear and Greis, 2002; Wear and Newman, 2003, Stein et al. 2005, Radeloff et al. 2005, Radeloff, Hammer, and Stewart, 2005; Nowak, et al, 2005), it is difficult to place much credence in official projections suggesting that by 2050, we will lose, on net, only 3% of the nation’s 1997 timberland area to land use changes (See Table 10). We may assume that future Assessments will show a much less optimistic – and more realistic – outlook.

Comparing the Major Ownership Shifts – 20^th Century

Over the late 19^th and through the 20^th century, important shifts in ownership, and decisions about land ownership, occurred. We can now place these in some context in this timeline:

Reservations of national Forests	1891 (now 97 MM acres of timberland)
National Wildlife Refuges and Parks	1900 to present
Acquisitions for National Forests, Mostly in East	1911 to present, approx 55 MM A.
Closing of Public Domain	1935 (508 MM acres total land)
State and local acquisitions	From mid 1880s to present
Forest Industry acquisitions	1890s to early 1990’s peak about 70 million
TIMO’s	Since mid 1980s 13 MM A.
Nonprofits	Continuing 12 MM A
Rural residential, 1997	73 MM A all land
Projected conversions to 2030	44 MM A (not counting shadow conv.)

Global Comparisons

Several striking things about the US in comparison to the rest of the world deserve notice.

1. The US in the past has placed heavy reliance on the corporate form of ownership to own forests and provide wood based materials. This occurs only in a few other parts of the world, though as investment in plantations and mills in the tropical and subtropical world accelerates, this will begin to change. In these emerging regions, much of the capital is local and not multinational. And much of the land is fee owned (to the extent possible under local laws) and not on concessions on public lands.
2. Tragically, the record of management on government owned lands across wide swaths of the globe has been dismal. This is true whether the management objective has been wildlife or nature conservation (Paper Parks), timber supply for communities and the economy, watershed protection, or grazing.
3. The US maintains largely laissez faire policy concerning use, management, and conversion of NIPF/Family forests.
4. The nation’s Public Estate emerged largely by accident and not according to any plan. Its uses are now shifting to reserves and recreation, and green backdrops for wildland subdivisions and resorts.
5. Compared to other nations, the US has built a large and growing nonprofit “Third Sector” that is increasingly active in ownership and management of land.
6. Public rights of passage on private lands limited in all but a few local areas.
7. The US does not have a hereditary landowning class owning sufficient land to be material from a production or environmental standpoint.
8. Despite decades of controversy, the US clings to ineffective and often perverse policy concerning land use intensity and conversion to other uses. As I often say, by and large we have made efficient use of land illegal.

Market vs Planners – Torn between Extremes

The Free Market is indeed free. It is free of responsibility and accountability. Owners are free to ignore the future, free to act in ways that generate short term gains for themselves and push longterm costs onto other people, the environment, and the future. But, in my opinion, land flunks many of the tests that must be met for “free markets” to be socially optimal.

Now we may acknowledge this claim, and still feel some discomfort about the propensity of many to fix these problems with “planning” and grand schemes cooked up by people with little acquaintance with reality other than through maps, textbooks and GIS’s. James Scott’s 1998 “Seeing like a State” provides chilling cautionary tales. Property rights cannot not be treated as mere inconveniences to be tossed aside thoughtlessly. But we have to find ways to reach a new working consensus on what property rights really mean. In our polarized, increasingly dysfunctional political culture, this will not be easy.

We are at a point in our history where tragic waste of land is accelerating. Longterm environmental and public service costs are being frozen into place by obsolete public policies. We can’t blame the developers anymore for what we see happening out there. Development patterns and waste of rural land are being driven by unwise service extensions, rigid mandated minimum lot sizes, arbitrary bans on all forms of multiunit (read efficient) development, and a general failure to guide development wisely.

Communities rooted in the land are disappearing. In some respects this is inevitable. But we are artificially accelerating the process and often for weak reasons. In most cases the costs are falling on the innocent and the profits to the undeserving. In viewing this unpleasant future, I find myself torn between distrust for the “free market”, and distrust for central planning as a solution.

In Closing

By historical accident, demand for remote forest land was limited after the first round of lumber companies finished with it. The land was picked up later by a mix of paper companies, local investors, and public agencies. Today, the economic picture has changed. Land is in wide demand as a consumption good. Suburbanites build their homes with Canadian lumber and then want a distant leisure home on ten acres, a “ranchette” with a view of the Rockies. Little do they realize that in many instances this wild vista is only temporary. Their OWN leisure estate is the leading edge of further sprawl that will change their view dramatically, unless they have an enclave surrounded by public lands.

Rural communities were left high and dry as the loggers and miners marched across the country, cutting out and digging out as they went. This did not end in the 19 th century. One reason for creating a federal land system was to bring this to an end. Remaining rural communities in the West are now seeing their way of life, always at mercy of distant markets and capitalists, being further threatened by events in distant courtrooms and committee rooms. Gentrification and planned de-industrialization are well underway (for the view from Maine, see Irland, 2004).

Some things we must do:

Complete the terrible chapter of our relations with Native Americans by finishing the settlement of remaining conflicts over their rights in the landscape and its resources.

Immunize more privately owned wildland areas against subdividing and sprawl. If we don’t, we will surely lose them. In the Northeast, new working relationships have emerged, including longterm wood supply contracts and large scale Working Forest conservation easements. We must learn to do these things better, and find ways to make them work elsewhere. We need bold new thinking (for example, Foster, et al, 2005; SPNHF, 2001)

The notion of “stay off the public lands, let the private lands produce our wood”, is soon going to be obsolete. Those private lands are converting to private reserves and backdrops for “starter castles” instead.

The day of forest abundance is coming to an end. We will need further efforts at using wood more efficiently. Increased import dependence for wood is surely possible. It’s already happening. Our society usually takes the easy way out, just as we have done for oil (Berlik, Kittredge, and Foster, 2002).

We need new ways to secure public access to private lands. Elements of our European heritage on this point were unfortunately left behind there.

We do not do growth management well in this country. We must learn to do it, and legalize efficient use of land (see, e.g. Szold and Carbonell, eds. 2002). In the areas most at risk of land use conversions and fragmentation, local and county governments have the weakest land use controls. In more than a few instances, rural de-industrialization gives their urge to develop an even more desperate character.

We must examine experience here and elsewhere to see if we can devise a new mix of private ownership institutions capable of sustaining forest ownership and management in large tracts for the long term. Some of these may seem fanciful today. But the situation is unprecendented, and demands major innovations. Options include ways to enhance the survivability of what we already have: tribes, bands and nations among the Native landowners; publicly held vertically integrated corporations; institutional investors; charitable investors (e.g. Methodist church/Collins Pine); private families, estates, and trusts. We should look at more radical notions: a new form of post-feudal, entailed estate that is built for extreme durability and is held in a portfolio like a 100-year bond; stronger institutions to enable small owners to act collectively through farm cooperatives or other groups.

I recently entitled a presentation, “What good is sustainability if we have no forest?” This was not merely in jest.

The only thing worse than the unplanned destruction of the forest will be the planned destruction of the forest. We will see much more of this in our lifetimes. I believe future generations will curse us for it.

 

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