The new California land rush

Days after the state of California paid $275 million for the largest open-space purchase in the history of the state, environmentalists and fiscal conservatives were surprisingly united with a common complaint: The land was too expensive.

At between $45,000 an acre for Ahmanson Ranch and $289,000 an acre for the Ballona Wetlands, this dirt was pricey. But according to Ed Balsdon, a professor of environmental economics at San Diego State University, pricey is good for both groups.

Here’s why: If owning important habitat prevents landowners from getting a return on their investment, they will sell the habitat, usually for some marginal economic use—think strip mall or storage sheds—as soon as they can.

Bye-bye, birdies.

But recently, the Wildlife Conservation Board sent this signal to large California landowners: They can make money from their habitat—as habitat—so suddenly, the urgency to sell their land is a lot less pressing.

This has been happening in San Diego ever since the creation of the Multiple Species Conservation Plan. An agreement between environmentalists and landowners set aside large parts of San Diego for habitat and open space, reserving the rest for development.

In order to build, a developer must buy other habitat, about three times more land than what they are developing.

Land that was worthless just a few years ago is now fetching $35,000 an acre and more. This new land rush has produced a new crop of passionate environmentalists: property owners.

Environmentalists are happy because more habitat is being protected. And fiscal conservatives are happy because these transactions are between private parties. The government usually spends nothing.

The $275 million for the recent transactions came from ballot-authorized wildlife funds.

But old battles and ancient suspicions between landowners and environmentalists have made some wary. Already, newspaper columns are suggesting this new reality is a plot to pay off political debts, a complaint that calls to mind the Oscar Wilde definition of a cynic as someone who knows the price of everything but the value of nothing.

There should be nothing cynical about this success story. This new market for habitat means more open space for environmentalists with less money from government. And not even the grumpiest cynic will be able to find fault with that.