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Greg Blomstrom
As you drive home one afternoon, you notice a new “for sale” sign stuck in the ground on the forested parcel next to your house. A quick inspection of the sign taxes believability: For sale this lot plus an additional 430,000,000 acres of private forestland – inquire with owner.
Seem unlikely – think again. The US’s private forest lands are being sold off for development at an unprecedented pace, a pace that has troubling implications for clean water, biodiversity, recreation, etc. How about the following headline coming to you in the near future: Environmental organizations support big timber to reduce fragmentation of forestland into starter castles and McMansions.
While the above headline hasn’t yet been seen in the US, the impact of the past and near term sale of timberlands is fast becoming the subject of mainline newspapers and magazines backed up by research by academia and the financial community. Recent articles in High Country News (For Sale: The West 1/23/06), Washington Post, 3/20/06 (Timber Firms' Sell-Off Worries Environmental Groups), Forbes, 2/23/06 (Florida Land Enriches Timber REIT) etc. talk about the pace of land sales, the fears of environmentalists that large industrialized ownerships will be fragmented into starter castles, and the huge change in ownership patterns at major timberland owning companies not foreseen even 15 years ago.
Among the many reports discussing the change in ownership is a report titled Changing Timberland Ownership in the Northern Forest and Implications for Biodiversity by the Manomet Center for Conservation Sciences, December 2005. The report summarizes the current trend stating:
“Until recently, the traditional owners of large tracts of private timberland in the U.S. had been vertically-integrated forest products companies (VIFPCs, e.g., Champion, International Paper, Georgia Pacific) that owned mills and needed a timberland base to keep the mills constantly supplied with fiber. In the 1980s and 1990s, a complex mix of global and financial circumstances converged to precipitate dramatic changes in timberland ownership in the United States. As a result, in the 1990s, VIFPCs began to sell their timberland holdings at a remarkable rate, while in most cases retaining ownership of their mills.”
“In 1981 there were about 58 million acres of publicly-traded forest industry land in the U.S.; in 2005 there were less than 21 million acres, a 60% reduction (Seneca Creek Associates 2005). Most of the new timberland buyers have been various financial investment organizations, such as John Hancock Insurance, TIAA-CREF, CalPERS, and many others.”
The shift from industrial forest ownership to various new owner types is nearly complete in Maine, for instance. In Maine in 1994, forest industry owned about 60% (4.6 million acres) of the large tracts (>5000 ac) of timberland and financial investors owned about 3%. By May, 2005, financial investors owned about one-third of the large forest tracts and industry owned only 15.5% (1.8 million acres, mostly in a single ownership).
A recent USFS study Forests on the edge: housing development on America’s private forests. (http://www.treesearch.fs.fed.us/pubs/9841 - Gen. Tech. Rep. PNW-GTR-636. Portland, OR:) predicted that more than 44 million acres of private forest land, an area twice the size of Maine, will be sold over the next 25 years. The consulting firm U.S. Forest Capital estimates that half of all U.S. timberland (215,000,000 acres) has changed hands in the past decade. The USFS report predicts the greatest change is expected in the east, particularly the Cumberland Plateau, however, substantial change is also predicted right here in Northern California. According to the report two of the four areas in California expected to have the most reduction in private forest land acreages due to development, are right here in ISF’s backyard, the area around Humboldt Bay, and portions of the Napa, Sonoma and Mendocino areas. The other two areas are located east of Sacramento and the area east of Fresno. PALCO’s potential sale of 15,000 acres of forestland includes a potential sale of 3,500 acres to a Colorado real estate firm, which only confirms the trend locally.
However, not all of the forestland on the block is owned by dinosaur vertically integrated forestland owning firms noted above. According to recent work by the Pinchot Institute, the United States is about to witness the largest intergenerational transfer of family forest ownership in the nation’s history. Given the extent of private forests in the United States, and their significance for conserving public values such as water quality and wildlife habitat, it will be important to develop a clearer understanding of the changing needs and interests of the next generation of owners.
Although the death or dismemberment of old style clearcut and burn dinosaur timber companies like Weyerhauser, PALCO, Louisiana-Pacific et. al. might bring joy to the hearts of environmentalists, indeed to many of us, think again. While the rapaciousness of these companies is legion, the new owners of many of these lands often do not have a long term interest in supplying wood to mills. Indeed, the antics of the TIMO’s have been the source of much concern to organizations such as ISF, which promote sustainable forestry. For instance, Plum Creek Timber, a Real Estate Investment Trust, which has carefully cultivated (some would say propagandized) it’s corporate image of environmentally conscious stewardship of forestland is endangered by its decision to aggressively sell wilderness lands to developers for resorts, vacation homes, golf courses and recreational-vehicle parks. Indeed, in an examination of Montana's environmental problems in last year's bestseller Collapse: How Societies Choose to Fail or Succeed, author Jared Diamond cites Plum Creek in a discussion of how corporate and public interests often clash.
Several landowner types have emerged or expanded in the last 10 years, including various Financial Investors (e.g., Timber Investment Management Organizations), Real Estate Investment Trusts, timber barons (often former or current logging contractors), private individuals (e.g., “kingdom” buyers), and non-profit conservation organizations. Unlike the former forest products industry landowners, which concluded that forest certification was necessary to maintain a social license to cut wood, many of the new owners are less inclined to participate in a social dialogue on sustainable forestry, such as forest certification, which ISF has promoted. The Manomet paper states that in Maine at least,
“Industry had the strongest overall biodiversity practice scores in our survey. Some new owners excel in biodiversity conservation, but many have weaker biodiversity practices than industry. At the regional scale, overall biodiversity practices have likely declined in quality as a result of the loss of forest industry land ownership.”
While die hard environmentalists might dispute that the Forest Products Industry has strong overall biodiversity practices, compare the potential biodiversity practices of industry managed land with a forested parcel fragmented into 5 acre parcels, each with its own house, paved driveway, separate garage, barking dogs, kids, roundup applied to the lawn to kill weeds, insecticides sprayed to control mosquitoes, chiggers, changes in runoff near streams, etc. Ultimately, these forested yet highly fragmented parcels are worth little to wildlife and fish. Among other things to consider is that increasing affluence of the US population has led to homeownership in which 15%of all homes owned in the US are SECOND homes, often vacation homes in rural areas.
At ISF we have been promoting solutions to the ongoing and increasing problem of fragmentation of forestland likely to take place in Northern California and indeed throughout the west. Check out some of the other articles in this newsletter for what we consider some of the best approaches to offsetting the effects of forestland sales.
Author bioForest
Fragmentation
Greg Blomstrom
Ecosystem
Services
John Rogers
Protecting
Working Forests
Richard Geinger
Forestry
and Fire Safety
Cybelle Immit / John Rogers
Working
Forest Bonds
An ISF proposal
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