# Agricultural land value grows by leaps, bounds



## Hamilton Reef (Jan 20, 2000)

Note:
Sportsmen who want to buy hunting grounds and investors who want a solid investment in a shaky economy could explain why the value of agricultural land has risen so quickly in rural areas, said Richard E. Leach, a retired director of communications and government relations at Bay City-based Michigan Sugar Co. Leach has studied the market as he pursues a career in real estate sales.

Up on the farm Agricultural land value grows by leaps, bounds

http://www.mlive.com/news/sanews/index.ssf?/base/news-18/1141395605115900.xml&coll=9

Friday, March 03, 2006 BARRIE BARBER THE SAGINAW NEWS 776-9725.

Farmland in western Saginaw County racked up a double-digit percentage rise in assessed value, easily outpacing other properties, county records show.

Marion Township led the pack last year with a 16.6 percent rise in the state equalized value of land classified as agriculture. Sales prices often exceed that, however. 

Across the county, agricultural land values rose an average of 7.1 percent between 2005 and 2006, eclipsing commercial with a 5.1 percent jump, residential at 3.4 percent and industrial at 1.6 percent, county Equalization Department figures show.

Why Marion Township? 

"People have just realized the value of land," said Township Supervisor Audrey Reikowsky. "This is a peaceful little community, and you still have the idea that you're up north when you're still in a local area." 

Other high gainers in farmland value were Brant Township, jumping 14.1 percent, Brady Township at 13.1 percent and Chapin Township at 12.5 percent. 

By comparison, no residential property in the county's municipalities marked more than a single-digit percentage gain, based on preliminary figures. 

A full report on all property values is due in April. 

Farmland was selling for $2,900 per acre on average in most recent sales in Marion Township, compared to more than $2,100 the last time it was surveyed, said County Equalization Director James T. Totten. 

It wasn't the most expensive: agricultural land used for farming sold for about $3,800 per acre in Spaulding Township and $3,500 in Blumfield Township, he said.

Farmers may simply need more land, pushing prices up, Totten said. 

"What farmers are willing to pay for property has increased, as far as we can tell, throughout mid-Michigan," he said. 

Commercial developers paid the highest price for property in Kochville Township where agricultural land sold for $6,000 to $7,000 per acre, Totten said.

Sportsmen who want to buy hunting grounds and investors who want a solid investment in a shaky economy could explain why the value of agricultural land has risen so quickly in rural areas, said Richard E. Leach, a retired director of communications and government relations at Bay City-based Michigan Sugar Co. Leach has studied the market as he pursues a career in real estate sales. 

Jonesfield Township resident Kenneth R. Coppens Sr., a farmer, said outside pressures have inflated prices. The value of agricultural land in Jonesfield has risen by 12.2 percent from last year, equalization figures indicate. 

"Part of the problem is we have outside investors coming in," said Coppens, 58, who farms about 1,350 acres of corn, soybeans and sugar beets. 

Investors often rent the land out, subdivide it or enroll it in government agriculture programs to turn a profit, he said. 

Government officials use state equalized value to help determine how much property tax real estate owners pay. State law caps the rise at 5 percent or the rate of inflation, whichever is less.


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## lwingwatcher (Mar 25, 2001)

SEV is determined by sales studies so that the rolls can be equalized to approximated 50% of true cash value.

If sales drive things up (for whatever reason) that is what effects the tax increases.

Ground is worth what somebody is willing to pay for it...but there are way more factors involved than what the article says...

Just cuz something was classifed for tax purposes (not necessarily zoning) as ag ground doesn't mean that it was actually used for or sold as ag ground---get the idea?


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## Hamilton Reef (Jan 20, 2000)

Developers are buying up urban farm land zoned as agriculture and they have no intention of being farmers. They still get the low agriculture tax rates using leases while they then get the townships to rezone the land for later development. No rush as they can either buy off the current twp board or wait to unseat and put in their own cronies in while the land values rise. It is not until after the land is sold into housing urban sprawl that the last buyer pays the higher taxes. This is the big taxpayer subsidy to the developers by deliberate design. All attempts in the last three years to correct this has been obstructed by legislators controlling both house and senate controlled by the realtor and developer lobbies. This has been discussed before on other forums.


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## Spartaned (Jan 24, 2006)

This is an interesting topic. A lot of the land mentioned is in the Saginaw County area. As discussed, a couple different things are going on. The Kochville Twp (Saginaw County) ag land is being sought and bought by developers, while the Spaulding Twp (also Saginaw County) land is mostly being bought up for deer hunting. The portion of the Shiawassee National Wildlife Refuge which lies south of the Shiawassee River lies in Spaulding Township. During the past ten years or so private hunt clubs, and individuals have been buying up land bordering the refuge as it became available from farmers. Some of these farmers weren't able to ever fully recover from the 1986 flood, maybe had kids who didn't want to farm anymore, were ready to retire, etc., so it made more sense for them to sell their ag land. The remaining farmers lease their land for deer hunting. At least the hunt club folks and individual hunter owners aren't developing the ag land.


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## Hamilton Reef (Jan 20, 2000)

Note the links I put at the end for reference.

INSURANCE RATES DRIVING SPRAWL?

http://glrc.org/transcript.php3?story_id=2974

Lester Graham March 27, 2006

People who live in the city pay higher insurance rates for cars and homes than people in the suburbs. Often it's a lot more. The insurance industry says its using the fairest method. The GLRC's Lester Graham reports that method might contribute to urban sprawl: 

(Sound of car starting) 

We're taking a little drive and Brandi Stoneman is showing me where she used to live. Its just two-and-a-half miles from where she works. But she met a guy they dated they fell in love and after a while decided to move in together. His house was bigger. So, Brandi moved from her home near downtown and out to his house 15 miles out into the suburbs. 

When she told her insurance agent she got a surprise. Her auto insurance rates dropped a lot. 

"It almost was in half when theywhen I told them Id moved and changed and it almost dropped in half. Of course I was excited, but it was amazing. It was a huge difference." 

"Did you ask them why?" 

"I did ask them why and they said, of course, that it was the area that I lived in. It went by the zip code and it didnt have really have much to do with the fact that I was farther away from work." 

So, instead of five miles to work and back she drives 30 miles to the same downtown location, but that wasnt the only surprise. She kept her old home in town... so, like her boyfriend, she still needed to buy homeowners insurance. 

"And when we both were looking and shopping for insurance rates, I spent about three-to-four hundred dollars on my premium on a house that was almost half the price of his, and that was, again, because of where I lived and the zip code and the area that I live in. 

If you live in the city this might sound familiar. You probably know a colleague or friend in the suburbs whos paying a lot lower insurance rates. Stoneman lives in Michigan. That states Office of Financial and Insurance Services spokesman, Ken Ross, says its typical of insurance rates across the country. 

"Our urban population centers have experienced higher rates for both home and auto insurance. That is a function of insurance companies pairing the higher costs associated with living in an urban environment, higher concentration of people with higher losses and those losses are paired with rates being filed and ultimately premiums being charged to consumers who live in those areas." 

And the regulators say thats a pretty fair way of doing things. The insurance industry also thinks its fair. 

Peter Kuhnmuench is with the Insurance Institute of Michigan. 

"Largely because of the density of the population, the incidents of collision, the incidents of theft are much higher in an urban area than they are out in the outlying suburban areas." 

Kuhnmuench says if people choose to live in the city, they should expect to pay higher insurance rates. He agrees that the lower rates in the suburbs might be an incentive to move there. 

"Well, I would certainly believe that cost factors for insurance would be a contributing factor to your decision to move from the city to the suburbs. Obviously, higher insurance rates reflected in the city could be one of those contributing factors, I guess, Lester, but overall those rates pretty much reflect the underlying costs to provide the coverage in those areas." 

Different state legislatures have considered laws that would make insurance rates less dependent on where you live, but those kinds of bills usually dont even make it to a vote because legislators dont want to anger suburban voters by making them subsidize urban insurance costs. 

So instead, more people move to the suburbs and ironically, everybody else subsidizes the cost of new suburban streets, more lanes of highways, and other infrastructure costs associated with the sprawling suburbs and accommodating the people who commute to the city. 

And while the lower insurance rates encourage a move to the suburbs, big city mayors say the higher rates in urban areas discourage redevelopment in the city. Those mayors, urban legislators, and advocacy groups lobby state legislatures to find an insurance rate structure that doesnt penalize those people who choose to live in the city and reward those who spread out to the suburbs. 

For the GLRC, I'm Lester Graham.

Urban Sprawl: the Big Picture http://science.nasa.gov/headlines/y2002/11oct_sprawl.htm

Spraw city http://www.sprawlcity.org/


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