September 18, 2017
As I ride in my car looking at the landscape, I wonder who owns that home or that piece of property. What amazes me is that outside of national parks, basically 99% of American property east of the Mississippi is owned by someone. Ride for mile after mile and virtually every acre you see is owned by someone. I have clients in the agricultural business whose families grow cotton, soybeans, and timber who have held their property for generations. I have also witnessed families that have been forced to liquidate and divide their property. One thing has been constant – if you own it, then you can sell it. You might not like the price, but generally speaking there is a clearing price for property. This is true because there is no subsidy on the price of land, or so I thought!
Recently I have made some travels out West. I was dazzled by the vistas, rivers, mountains, and prairies. I am sure many of you have seen this for yourselves. Part of my trip involved some fly fishing on the Big Hole River. One evening after dinner I was speaking with the owner of the fishing outfit about property values. He stated they were good, primarily because of outside investors wanting to own a “piece of the dream”. I told him I get that, but then I asked him about his property. He had about 300 feet on the river with a view of three large mountains that bordered the other side of the river. This combo offered him a million dollar view. He said the three mountains were “federal land” and controlled by the Bureau of Land Management, a division of the Interior Department. I learned the Bureau is responsible for managing the massive tracts of federally owned land mostly in the west. As the West was homesteaded in the late 1800s much of the land was undesirable so the government kept it. The land no one wanted is now leased to ranchers to graze their cows, to energy and mining companies, or sold to logging companies that clear cut land. Debate rages as to the value the Bureau is providing.
My observation to the businessman who owns the property on the river with the free view was simple. What happens if someone buys one of those mountains? He responded, “who would want it?” I said, “whoever has the money to buy it.” And here is the problem I have: you see someone already owns it. People forget that the Federal Government is a substitute for you and me and every taxpayer in America. I’m not sure our Western land owners appreciate the subsidy we Americans are providing them.