Saturday, January 23, 2010

How Mitigation Can Benefit the Vacant land Investor and the Environment

Environmental mitigation describes projects or programs which are intended to offset development impacts to an existing natural resource like wetlands, endangered species, rivers and streams. Environmental mitigation is typically a part of an environmental crediting system established by governing bodies like the BLM (Bureau of Land Management) which allocates debits and credits. It is similar to the government proposed cap and trade system to offset global warming. A debit to the environment would occur when a housing developer, or Wind and Solar Company plans to develop land for commercial purposes. A debit occurs when a natural resource has been destroyed or severely impaired, while a credit is given when a natural resource has been deemed to be improved or preserved. So, when a business or individual has a debit to the environment then they are required to purchase a credit. There is also mitigation banking which is typically created in advance for multiple commercial parties when compensation credits cannot be achieved at the development site. Mitigation is a friendlier alternative to restrictive environmental laws, since development can proceed in exchange for compensation to preserve or repair a natural environment. Mitigation can also be beneficial to land owners, since some land like wash land or mountain land is not developable, but it is more suitable for mitigation. This increases the value of some non-developable land miles from development.
In Northern Los Angeles County and San Bernardino County some renewable energy companies may be required to purchase mitigation land if their projects are on BLM or other undisturbed land, which may encroach within prime desert tortoise and Mojave ground squirrel territories. The desert tortoise roams much of the desert in San Bernardino County, which will curtail any development within their habitat. Much of this land is privately owned, and may be designated as mitigation land by the government. The Solar Farm developers may be forced to buy endangered species land before a building permit is issued. This is another example where land banking is beneficial to the long term investor. Many investors think that their property will primarily increase in value due to urban development upon their property, but in this case virtually worthless desert land becomes a needed commodity to the technological advances of solar energy companies. The new growth in Antelope Valley and San Bernardino Counties is increasingly becoming green energy development, and the wise patient land investor can benefit and preserve the environment at the same time.

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