Endangered Species Act’s Effects on Real Estate

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Table of Contents

Abstract
Introduction
Endangered Species Act on real estate developers
Effect of Endangered Species Act on real estate development
Political effects of Endangered Species Act on real estate development
Conclusion
Works Cited

Abstract

Laws such as the U.S. Endangered Species Act and the Marine Mammals Protection Act affect nearly every sector of the economy, like real estate development.

As a result, the policy debate over how to protect species is highly charged and requires significant expertise in numerous economic specialties and geographic regions. Real estate developers should possess extensive knowledge of the challenges associated with understanding and analyzing the complex relationship between species protection and real estate development activities. The negative effect of the Endangered Species Law can be seen on a broad spectrum of industries such as real estate development, fishing, forestry, power generation, mining, agriculture, ranching, and recreation in nearly every region of the United States.

Introduction

Real state development on the outskirts of existing urban, suburban areas is greatly encroaching natural homes of hundreds of species. This urban extension has been accelerated in the last several years by a booming economy, population growth, both baby boom ripples and immigration, and transportation and other infrastructure improvements that enable Americans to avail themselves of the amenities of the city while living suburban or exurban lifestyles. That was the reason for applying Endangered Species Act on the urban, suburban and exurban real estate developers, so we can save our most precious and beautiful endangered species and their homes. This act is affecting the real estate developers in their economic well-being.

Endangered Species Act on real estate developers

This act provides for the determination and protection of endangered species. It prohibits modification of an endangered species habitat by real estate developers because the development activities negatively affect the habitat. This modification or development of endangered species habitat is also called “taking.” No taking may occur without a permit, which must be sought from the U.S. Fish and Wildlife Service.

Effect of Endangered Species Act on real estate development

The following important factors, among others, could cause actual results to differ materially from those expressed in the forward-looking statements: changes in economic conditions, particularly in the southeastern U.S.; changes in interest rates; fluctuations in demand for or supply of real estate;

Competition with other marketers and developers of real estate in the areas in which the company operates; the ability of the company to identify and complete real estate transactions that provide acceptable financial returns for the company; unexpected delays in the negotiation and completion of real estate transaction; changes in law or policy that might limit or and completion of real estate transaction; changes in law or policy like Endangered Species Act that might limit or restrict the development of the real estate, particularly in the southeastern U.S.; the ability to obtain permits, entitlement, and approvals necessary for the development of real projects, and unexpected delays in the timing thereof; and implementation of laws as Endangered Species Act.

The Endangered Species Act permits real estate development-induced take of protected species on the conditions that they take is not the purpose for the development project and that certain measures are implemented to minimize harm to the species.

One form of incidental take authorization in the Endangered Species Act is the section 10 habitat conservation plan permit program. Section 10 of the Endangered Species Act specifically provides for the permitting of incidental takes occurring in land development projects not carried out, funded, or authorized by the federal government. With the increasing attention to private lands as critical habitat for endangered species, this permit program has become important.

When a real estate developer starts his projects, he will have to begin by exploring the factors used to determine whether a habitat conservation plan permit is necessary for the project and the process, how to obtain the permit once its necessity has been determined.

Resolution of these fundamental issues depends in differing degrees upon the black letter law of the habitat conservation plan program, written and unwritten guidance and policy, other sections of the Endangered Species Act, as well as varying interpretation and implementations of the applicable law. Despite disagreement over whether the Habitat Conservation Plan program can truly work effectively towards both real estate development and species conservation, those who understand how the Endangered Species Act works in practice are better situated to contribute to those dual ends (conservation of species and real estate development).

A consumer could be exposed to potential liability to the real estate developer if the consumer’s investigation identifies an endangered species issue on the property, which then comes to the attention of the public or applicable regulatory authorities and negatively affects property values. A consumer who is investigating a potential property for purchase should generally obtain the developers’ consent before asking regulatory agencies such as the United States Fish and Wildlife Service or the Colorado Division of Wildlife to review the specific property in any detail. In addition, private land development activities do not generally need approval by United States Fish and Wildlife Service unless the proposed development requires a federal permit such as Section 404 permit for the disturbance of wetlands by the United States Corps of Engineers.

Political effects of Endangered Species Act on real estate development

The political complications of applying the Endangered Species Act to existing urban, suburban and exurban residents are quite different than the typical rural natural resource project. First, urban, suburban and exurban residents are likely to experience a substantial shock when they are told that their behavior, not the behavior of evil multinational mining or timber companies, is responsible for species loss.

This may reduce the tendency to demonize parties that are adversely affected by Endangered Species Act species protection efforts. Second, there are several reasons why urban, suburban, and exurban residents react better than regulated parties in the rural context. The political complication of applying the Endangered Species Act to urban, suburban, and exurban real estate development is more akin to applying the Endangered Species Act to rural natural resource projects.

Applying the Endangered Species Act to urban, suburban, and exurban real estate development will strengthen opposition to the Endangered Species Act, particularly because real estate developers are frequently ideologically opposed to government regulation, organized, and have a strong incentive to torpedo the Endangered Species Act because the restriction on real estate development is central to their economic well-being. On the other hand, real estate developers are easy to demonize and may provide a useful scapegoat to blame for the stringency of species protection restrictions encountered by urban, suburban, and exurban residents.

In addition, most urban, suburban, and exurban residents are genuinely concerned about the urban extension, far more than they are concerned with the wilderness impacts of mining or oil and gas development. Urban extension directly and adversely impairs their quality of life in terms of congestion, pollution, increased strain on limited public services, and loss of the open space amenities that made many suburban and exurban residents flee the city.

An optimal level of wildlife resources requires that private incentives and local support lead to resource allocations that meet the growing demand for wildlife. Where there is the case, there is an economic rationale for developing policies that increase the compatibility between traditional resource uses and wildlife. Several policy approaches can be used to achieve this objective, including regulation, voluntary incentives, and technical assistance.

Regulatory policies rely on mandatory restrictions to bring resource use in line with conservation objectives. The Endangered Species Act and the Clean Water Act are examples. The Endangered Species Act, for example, allows for the designation of critical habitat areas for endangered animal species. The critical habitat areas designation affects non-federal lands, and use that degrades these habitats can be punishable by fines or imprisonment. While the Endangered Species Act has been credited with protecting a number of species but there are potential drawbacks to using regulations to protect and wildlife and habitat, particularly on private lands.

The critical habitat areas resignations, for instance, may prompt real estate developers to consider endangered species a liability, especially in the face of increasing uncertainty about future land uses and possible reductions in land values. Real estate developers may avoid actions that could restore or enhance habitats or attract endangered species to their land. Furthermore, existing regulations cannot require real estate developers to initiate actions that promote conservation efforts.

Conclusion

As the Endangered Species Act comes to the urban areas, it is likely to foster an enormous amount of change in federal relationship with respect to resources, in the state and local land use planning mechanism, in urban, suburban, and exurban real estate development, and in the behavior of everyday urban dwellers.

Done well and with sensitivity to the legitimate interests which are affected by species protection efforts, the federal species protection laws such as the Endangered Species Act may survive the trip to the city and actually be strengthened by the challenges met. However, there is grave danger in the opportunity. If federal protection efforts are not well-conceived and properly executed with sensitivity to legitimate local interests, the Endangered Species Act may lose the support of urban dwellers upon which it depends for its continued existence.

Works Cited

Arther B. Daugherty, Major Uses of Land in the United States USDA-ERS. 1995.

Flather Crutis H., Linda A. Joyce, Carol A. Bloomgarden, Species Endangerment Patterns in the United States Technical Report. 1994.

Jan Lewandrowski K. and Kevin A. Ingram, Policy Considerations for Increasing the Compatibilities Between Agriculture and Wildlife Natural Resources Journal, 1999.

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