National Forum

Working with the property market to care for bushland
Keith Bradby, Policy Officer
Sustainable Rural Development Program
Agriculture Western Australia

Context

Western Australia has extensive areas of privately owned bushland - most of it on farms, and most of it land that was originally intended for clearing.

The smaller areas of bush, and often the larger ones as well, are an intrinsic and essential part of the farming enterprise. However, many farmers find the cost of owning and managing large areas of bush a significant financial burden. Additionally, since 1997 clearing controls have been strengthened to a level where broad-acre agricultural clearing has virtually ceased. This has fuelled calls for either compensation or sizeable economic assistance measures.

"The State Government is now adopting a strategic approach that provides increased levels of assistance to all farmers".¹

The approach being implemented recognises that it is inequitable to provide assistance to landholders prevented from clearing without also providing similar, or better, assistance to those who voluntarily stopped clearing their properties many years ago, when the problems of salinity and biodiversity loss first became apparent.

The approach also recognises the need and opportunity to get multiple benefits from whatever assistance measures are provided. It is not just about alleviating economic stress on farmers and it is not just about retaining woody vegetation to reduce salinisation. Nor is it just about seeking nature conservation benefits. It is about getting all of these and more from whatever actions are taken.

The "strategic approach" covers four interrelated areas of action. These involve:

Gaining greater acceptance by landholders that having areas of well-managed bush on their property is an integral part of operating a productive and sustainable farm.

Removing disincentives and adding incentives that affect a landholders' ability and willingness to own and manage large areas of bushland.

Utilising market based approaches to the fullest possible extent, before programs that interfere with the free market are introduced.

Acting to address unresolved cases. Where other measures fail, providing both compassionate and active intervention to address the needs of the families affected and the landscape at large."²

This paper sets out some of the steps being taken to "utilise market based approaches to the fullest possible extent".

The market for bushland

There has always been a market for the conservation values of bushland, but it has historically been quite small. In the past bush was invariably referred to as "undeveloped" or "uncleared", and mainly sold to people intending to clear it.

Following realisation amongst farmers that the clearing controls were "for real", (1997 onwards) a number of large bushland areas attached to farms in the inland agricultural areas were traded at zero value per hectare, when included with the larger farming property. In fact, some landholders have claimed that having a large area of bush (over 25% of the property) has made it harder to sell their farms.³

In the past twenty years there has been a significant increase in the purchase of bushland, for a mixture of lifestyle and conservation reasons (see Attachment 1). This has mainly occurred in the higher rainfall and better populated parts of the state. It has included a small number of farmers, and in at least one case a landcare group, who have not only conserved the bushland remaining on their property, but have gone on to buy adjoining bushland in order to conserve it.

In the past five years the number of bushland properties sold specifically for conservation or conservation/lifestyle purposes has increased, and the rate of increase may be accelerating. This market, while often linked with lifestyle or recreational choices, is definitely not confined to the "green, wet and less than three hours from the city" purchaser - "dry, prickly inland scrub" is selling. Further work is required to determine the scale of the market, and the increase.

Notwithstanding the above, so far it is only in the greener, wetter or coastal areas of the state that the price of bushland regularly exceeds that of cleared land. In other areas the price can be as low as one-third that of cleared land. Very few, if any, blocks sell below $30-40,000, regardless of size or location. Owners find it is just not worth the hassle and paperwork to sell land much below that figure.

Even the current level of sales has helped many farmers realise that their bush is a valuable asset- I know of a small number sitting quietly and waiting for the market to rise further. This includes some who purchased their farm since 1997, who literally got a large area of bushland "free", as part of a larger farm purchase, and are now moving to subdivide the bushland for future sale.

In addition, there appears to already be a trend for well vegetated farms to sell more readily than bare properties, depending on district, and farms with substantial areas salt affected or salt prone are starting not to sell.

More definitive data on these trends is currently being collected.

Using the planning process

Our earlier land planning did not recognise the need to cater for bushland as a priority land use, or the need to facilitate conservation by private individuals. It now needs to, and is staring to.

Subdivision for conservation

The large number of bushland areas attached to agricultural titles cannot be sold unless subdivided onto a separate title. Some individuals have been able to achieve this, through direct negotiation with their council and the Ministry for Planning.

However, in WA the planning system has held a general presumption against the splitting of "agricultural" titles⁴. It has been necessary to bring in specific policies recognising the fact that bushland can no longer be considered agricultural, or potential agricultural, land.

There has been considerable industry lobbying and inter-agency discussion on how to establish bushland as a priority land use. As a result, the WA Planning Commission recently released a "Subdivision for Conservation" policy which facilitates the splitting of bushland from agricultural titles, subject to covenants⁵. However, it needs to be stressed that this is only intended for those farms with large bushland areas, generally in excess of 20% of the total property area.

In addition, Agriculture Western Australia assists some landholders seeking to place bushland on a separate title. This has been underway on a small scale since 1997, and is likely to be increased through the establishment of a Case Management process for landholders affected by clearing controls.

We do this because subdivision is recognised as one way to increase the value of bushland, and reduce any loss to the landholder of not being able to clear. As a general rule, the smaller a parcel of land the greater the price per hectare. When you subdivide a large area of bush from a farm, then the bush invariably has a greater market value than when it was attached to the farm.

If you can place the bush into a number of titles, then the value per hectare can increase significantly. You also reduce the unit cost of each property. Three 200 hectare blocks at $80,000 each are generally easier to sell than one 600 hectare block for $190,000. The trick is to do this without diminishing the conservation values.

Survey strata title

There are a small number of innovative property development proposals occurring, including the establishment of survey strata developments, which cause minimal short term damage while securing long term conservation management for the bushland.

In WA the Strata Titles Act (1985) allows a proprietor (individual or corporate entity) to gain a negotiable title to, and exclusive use of, a defined portion of a parcel of real estate whilst enjoying the use and enjoyment of common property portions of the parcel. The title is transferable as for freehold and can be used as security for borrowings. A management statement, promulgated by the strata company, binds all proprietors in protecting designated values of the parcel (such as the environmental values) and the rights of other proprietors. Whilst the Act was originally designed for high-rise apartments (vertical strata) it has been extended to provide for rural holdings (horizontal strata or survey strata subdivisions).⁶

Strata Titles are possibly most suitable when a number of owners want to live on a parcel of land, sharing the responsibilities and costs with a group but wanting some personal security for their personal investment. Strata titling allows the buildings to be clustered and contained in one part of the land parcel, with any large areas of bush managed as one unit and not broken up with fences and fire breaks for individual holdings.

A Survey Strata Title has a number of key components:

allocation of specific building lots which, while subject to certain agreed guidelines, enable each owner to have security, privacy and "ownership", including the ability to sell their portion independent of the other owners;
allocation of portion of the parcel as "common property" which can be used by all owners under agreed conditions, but where all owners have shared management responsibilities;
legal "security of purpose" for the various areas of each block, through formulation of "management statements" that are attached to the title, and the ability to assign different management statements to the various areas;
formal mechanisms for payment of annual management fees by each lot owner towards maintenance of the common property;
establishment of a Strata Company, made up of the proprietors , which carries responsibility for undertaking management of the "common property", and which can employ staff or contractors as required; and
formal processes for dispute resolution should these be necessary.

Because the conservation objectives of a survey strata title can be clearly and irrevocably defined before it is established it will only attract people who share those objectives. This enables the owners to form what is essentially a "private conservation association' of like-minded folk, where the price of membership is the cost of part of the property.

Bush Brokers

Every day we are faced with countless attempts to influence our spending. Which fast food to eat tonight, which brand of 4WD we would feel most superior in, and which insurance company we would get the best feeling of security from. Obviously we should also be encouraging people to make a personal investment in owning and managing bushland.

The concept of government officers, a private conservation group and the commercial sector cooperating to stimulate private conservation investment in bushland arose during 1998 in a number of informal gatherings held, generally held in coffee shops, between friends with a shared professional interest in bushland conservation. A number of those involved had also been directly involved in conservation purchases and recognised that the emerging conservation market for bushland could be expanded.

These discussions also drew on experience with the Natural Resources Adjustment Scheme, a government program which made "adjustment payments" to landholders affected by clearing controls in return for conservation covenants over their land. The payments were equal to any loss in market value of the property that occurred as a result of the clearing controls. In a number of cases the scheme was also able, acting informally, to find buyers for the bushland. This provided the farmers with a larger capital injection, often enabling them to expand onto nearby cleared land, and gave the bush secure long-term conservation ownership and management.

Initial contact with the real estate industry came through an invitation to address the Rural Chapter of the Real Estate Institute on clearing controls and the likely options for affected landholders. There was good rapport developed at that meeting, particularly as a number of rural agents were already involved in, or supportive of, the landcare movement. A few were already targeting the conservation purchaser.

Various meetings (more coffee shops) between Keith Bradby (Agriculture Western Australia/Soil and Land Conservation Council), Denise True (World Wide Fund for Nature) and Alan Bell (Rural Chapter of REIWA) explored the common ground, and a basis for common action was developed. It was not all plain sailing, and a fair bit of time and effort was spent on building a common understanding and trust.

In broad terms, the common goals identified were to:

increase the amount of bushland purchased and managed for conservation in Western Australia;
raise the market value of bushland to make it more valuable to conserve than to clear;
assist rural communities to retain valuable bushland without the economic cost being unfairly placed on a few individuals; and
build greater flexibility into planning processes so that land can be traded and used in a more sustainable manner than at present.

The main actions agreed on were:

undertake a number of steps to stimulate the conservation market and so increase the number of bush blocks purchased and managed for conservation;
develop and operate training/awareness programs that increase realtors ability to not only target the conservation market, but to service that market responsibly;
undertake detailed market research to improve targeting of the private conservation market; and
jointly lobby for policy, planning and taxation measures that make conservation purchases easier and more attractive.

The common goals and the proposed actions were formalised into a program called Bush Brokers, which was established formally by a Memorandum of Understanding signed on 14th December 1999. This established a formal working partnership between:

the state committee representing rural WA with regard to the Soil and Land Conservation Act, the Soil and Land Conservation Council (SLCC);
the industry sector associated with selling and purchasing of property - the Real Estate Institute of Western Australia (REIWA); and
a non-government conservation organisation with nationwide capacity and presence - World Wide Fund for Nature Australia (WWF).

The key activities agreed to in the MOU were:

Pamphlets outlining key issues for both purchasers and sellers.
Combined lobbying to promote improvements to government policies, particularly subdivision policies and procedures.
A register of bushland currently for sale, and buyers seeking bushland.
Research on the size of the bushland market, and the most cost-effective measures to stimulate that market.
A case studies handbook of people and groups who have already bought bush.
"Marketing Bushland" Training Seminars for rural agents.
A "Marketing Bushland" component included in the accredited REIWA course.
A schedule of bushland management advice.

Bush Brokers operation

The program had a long gestation period, and work has proceeded cautiously, mindful of the need to ensure three very distinct bodies are happy with the direction and the detail. The Bush Brokers partners meet regularly to plan and work on various aspects of the partnership, and the various elements are gradually being put into place.

Each partner contributes considerable staff time, and carries responsibility for specific activities. Funding for publications has been obtained from the State Landcare Program and for additional publications, a web-site and market research from Environment Australia. It is considered that the project will be largely self-sustaining once it is established and consolidated.

The project would have benefited originally from a specific person being allocated to getting the publications together, instead of the key people trying to fit the work into already busy schedules.

We are also having to recognise that for the larger agents, who are regularly selling farms in the $500,000 to $2 million category, the bush blocks are "small bikkies". But we are seeing the mergence of a small number of agents who are enthusiastic and who enjoy and respect bushland values. It seems likely that these will increasingly specialise into specific niche market that bushland now represents.

In addition to the activities originally agreed to, there has been a widening dialogue between the commercial, conservation and government sectors. Valuers have provided valuable information and perspective's to regional natural resource seminars and farm planning workshops, botanists and hydrologists have spoken at Australian Property Institute seminars.

Some policy impacts

Bush Brokers is one of those programs that could claim a few wins even before it was established. Catalysed by the dialogue that formed the partnership, there have been a number of mutually beneficial contacts made in the past two years between government, private conservation interests and the real estate and valuation industries. This has also been valuable in helping shift the rural emphasis from the short-term cash flow impacts of landcare and vegetation protection (often negative) into the long term land value impacts (generally positive).

The property industry was included in the Native Vegetation Working Group that formulated the strategic approach now adopted by the WA Government. Following this representatives of the property industry were included in the Farm Bush Advisory Committee established to oversee delivery of a Special Assistance Process for landholders with large areas of bushland.

The State Salinity Strategy now includes a section on the potential for catchment groups to undertake land-trading options that protect bush. Agriculture Western Australia is developing Environmental Management Systems for farmland that draw on the expertise held by the valuation industry. Proposals to establish a Land Trust in one part of the south-west is proceeding with a person from the real estate industry involved.

From a more personal perspective, I feel that working with agents and valuers is adding a strong "can do" element to landcare thinking, at both a strategic and a local level. Commercial operators, such as land agents and valuers, are used to operating in short time frames to bring different parties together into complex arrangements that has all parties on speaking terms when it's over.

Impact on the bushland market?

Bush Brokers is still at the information and awareness stage. Agents are being exposed to our thinking on the scale of the emerging conservation market, and the ways to tap that market. What they do after that is their business, literally. We do know that a small number have added conservation values to their advertising, and in some cases report an improvement in sales. For example, one property, which had been on an agent's books for some months, sold the same weekend that the presence of a rare and endangered sedge on the property was included in the advertisement. Because of publicity about the scheme, a number of potential buyers have made contact, and been referred onto agents or, in some cases, to conservation minded sellers.

Bush Bank

There is also a recognised need for a market based organisation that can target the higher conservation priority properties, particularly where there is an urgent need for conservation ownership to remove a threat to conservation vales.

The National Trust (WA), the WA Landcare Trust, the World Wide Fund for Nature, and the Department of Conservation and Land Management are cooperating to establish a revolving fund in Western Australia. It is expected that funding arrangements for this will be announced at the "Taking care of the bush" forum.

The core functions of Bush Bank will include:

bushland purchase;
conservation covenanting and provision of management advice and assistance through existing covenanting schemes;
sale of bushland once strong legal protection is in place;
attracting "top-up" funding through tax deductible bequests, grants of land etc.

This fund is known as Bush Bank, and is a special purpose body financially administered and managed under the auspices of the National Trust, on behalf of all partners. A Board of influential people with an independent Chairman is being established to provide leadership of the Fund, and a Technical Advisory Panel is being established to provide advice on priorities for land trading.

Bush Bank would aim to benefit both land and bio-diversity conservation. Purchases will reflect agreed conservation priorities, but with consideration of the need for the properties to have strong re-sale prospects.

While further planning and dialogue is needed, Bush Bank will be well placed to complement the other market place based initiatives already in place in WA.

Conclusion

The market place is a fundamental driver of what happens to our landscapes, and we can influence both supply and demand in order to provide benefits for bushland conservation and rural economies. In WA the real estate and valuation industries are open to cooperative partnerships that are economically and environmentally sensible.

Bush Brokers may already be having some positive impact on the market for bushland. It is certainly helping the property industry and the landcare and biodiversity sectors have a better understanding of each others values and needs.

Attachment 1: Some characteristics of the market for bushland

Who purchases bush?

At this point in time purchasers of bushland are most likely to fall into the following broad categories.

The uninformed: buying land that happens to have bush on it. Many people are still purchasing bush because it is cheaper than cleared land, or the block is situated where they want to purchase land, and they are seemingly unaware that it cannot be cleared for other uses. The sale of property to people who do not fully understand the values of bushland and the implications of purchasing bushland should be avoided.

Lifestyle purchaser: Evidencing minimal or secondary commitment to conservation of bushland, with defined purchasing criteria allied to "pleasant surroundings" as a base for the family home or weekender.

Lifestyle purchaser: Evidencing a strong commitment to conservation of bushland. Primarily seeking a significant piece of bushland and incorporating involvement in management. Potentially either a permanent or a "weekend" resident. Often people from nearby towns.

Strong conservation purchaser: Main purpose is to preserve, and will generally visit the block on a regular basis and provide conservation management as required to the best of their abilities. Some of these will be groups, either of friends, or a specific issue body such as a local landcare group.

Business investment purchaser: Evidencing support of conservation values with expectations of an income stream from an enterprise that is compatible with conserving bushland. Examples include seed and flower collectors, "eco" chalets and parties conserving bushland on a larger property with investment and/or possible tax benefits. It can also include the farmer next door.

Who sells bush?

The main vendors of bushland are considered to fall within the following categories:

Uncommitted Vendor: A property owner who wants to sell property but does not have an interest in its future. Some may even be hostile to conservation.

Committed Vendor wanting a conservation outcome. A number of vendors have a genuine bond with bushland and their decision to sell is influenced by their desire to see the bush maintained in perpetuity. They will prefer a "conservation committed" purchaser, and will often only sell to one. An increasing number covenant their land before the sale.

Committed Vendor seeking special conditions: Some vendors of bushland are concerned that new owners will be irresponsible managers in a way that affects their remaining holding (poor rabbit control, fire risk etc). A vendor may be able to place management conditions on the land prior to sale. However, mostly they endeavour to sell their bushland in the first instance to a compatible party, in recognition that they have little or no control over the following sale of the land.

Some related issues

The majority of sales will occur for land with its own title, or where sub-division is being sought or obtained. Some bushland is part of a larger holding and will have to be sub-divided into a smaller location before settlement. In most instances vendors will initiate subdivision application. However, this also occurs following as a result of direct approaches to the vendor by a prospective purchaser, and some times the purchaser makes the arrangements that enable subdivision.

The extent to which purchasers want cleared land involved in the title may vary from "preferably none at all" to "happy to have a reasonable proportion of the property as cleared land".

Pastoral leases purchased for conservation purposes require the consent of the Minister for Lands with advice taken from the Pastoral Board. In all cases transfers are considered upon their merits and discussions with the Board's representative should occur before purchase is contemplated.

Group mechanisms

A small number of the documented purchases made by people with strong conservation motives are made on a group basis enhancing parties with a common interest to purchase and manage land together. It can also provide both long term protection, and a more durable management regime.

Examples of group purchases are as follows:

Incorporated Associations that form especially for the purpose (ie Lake Mealup Protection Society)
Groups that purchase bushland to help achieve their primary conservation objective (ie Corrigin Land Conservation District Committee)
Companies formed especially for the purpose (ie Goodale Sanctuary Pty Ltd)
A dedicated conservation foundation or Trust (ie Paruna Sanctuaries)
A simple business partnership (ie Mt. Gibson prior to the recent sale)
Survey strata title (ie Rosneath, Cordingup South).

Media release and Response to the Report and Recommendations of the Native Vegetation Working Group, WA Minister for Primary Industry, October 12, 2000
Final Report of the Native Vegetation Working Group, Government of Western Australia, January 2000, p17.
What now for bush blocks and saline areas? South Coast Regional Initiative Planning Team workshop held in Albany, WA on 17 May 1999.
WA Planning Commission Policy No DC 3.4
WA Planning Commission (January 2001) Interim revision to Development Control Policy 3.4 Rural Land Use Planning related to Subdivision for Conservation. WAPC Planning Bulletin No 48.
WA Planning Commission Bulletin No. 14 (May 1996)