We just decided to nix a promising piece of land this week. Unfortunately the restrictions put in place on the plots required that a “committee” decide whether your house plans were acceptable, whether you could build other buildings on the land (e.g. a barn or shed), and so on. We don’t want to have our life governed by a busy-body committee of neighbors more interested in having a suburban HOA in the country than in actually doing something useful with land.
The prices for this land, about 30 miles outside of Austin, hover around $10,000 per acre. Now, these are hay fields we’re talking about. An old farmer dies and the urban children sell the land off after getting it surveyed into 5 – 10 acre plots. Hay isn’t that profitable. It varies widely depending on the location and water and demand and a hundred other factors, but let’s say generously someone could make $500 per acre just growing and cutting and selling hay. We’re pay $10,000 per acre. Meaning, twenty years worth of profit.
A farmer could put that $10,000 in bonds, make 5% interest, and come out with $500 per year just sitting and doing nothing! Why go to the time and expense and labor of making hay when the stock market will pay you just as much?
But my point is that the price of the land has no proportionality to how much could actually be made off it with hay. The prices are high ($10K/acre to $30K/acre) because the Austin area is booming and people are moving here in droves.
The sad thing is, a ton of land sits in monoculture crops all around the area. Thousands upon thousands of acres of cotton, corn, and wheat surround us. It isn’t that profitable for the farmers, but it’s all they know how to do. They’re locked into the system and cannot imagine using the land for, say, a CSA growing produce, or pastured poultry, or grass-fed beef. Or selling it to a young family who wants to make a homestead with a dairy cow, a small flock of sheep, some chickens, and a big garden.
So what we’ve seen is unrestricted land that isn’t quite what we want and restricted land that is too restricted to be useful for us. We are almost to the point of cold-calling some of the monocrop farmers and saying: “Hey, we’ll give you $10k/acre for those five acres of land. Twenty years worth of profits for you and you only lose five acres out of the thousand you own. And you help out a young family who wants to do something good with the land.” How hard can this be?