Recreational Homes’ Impact on Agricultural Land Use

Charles Towe and Zhenshan Chen

Abstract

When non-residents purchase agricultural properties, the land use decision can make farmland operate below potential, still allowing for tax credits. We empirically investigate how non-resident ownership affects the agricultural land-use decisions in upstate New York. A difference-indifference matching approach shows a causal link between purchases by non-residents and a loss of 11% of acreage to a lower-productivity use. A generalization shows this conversion counts for one-seventh of the decreased agricultural land in intensive uses in similar counties. Perhaps a simple opportunistic use of the tax-credit criteria, this phenomenon contradicts the policy’s objective and might impose other consequences on rural communities.

Keywords:JEL

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