Rick Theriault- Your Maine Real Estate Guide is an expert in living the Maine lifestyle. Here at his homestead in Northern Maine he talks about converting the ornamental plant life around his home from nice to look at, to functional crop bearing options such as blueberries, raspberries, fruit trees and more. Not only are these plants nice to look at, they produce a significant harvest in a smaller amount of space than you might think!
Relocating a new group of bees after a swarm. Cool stuff shown by Rick Theriault- Your Maine Real Estate Guide
Rick Theriault- Your Maine Real Estate Guide is back with another update on his honey bees. After a long winter its time for them to get out, stretch their wings and cleanse their tiny bodies. In the next few weeks they should start feeding on the same maple trees he has been making his maple syrup
I am writing this post from the Realtors Land Institute National Land Conference in Albuquerque NM. This annual conference is attended by about 500 of the top land agents across America. During the three-day conference we network with other land professionals and attend lectures by national economists, political analysts, scientists and other experts speaking on a wide array of topics related to land use and sales.
Economist Dr. Mark Dotzour shared his opinion that the US economy will continue to do well in the coming year. His analysis of current trends and historical data do not point towards a looming recession, as some of the national media have been touting. His advice to shut off your CNN and Fox News feed, which he feels is pure propaganda, was well received by attendees. Indicators such as a consumer confidence index at an 18-year high, a 3.5% wage increase nationwide in 2018, over 7 million open jobs in the US, low oil prices and low interest rates should keep the national land market up for 2019. Expect interest rates to creep up a little bit this year. The fed will look to make some room to drop rates when the next recession comes. At the current rates there is not much room to drop
A land use gaining momentum in the western and southeastern US, which I believe will become a larger niche market in Maine, is “glamping”. Glamping is roughly defined as glamourous camping utilizing extravagant canvas tents, tree houses, and other unique structures. Cost per night stays range from $100 to more than $300. I spoke to several western ALC’s whose clients have purchased property to develop this niche business. Be careful investing in this in heavily regulated areas of the state, Colorado towns have started to zone the use out as undesirable.
By 2020 the millennials will become the nation’s largest demographic. Many in this group are saddled with a lot of debt and are still living at home, however, about 19% of them live in their own home. Millennials are beginning to consider land as an investment that doubles for recreation. I have personally sold land in the past year to this group. They do not have the knowledge about land investing that was more common in Gen Xers passed on by their baby boomer parents, but they are intelligent buyers eager to learn more about the investment side of land. Expect to see more Maine land purchased by this group in 2019.
The hot topic in land this year is industrial hemp because the new farm bill legalized the growing of cannabis plants containing less than .3% THC. This level is where the federal governments differentiates between marijuana and hemp. CBD oil derived from hemp is the most profitable product to date. CDB oil has not been approved by the FDA, however consumers believe it relieves a host of ailments, including insomnia, anxiety, chronic pain and post-traumatic stress disorder.
Agricultural economist Dr. Terry Barr, spoke about a wide variety of topics. Top of his list is China’s slowing growth to about 6%. Overall worldwide growth rates are also slowing, with most increases in growth now coming from unadvanced countries. A strengthening US dollar taking buying power away from other countries will mean that US commodities will not do as well. He expects that US economy to grow more moderately than it has historically. New housing is being built strictly on demand as most spec builders are gone after the last big recession. He expects that residential housing markets will remain steady as they go.
Despite predictions of slowing world growth, at our brokerage we have seen an increase in the number of requests for winter land showings and contracts written over the previous winter. Overall Maine land sales have slowed a little but most of that I believe is due to overall lower inventories of parcels. The hunting and recreational market is strong. We have many buyers looking for cabins and homes on 40+ acres. There has also been a high demand for agricultural properties. Timberland interest has also picked up. If you are considering a sale of your land give us a call to see what the current market values are in your area.
Before you purchase that lake, ocean or river front land, home or cabin in Maine, you should know a little about shoreland zoning rules. This includes all area within 250 feet of the normal high water mark of the water feature. Knowing the basic rules will help you better select a property that meets your expectations.
As Mainers, we often take good water quality for granted. It is well protected here, but that is not the case in every state. Recognizing the value of water quality to fish, wildlife and us humans, the state adopted shoreland rules with beginnings in the 1970’s that continue to be updated today. The reasons for mandatory shoreland zoning are many, including such goals as preventing water pollution, protecting wildlife habitat, and conserving the scenic beauty of our special places to name a few.
The rules do depend on where the property is located, either organized or unorganized township. Also, what property type you are going purchase, such as an unimproved waterfront parcel or an existing residential structure. Also, please note that every organized town can have slightly different rules depending on the ordinance they have adopted, but all will comply with the minimum requirements. Check in the code enforcement officer (CEO) of the town to get the local ordinance.
For unimproved lots, here are the basics.
- Minimum Lot Size – For tidal areas 30,000 square feet ( just less than 7/10 of an acre) For non-tidal areas 40,000 square feet (just over 9/10 of an acre)
- Minimum Water Frontage – For tidal areas 150 feet For non-tidal areas 200 feet
- Minimum Lot Width – within 100 feet of the high water mark shall be equal to or greater that the required water frontage.
- Minimum Set Back for buildings – For great ponds and rivers flowing to great ponds 100 feet from the high water mark. For other water bodies, 75 feet from the normal high water mark.
- Vegetative Clearings – This is a probably the most misunderstood of all shoreland rules. Review the ordinance for formulas to use prior to any harvesting of trees and/or other vegetation and do consult with the CEO prior to beginning to avoid possible fines and other penalties.
If you are purchasing a non-conforming ( AKA “grandfathered”) structure the rules for additions, expansions and other changes can vary a lot depending on the size, setback, height and other features of the structure. All of these changes will at a minimum require CEO approval, commonly planning board approval.
There are many exceptions to the above. This can be a complex topic, so I have provided a link to the Maine Department of Environmental guidelines here should you need additional information.
Maine Subdivision Rules - Should You Develop Your land?
In Maine, there is a difference between a division of land and a subdivision of land. In most municipalities dividing your property into two separate lots requires little or no permitting. However, dividing a property into 3 separate lots within a 5-year period does require approval in most cases, and is the definition of “subdivision” in our state.
Increased Property Value
Why would you want to do a subdivision? Most property investors look at the subdivision process as a way to increase the per acre value of their property. At first the thought of a smaller lot being worth more does not make sense, but consider that by reducing the size of the acreage you bring the gross selling price lower and within the purchasing power of more people. More people competing for a property usually translates to more demand and a higher price.
Higher prices may or may not translate into more profits. Before jumping headfirst into a subdivision some research and planning should be undertaken. Market conditions should be the first consideration. Data such as recent comparable lot sales, how many sales have occurred, lot sizes of successful sales, what is the current supply of lots, absorption rates, and financing availability to name a few. Next what will be the costs of surveying, wetland delineation, engineering, road construction, soil testing and other requirements of permitting? After thorough analysis and due diligence a property owner can decide if the risk is worth the reward to subdivide.
Every organized town in Maine may have a slightly different subdivision ordinance. The unorganized territories in Maine have a uniform ordinance with little variation in requirements. Typically, a local planning board will review a proposed subdivision to see if it conforms with the ordinance. The process will consist of several meetings starting with a presentation of a preliminary sketch of the proposal. This is followed up with notifications to the public and nearby property owners of the proposed subdivision and the date of the public meeting to review it.
This next hearing consists of a more formal presentation of a preliminary survey plan of the layout of the proposed lots, roads, easements, slopes, soils etc. Public comment is permitted and heard by the board. After this meeting any changes required by the board need to be addressed and another hearing with a final plan will be scheduled. Assuming no other issues are outstanding, the board will sign the final plan that will be recorded in the county registry of deeds.
There are a number of exceptions to the rule to sell property without the process of subdivision. Gifts to relatives (see definition in statute) may be exempt if the donor has owned the property for at least 5 years and the consideration is less than ½ the current assessed value. Sales to abutting property owners may be exempt from subdivision rules. In unorganized territories, 3 lots can be created in a 5-year period as long as the 3rd lot is retained for forest management purposes. This is often referred to as the ‘2 in 5 Rule.’ There are other exceptions listed in the statute linked above.
This post is intended to encourage a thoughtful process in land investing and should not be viewed as an endorsement to subdivide your property. In many cases I would advise clients not to. The above descriptions are a simplification of the process, not a complete outline of all potential requirements of every planning board. You are well advised to consult with experienced professionals like real estate attorneys, surveyors, soil scientist, and land brokers before undertaking the subdivision process.
Maine has four current use programs to reduce taxes on land that is used primarily for a specific purpose. The four programs are tree growth, open space, farmland, and working waterfront. The following is a brief explanation of each program with links to guide you to more detailed information.
Tree Growth Tax Law
The most commonly used current use tax program in Maine is the Tree Growth tax program. It may also be one of the most misunderstood. The basis of the program is to assess land of 10 or more acres based on its productive use as commercial timberland. Growing and harvesting must be the primary use.
During 2017, Maine’s Tree Growth tax program came under the scrutiny of the governor’s office as did most
property tax reductions. It is believed, and probably rightly so, that a significant percentage of the properties enrolled in this program may not be in compliance with the law. In order to be in compliance, your forest management plan needs to be up to date and implemented. If you have purchased forestland in Maine and you have never talked with a licensed forester you may already be out of compliance. Bulletin 19 on the state website provides information for those already in the program and those considering enrolling. The link below is bulletin 19
Farmland Tax Law
This tax law requires the land to be used for agricultural or horticultural purposes and must be of 5 or more contiguous acres. The land must earn at least $2,000 gross income per year to
qualify. The owner must file an income statement with the assessor by April 1 of each fifth year, after qualification, for the previous 5 years income of the owner or lessee.
The assessor can use a number of factors to determine farmland values for current use
including farmer to farmer sales, soil types, land rents, and others. For additional information on this tax law see Bulletin 20 link
Open Space Tax Law
This program provides for a reduced assessed value based on the property being preserved or
restricted for a public benefit. Qualifying public benefits include recreation, scenic resources, game management and wildlife habitat. The open space program does not have a minimum
acreage requirement. In open space the tax assessor will reduce the value by either researching sale data of parcels all or partially in conservation or preservation and computing a fair value, or by applying a percentage reduction based on the public benefit or benefits being applied. The reduction, depending on the benefit, can be as high as 95% of the assessed value. See Bulletin 21 at this link.
Land that qualifies for this current use tax treatment is for land on tidal waters or in the
intertidal zone used at least 50% for access or support of commercial fishing activities.
The assessed value reduction varies from 10%, 20% or 30% depending on the percentage of use and potential deed restrictions for use. See all the details on the state site for Working Waterfront Q&A at: https://www.maine.gov/revenue/forms/property/pubs/workingwaterq&a.htm
If you desire to change the use of your property under any of the first three laws above you can avoid any penalty for that change of use. Property changed from farmland to open space, farmland to tree growth, open space to farmland, or open space to tree growth will not be
penalized if a parcel also meets eligibility requirements of the new classification.
More and more people are awakening to the realization that the current system of living and providing food for our population is a tenuous and fragile system. The demise of honey bee populations may be a visible sign of how our current monoculture mega farming techniques are not the best methods for a healthy eco system. They are inherently dependent on large applications of petro-chemicals to produce yields of crops that are shipped vast distances on trucks to consumers that are thousands of miles away from their food source. Bees are trucked thousands of miles and then placed in a virtual food desert where all they see for miles and miles is 1 type of plant on which to gather nectar and pollen. Imagine how healthy you would be eating only oatmeal 3 times a day, for a month or more. Regular yes, healthy no!
Permaculture is a growing trend not only herein the U.S., but worldwide. Pioneers in this field like Geoff Lawton of Australia have been instrumental in teaching and developing and applying the developing principles of Permaculture throughout the world. Through applications of reshaping and forming the land to enhance and utilize its contours, you can develop a method of conserving and utilizing water that eliminated the needs to use pumps for irrigation. Permaculture strives to mimic the diversity found in a forest, where man is not required to annually apply fertilizer and spray trees with pesticides in order for a forest to grow. Left to its own designs a forest will grow without man doing anything.
Permaculture farming strives to develop a sustainable and robust food forest system that once established will grow and improve without man continually applying petroleum based fertilizers or pesticides. The living food forest will, over time, improve the water table, improve the soil fertility and allow a diverse array of food crops to grow together better and healthier than they do individually. One of the tenants of Permaculture that really appeals to me is the fact that during feudal times, the only people that had lawns were the monarchs. Peasants farmed what land they had to feed themselves. Monarchs as an outward display of opulence could afford to use farmland for nothing more than growing grass. On a small scale worldwide people are turning back and front yards from barren lawns to nutrient rich food forests where they can pick fresh fruits, nuts, berries and more and eat it right off the vine in their own yards, and never have to cut the grass again.
There are many good books on the subject of Permaculture. I've read Practical Permaculture by Jessi Bloom & Dave Boehnlein as well as The Resilient Farm and Homestead by Ben Falk. Ben's book details his homestead from the land purchase to building the home on a plot of undesirable land in Vermont. He through the application of Permaculture techniques is even able to grow rice on his property in Vermont for his families use. There are numerous websites and YouTube videos on the topic; in short Permaculture creates a more sustainable food source and lifestyle on our planet. What's not to like about that?
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