The concept of highest and best use is most used by developers and appraisers. A developer will tell you that when a property is economically ready to be improved to a more productive use, it’s time for him to step in. An appraiser will tell you that a property’s highest value is based upon the most productive use allowed.
In wildlife conservation, highest and best use can lead to conversion of habitat to rural uses that eliminate or water down habitat quality. Farming, ranching and timber production can be compatible with wildlife habitat or even beneficial in some cases, but as urbanization occurs these wildlife-compatible rural uses are converted.
Further from town, low intensity ranching and public and private forest lands provide habitat where hunting added to the value of the land. Traditionally, hunting has been a huge contributor to maintaining wildlife habitat through game producing habitat manipulation that benefited other species including those that have become endangered or threatened.
However, hunting, ranching and rural living cannot protect land from development as the rule of highest and best use concept applies, meaning that a higher use creates more value and a pressure on the landowner to convert for capital gain.
Now it’s the 21st Century and in comes the Endangered Species Act (ESA) and new mitigation principles. Through the laws associated with the ESA, Federal Agencies (ACE & USFWS) and some state agencies (CDFG) have set up standards for habitat mitigation where permits are required before major capital projects can proceed. This mitigation commonly related to road construction and water projects.
When “listed” species (those which have high status in the endangered pecking order) are affected, developments must provide mitigation to offset the negative impact the project will have to the subject species.
Mitigation typically occurs on rural lands where the same listed species dwell. These rural lands can be protected in perpetuity and managed specifically for the listed species. When an agreement is signed deeding certain rights from the landowner to the agencies and it is then recorded against the property. In return for protecting the species so the developer can receive a permit to commence the project, the landowner receives cash.
The point of the discussion is that this process has created a new highest and best use for undeveloped land and an entirely new set of values for rural land in California. Not only that, but this highest and best use principle has created a new type of wildlife conservation – highest and best use conservation.
Rural landowners can now leave their land in open space, while managing their land for endangered species, and also protecting their property values. (Hunting is often a compatible use as well, but not always.) In many cases, the value of California wildlife habitat as a land use is now competitive with all rural and many suburban uses. In other words the ESA is protecting property values far beyond those properties that are currently participating as mitigation sites.