Why land is still a great investment in Southwest Washington

Regional community members have a lot to consider while becoming educated on land use issues

Agricultural land is something quite personal for me. Both sets of my grandparents were raised on farms and ranches in the Midwest (I’m not a redneck, I promise). I’m also quite fortunate to have inherited a good chunk of the land that my grandfather used to farm, so land is a subject I’m passionate about and has an impact on my life. In fact, my company’s name, Rock House Properties, was named due to an old 1875 limestone farm house that still stands on my family land today.

While becoming educated on land issues in Washington, specifically Southwest Washington, we have a lot to consider. Smaller family farms being sold to larger ag companies, what crops will bear the best return per acre (more on that later) and the housing shortage/crisis are all at the forefront of landowners’ minds as long-term planning is considered for their legacies.

Where do we start with all the considerations with land issues in Washington? First, let’s look at where we are. Here’s a few facts regarding our land in Washington:

Water rights are no longer being given by the state, making them extremely valuable.

Washington apple growers produce six out of every 10 apples consumed in the United States.

Grapes only use 18 inches of water per year, compared to corn, which needs 32 inches of water.

Land use is not a new issue.

With water rights no longer being given out by the state of Washington, farming is still quite profitable – provided the farmer owns the water rights. This gives the owner the ability to look at more permanent crops like grapes and apples, which give a much higher return per dollar. As a result, Washington has had a decline in wheat, pea and corn ground from many farmers who are going after long-term contracts with wine companies. These longer-term crops and contracts are able to provide better for farmers’ retirements and their heirs.

Washington still continues to be known for apple production. With apples being a “permanent” crop compared to a product that has to be planted each year, farmers still see a good yield in the apple market.

When my clients hear I love the topic of land use, one of the questions I get is, “why are there so many wineries popping up these days?” As you read above, a key reason is rate of return for the land owner. The less water it takes to produce a good crop equates to profit. Add to that wine production companies looking to partner with growers with long-term contract incentives, and you have a recipe for a great number of profitable wineries.

An article written in a local newspaper in March of 2017 states, ‘“Loss of good farming land serious problem,”’ reads the headline of an October 1971 article in The Columbian that described how rapid development was encroaching on farmland. Other headlines, such as ‘Farmers fight development’ and ‘Does agriculture have a future in Clark County?’ also appeared in Columbian issues of that era.”

As you can see, land use and the continuing debate have been around a long time in our area. It was a hot issue in 1971 and will continue to be long after this article has been published. Land sales in the last 24 months are also on the rise, with 879 total units being sold in Clark County alone since June 2016. With the limited supply in land inventory, however, a similar effect is being felt as with the residential market.

So, where does this leave land use in Clark County? It leaves us in a place that some might not like. Development is the most profitable use of land in Clark County, as of the time of this writing. Yes, farming in Washington is still profitable, if done correctly. However, due to the housing shortage and our proximity to the booming population of Portland, many builders are looking to Clark County development to help alleviate housing constraints. For the foreseeable future, expect to see more new development from local and national builders.

The good news for those who aren’t thrilled about new construction growth? I know a lot of the builders and they are good people. The vast majority truly care about our area and want to see well-constructed communities that can be enjoyed for a long time.

Mike Tanner is the CEO and co-founder of Rock House Properties, a licensed Realtor in the state of Washington, and has lived in Southwest Washington for 15 years. He can be reached at mike@rockhouse-properties.com or (360) 281-2787.