Imagine it’s 2040. You’re sitting on your thirty acres in northern Vermont enjoying a rare (and pricey) cup o’ Joe (you use three acres to produce most of the food and energy for your family, plus a little extra, which affords you an occasional coffee). You’ve got good neighbors, well-built houses, and good community infrastructure. The clime has been tough, but you’re very well situated (this is my vision at the moment, substitute your desired location and set up). Gazing out over the mountains, a deep breath mixes the fresh mountain air with a waft of Ethiopian arabica. You’re relaxed and happy.

Then you notice something similar to this little fella:

And just a few short years later, many of your trees are dead.

Sounds crazy? A bit far-fetched? That harmless looking little bug is the now-infamous pine beetle. Warm winter weather has allowed it to flourish in the Rockies. As of 2017, it had singlehandedly decimated a whopping 3.7 million acres of pines just in Colorado alone. If you’re struggling to visualize 3.7 million acres (I certainly did), it’s nearly 6% of Colorado’s land mass. And if you can’t visualize that, imagine a swath of trees larger than Lebanon, now imagine them all dead.

That’s probably just the tip of the iceberg for what we should reasonably expect. As global warming ramps up, the number of invasive and destructive guests with whom we can expect to share our lives will likely spike. In a lot of cases we won’t be able to see them; they’ll be bacteria, viruses, and other small or microscopic critters. In some cases, like that of the Pine Beetle, we’ll be able to put a face to the destruction. In some areas the damaging species won’t be invasive, they’ll just have lost the predator that kept them in check, so they’ll pillage without opposition. Most of the time we should expect that these problems will be unmanageable, and cascading: The loss of a tree population might lead to increased erosion, then flooding, loss of resources, and additional ecosystem imbalances. If the damage is widespread enough it could even change your microclimate, maybe even the regional climate. Trees will take decades to regrow, and when they return they may be of entirely different species.

There are also less apocalyptic reasons to be concerned. I’ve been monitoring land prices in northern New England for several years and I’ve noticed often significant discrepancies between asking prices of recently-timbered lots and asks for similar lots with relatively old stands. The price differentials seem to more than cover the net value of the more mature timber. If you’ve ever walked alone in forest among hundred- or several hundred-year-old trees, you’ve probably experienced thoughts and feelings that are, at least using my words, uncapturable. You get it though, you understand the price premium that such woods command. And that’s exactly what would make the loss to your land all the more gut wrenching. It’s more than just monetary.

No one can predict where the next pine beetle-type disaster will pop up. The web is too complicated, the variables too numerous, the shifts too uncertain. Having some good luck is a prerequisite for success in the clime ahead. What if there was also a way to decrease your ecological risk, decreasing your need for luck?

If you buy one nice property in an area you expect to do well, then your need for luck amidst all this coming chaos is still going to be pretty high. If, instead, you opted for three or four smaller lots dispersed over a number of regions you expect to do well, E.g., the Ozarks, Maine, Wisconsin, and Alaska, then you’ve reduced your risk and, given that most absentee landowner actions can be done online (E.g., paying taxes), you’ve likely only marginally increased your administrative burden. As a plus, property scouting trips to each of those places might be fun! If you combine this portfolio approach with smaller investment in your physical home (still high quality materials and well-built, just a smaller footprint—E.g., 1000-1500 sq. ft. rather than 4000+ sq. ft.), then you won’t lose as much should your ecosystem sour. Better, if your home is tiny and mobile, then you can pick up and go to one of your healthier properties.

I suppose the irony of climate change is that it’s forcing us to be adaptive and flexible in response to increased uncertainty, risk, and volatile weather; so success is liable to be defined by tiny, light, and diversified; whereas in the most stable climate we’ll ever see, where we could have easily worked within nature’s predictable seasons, highs, lows, last average frost date, etc.—instead we decided to build monstrously big, heavy, and we ended up with unnatural places like Phoenix and Las Vegas. Neither of which should be in your land portfolio.

2 Thoughts on “Minimizing Luck’s Role in Success by Building a Land Portfolio”

  • I agree with the land trust analysis…bigger is not better. If the age-old saw about diversifying your investment portfolio is accurate, then its application to real estate in the climate-affected future will probably also hold true. And Wendy touches on very viable solutions – ecological solutions can well accomplish what we can not on a large scale. Not easy solutions, but better than sitting on our hands.

  • Dear Climer, I can tell you value trees more than Bill Nordhaus ever did, in fact he has vastly underestimated the value of ecosystems in his calculations of the ‘costs of climate change’.. Please consider ecological solutions to promote and attract bird populations to feed on pine beetles to keep them in check, we need mobile woodpecker breeding stations! Failing that the sterile insect technique using irradiated or genetically modified pine beetles (see Oxitec) and other technological solutions are ecologically safe although costly. Please tell Jared Polis and Suzanne Jones all this when you are next over and remind them to get moving before their state becomes an alpine desert – WR

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