My wife and I own a proxy for forested acreage in Maine and New Brunswick through our shares in Acadian Timber (TSX: ADN, OTC: ACAZF). If you read my last post (from nearly a year ago, sorry☹️), it’s probably no surprise that land in Vermont is our latest and most exciting addition to that portfolio. Why? What did we think about? (And, what were we thinking!?)

It gets chilly up there. As I’m writing it’s 16°F colder than in my hometown in the mid-Atlantic Commonwealth of Virginia, and northern Vermont averages 10-12°F cooler at any given point in the year. Our property is less than 40 miles south of the Canadian border, and average night time temperatures fall into the mid 50s during the peak of summer – so make sure you’ve packed a sweater and extra blankets.

The property has an attractive mix of fields, woodland, wetland, ponds, and like many parts of the Green Mountain State, nice views of green mountains. We fell in love with it the first time we walked it. I don’t discount that emotion: humans evolved over many millennia to find particular topographical features attractive for survival. It’s definitely a relevant data point, but our analysis didn’t end there.

We considered broad climate threats to the state and county, localized climate threats to our town and property, and non-climate factors.

Broad climate threats to the state and our county:

• Wildfires and Drought – A feature of Vermont is its lush, green foliage. No parts of the state suffer regular water stress and precipitation is expected to increase in the coming years. The problem is that the region expects increasing intensity of rain followed by longer periods without rain. This might be partially managed through increased investment in anti-erosion controls, drainage, rainwater catchment, and irrigation. Wildfire may pose a temporary threat in rare cases of prolonged drought, but the threat probably won’t be significant (and it won’t be like California). Last year Vermont had the second lowest percentage of its forested acres burned by wildfire of any state (the lowest was Delaware, which recorded no wildfires in 2019).

• Inland flooding – Flooding is a downside of saturation, especially when paired with shallow bedrock and lots of towns built in narrow river valleys. It’s proven a major problem for Vermont and it will continue to pose a serious threat as long as businesses and residents remain in flood zones. The state has made some small efforts to relocate folks from the most vulnerable places, but progress is expectedly slow.

• Impacts of sea level rise (heightened storm surges, salinization of aquifers, land loss, ecosystem change) — Vermont has no direct coastal exposure and even Lake Champlain, the lowest place in the state, sits nearly 100 feet above sea level. For perspective, an extreme scenario model predicts eight feet of sea level rise by 2100. Eight feet spells complete disaster for unprotected coastal communities. For Vermont? It’s not a direct threat.

• Excessive heat – While human comfort shouldn’t be a problem there for a very long time, the state’s ecosystems will likely become more stressed. Ecosystem stress is generally expected to increase as you move farther north due to higher relative warming as you get closer to the poles (E.g., some parts of Alaska might see 3°F of warming for every 1°F experienced in Texas).

• General indicator: Climate Resiliency Screening Index (CRSI) – the EPA ranks the climate resilience of our county among the top 1 – 3% of all counties in U.S., with Vermont ranked 4^th among U.S. states. By comparison, the climate resilience of my home county in Virginia is ranked in the bottom 9% of U.S. counties, and Virginia is ranked 36^th overall among states.

Local climate-related considerations:

• Flooding – Our property is relatively high for the area and it benefits from gently sloping topography. Its road and trail access points are also numerous and mostly well-drained. At the town level, unlike many towns in the state, ours didn’t suffer extensive flood damage from hurricane Irene. Fortunately, its drainage is very good.

• Landslides – Our topography makes this a very low risk, and it’s a low risk for our town.

• Sinkholes – Karst topography (thanks to my geologist friend for awareness!) indicates water soluble bedrock such as limestone and gypsum. Karst typically becomes less stable as groundwater circulates through, increasing the likelihood of producing sinkholes. Although this threat should increase with additional precipitation, our town has no Karst topography, so we should be in the clear.

• Wind damage – a portion of our property is designated on National Renewable Energy Laboratory maps as productive for small to mid-sized wind turbines. Higher winds from increasingly powerful storms may eventually become an issue, but we plan to factor this into all building decisions.

• Diversity of trees, ecosystem health – our land is home to a variety of species of deciduous and conifer trees. It also has seemingly healthy wetlands and several wild ponds. Dragonflies, which we spotted several times near one of the ponds, are a great indicator of overall ecological health.

• Water availability – We have ponds, wetlands, and a spring on the property. Check!

Non-climate considerations:

• Anchor town — We’re well within 30 driving minutes of a town with a hospital and grocery, hardware, lumber, and equipment stores. Dedicated bike trails will also get us right into the center of town (and we’re eager to explore this option!). We also considered whether the town is generally on an upward or downward trajectory. I.e., It’s great that it has what we need now, but are those amenities likely to exist in ten years? If our anchor town suffers hard times, it might decrease our property value and make errands more onerous. We looked at a number of factors, and one of note was that businesses actually relocated to our anchor town from other parts of Vermont after Irene, partially because it escaped unscathed. Why wasn’t it hit hard? Was this just a random fluke? Not entirely—although spared from Irene’s heaviest downpours, most of the town also sits 20-30’ above the river. The bigger factor though is that it’s immediately upstream of a dam that releases water 40’ into well-drained waters below. Unlike less favorably-situated towns, widespread flood damage should never be a problem.

• Potential for generation of food, electricity, and heat – our property has enough USDA Prime-designated crop land to feed our entire family, even under lower yield scenarios (and agricultural yields are actually expected to rise due to longer growing seasons). It offers a good residential wind power resource and ample space for solar power generation. We also have lots and lots of hardwood trees to fuel wood stoves, if needed. I haven’t looked much into geothermal resources, mainly because the bedrock is only ~12 – 24” deep and our frost line (the deepest point where ground water will freeze) is 70”. That’s pretty deep in comparison to our 24″-deep frost line in Virginia. A closed-loop system probably isn’t economical but an open loop system (tapping into well water) may be possible. I digress, geothermal potential had zero bearing on our decision.

• Access — Getting to the property, and then getting to the places where we want to be on the property, were major considerations. A bit of background: Vermont categorizes its roads into classes 1-4. Class 1 designates a state-maintained highway (paved, plowed… think nice, smooth, well-maintained road). Class 2 includes high-priority town roads, still mostly nice and well-maintained. Class 3 is defined as “negotiable under normal conditions all seasons of the year by a standard manufactured pleasure car,” and these are mostly unpaved but largely free of ruts and holes that would stop a Prius. Class 4 is literally defined as “all town highways that are not class 1, 2, or 3 town highways.” Some Class 4 roads are privately maintained to the point of being Prius-passable, while others would challenge a lifted 4×4, and yet others would stop a tank—just because it wouldn’t be able to plow through all the trees (some mapped Class 4 “roads” are actually indistinguishable from the woods they run through). Our property’s driveway begins at the end of a town-maintained Class 3 road. This means that during winter the town will plow right to the edge of our driveway. Another route onto our property is along a Class 4 road that hasn’t been maintained in decades, but because it’s mostly flat it should be 4×4 passable after a long afternoon with a chainsaw. In addition to the driveway and the Class 4 road, there are also other trails that could get us onto the property in a pinch. From the main entrance of our property we have ¼ mile of relatively flat driveway to where we plan to build a small cabin. This certainly creates a seasonal snow plowing obligation, but I’d rather deal with distance than steep grade. Washouts can be particularly expensive, but even general maintenance on steep driveways can add significantly to the property’s carrying cost. In the most extreme case I’ve seen, I walked a property for sale that would likely cost owners ~$10k/yr just to maintain the driveway. Carrying costs, in this case ongoing maintenance costs, can kill returns on otherwise good investments. I’ve been verbose because access issues are that important.

• Taxes – Looking to reduce another carrying cost, Vermont has a Use Value Appraisal program that enables owners of parcels that are at least 27 acres and meet other criteria to have their taxes assessed at “use value,” which is roughly $150/acre for forested land and $350/acre for agricultural land. This most often leads to an assessment that is far below market value, and typically saves the owner bundles over time. In return, the state gets a lien on the enrolled portion of the property which restricts many development activities and requires the landowner to follow a forest management plan (which the state gives landowners a lot of leeway in creating). We think the program makes sense for us, our land meets the basic criteria (we could even subdivide it a number of times and the remaining portions would still meet the minimum criteria, which is something we considered) and so we’re in the midst of creating a forest management plan and enrolling. One of the most exciting things about this, for me, is working with the consulting forester to create the forest management plan. The plans are basically written reports about the land and recommendations for management, and they’re often illuminating. They might be better called “All the good/bad/interesting things you didn’t know about your property.”

• Perc and soil testing – We had a contractor do a perc test for us before we bought. It told us that if we choose to build a full-time home where we’ll most likely want it, we’ll probably need to construct a septic mound. While this isn’t ideal, it’s really not unusual in Vermont (90% of properties don’t get approved for conventional wastewater systems). We also sent soil samples to UVM for analysis just to ensure that there weren’t toxins or heavy metal contaminants in our fields.

• Ancient roads – Vermont is peculiar in that, until recently, it has given legal recognition to any road that was once put on a map. It doesn’t matter how old, unused, impassible, or even unrecognizable that road might be—if it was mapped, it was a public route. This understandably created problems for landowners, title search companies, and recreationists. In reaction, Vermont passed a law in 2006 that gave towns until 2010 to identify any ancient roads and add them to their maps. Anything not added to the state map by 2015 was considered discontinued. Problem solved!? Sort of, although not really. In our case, we have several of these “ancient roads” going through our property that the town has elected to keep on the books. One of the roads goes nowhere and passes through state- and federally-recognized wetlands, so I have no concerns about it ever being used (increasingly stringent environmental regulations have made wetlands nearly impossible to develop or pass through, especially where there’s a practical alternative). The other road actually goes someplace, and there might someday be significant traffic on it if it were ever opened. Its exact location on our property has been contentious. Some maps say one thing, others say something else. All told, there are three possibilities for where the road might be. Before closing we got the town to formally agree with our interpretation of the road’s location and we got at least the acquiescence of our neighbors. Whether the town permit would survive formal surveying or other future kerfuffles is tough to know, but we felt comfortable moving forward.

• Neighbors and zoning – Do adjacent landowners use their properties for objectionable purposes, and can we do what we want to do with our property? We don’t have asbestos mines or RV parks abutting our property, and I think they’d be prohibited under current zoning restrictions. We’re also allowed to do what we hope to do under current zoning rules. I carefully read the zoning code and I secured a building permit before buying.

• Is it a property or area where we see ourselves wanting to visit? Either answer can be fine depending on the rationale for investment. In our case, we expected it would be a place we’d want to return to year after year. We just spent a glorious week there and already miss it. The outlook looks good.

Our Process:

Finding the right property and securing all the tests and permits necessary to comfortably move forward, especially from 10+ car-hours away, required a lot of effort and expense. Although details of every land search will vary, some general process notes and perspective might be helpful.

Vermont was once just a waypoint for us on a road trip. Neither my wife nor I vacationed there growing up, we can’t recall ever traveling there as adults, we didn’t know anyone there, or even anyone from there, and the afternoon we passed through it was truly dismal, offering us only a cold drizzle and a thick fog that obscured what would otherwise be some of the most pleasant views in the world. Although unfamiliar and seemingly uninviting, after doing a bit of then-cursory climate research and reading several articles about the place (also, Google Image searches, if you really want to get sucked in), I suggested that we plan a dedicated trip to familiarize ourselves and give it another chance. This hatched what became one of our best-ever trips, covering the state north to south, from Burlington to Brattleboro. As my wife commented one starry summer night on a farm in rural Westford, “Vermont has seduced us.” At that point I probably would have recommended just throwing a dart at a map of the state and buying property wherever it landed. We were in love.

Of course we’ve headed back numerous times since. On each trip we’ve tried to stay at AirBnbs with designated “superhosts” willing to chat about their area, and most have provided heaps of valuable information. As our familiarity grew we began looking at listings on Zillow, Landwatch, Preferred Properties, Fountains Land, etc. In the beginning it was difficult to physically find many of the listed properties and even more challenging to determine property lines. Some of our earliest and least-informed expeditions involved walking portions of properties that weren’t for sale, struggling to get our car up rough, unpaved Class 4 roads, hearing our then-puppy happily bound through a pond that we didn’t know was right next to us, etc. Each was an adventure and a learning experience, and I wouldn’t give any of them up. We eventually streamlined our search processes and found tools that greatly improved our understanding of the listings, many times to the point where we could outright dismiss what would have previously been enticing listings—without ever setting foot on the properties. A big contributor in refining our searches was VCGI’s Interactive Map Viewer, which is maintained by the state and offered to all for free. Interestingly, we first heard about this tool while chatting with one of the most unusual of bakers at Rainbow Sweets in Marshfield, VT, a bakery (and experience) I highly recommend if you’re in the area. We talked with everyone—AirBnb Hosts, general store clerks, welcome center attendants, random people on the street. We used the time in the car (the tons of time we’ve spent in the car) to listen to as many Vermont Public Radio podcasts as possible. I became a regular consumer of Vermont news and I devoured countless articles on its economy. I looked at electoral maps, income demographics, crime reports, town websites, satellite imagery, we attended a town’s 4^th of July parade, and I even studied the state’s electric generation and transmission systems. Still, this list really just scratches the surface. At this point I know far more about the particularities of counties and select towns in Vermont than I do about most areas of my home state of Virginia.

I’d obviously no longer tell anyone to throw a dart at a map. There are many parts of the state that wouldn’t fit our investment criteria, and several places I outright don’t care for. That’s what happens anytime you really get to know something though, you just might discover it’s not all covered bridges and Grade A maple syrup. Its rivers occasionally swell and become destructive, some towns are a factory closure away from economic collapse, others are just too remote, while others check every box and carry a price tag to match. Some communities feel stronger and closer-knit than others. It’s not a fantasy land. People actually live there, and sometimes they have competing priorities and they’re just trying to eke out a living along with everyone else. Along the way though, maybe they keep their properties looking just a tad nicer than similarly situated folk in other parts of the country. Maybe they’re kinder. Our blissful naivety is gone, we’re definitely more discriminating than we once were, but there’s still, just, something.

I love Vermont because of her hills and valleys, her scenery and invigorating climate, but most of all, because of her indomitable people. They are a race of pioneers who have almost beggared themselves to serve others. If the spirit of liberty should vanish in other parts of the union and support of our institutions should languish, it could all be replenished from the generous store held by the people of this brave little state of Vermont.

– Calvin Coolidge, 1921