Land prices surge as foreign investors buy up farmland, real estate

On a wide river bend, just outside of Jensen, Utah, bright fields of green alfalfa break up the buff of the rolling Colorado Plateau.

The 3,297-acre Escalante Ranch sits just downstream of Dinosaur National Monument on the Green River — the biggest tributary of the Colorado River, which brings water to 40 million people. Keep moving downriver past the hamlet of Jensen and you’ll run through checkerboarded Bureau of Land Management land, where private companies are drilling for oil and gas. Eventually, you’ll hit the Uintah and Ouray Reservation, where members of different bands of Utes were pushed in the 1800s. As of the 2000 census, the population of the reservation was 19,182 people.

This all was once vast swaths of Ute territory. The Escalante Ranch, which has been in operation for more than a century, has prime water rights, and in 2011, Chinese investors bought it for about $10 million. Now the owner offers guided hunting trips, which ranch manager Frank Biggs says is a part of how he manages the wildlife and ecosystem. They also grow alfalfa, some of which is exported back to the growing Chinese dairy industry.

Biggs, who has worked the ranch for 19 years, says the operation isn’t much different than when the previous owner, a businessman from Tennessee, was in charge. But he says he gets much more acrimony, including hate mail, for working for a foreign owner.

This case at the Escalante Ranch isn’t a unique one. It’s a glimpse of the tension built in a generations-long fight over American ground.

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There’s been a recent surge in foreign investment in American land. Between 2009 and 2019 the amount of farmland owned by non-U.S. entities grew 60%, according to data from the U.S. Department of Agriculture. And similar trends are happening across urban landscapes, where foreign buyers are investing heavily in single-family rental homes.

That increase of foreign investment in both agricultural land and housing has kicked off a wave of policy to try to curb global investments. In July, the U.S. House passed an agriculture appropriations bill that included an amendment introduced by Washington Republican Rep. Dan Newhouse blocking agricultural purchases by companies affiliated with the Chinese government.

But other legislators have argued that the bills are racist. Foreign investments are just one indication of how land ownership is changing, and how those changes impact the economy and the environment. The other factor — the broader one that encapsulates the international purchases — is that nonlocal, large companies are buying land across the country and consolidating ownership of private land.

The reason foreign investors own Escalante Ranch is the same reason Bill Gates, who has acquired 269,000 acres of land in 18 states, is now the largest private farmland owner in the country. It’s related to the ways tribes have been pushed off their historic territory. It’s why urban rents have skyrocketed, why food costs are rising and why Salt Lake City home prices are 30% higher than they were just a year ago.

Land is a limited, nonrenewable resource — a fixed asset — and in the U.S. we have it good.

“The first thing to recognize is that the U.S. has a globally significant supply of farmland,” says David Haight, vice president of programs at the American Farmland Trust, a nonprofit based in Washington, D.C., that looks at land use, access and policy. “If you look around the planet, about 10% of the arable land is in the U.S., and that matters for the food we consume in this country and what we export, as well as how that land is cared for when it comes to things like climate change and wildlife.”

Haight says 40% of farmland is no longer owned by farmers and is instead owned by nonlocal investors like Gates. And residential real estate is increasingly owned by financial firms like asset manager Blackrock and investment firm Blackstone, which look at land as a direct investment.

The USDA tracks ownership, meaning agricultural land can serve as a canary in the coal mine for changes in use for land across America — because it’s not just agricultural land that is changing hands. According to a Wall Street Journal report, corporate investors bought 15% of U.S. homes for sale in the first quarter of 2021. That consolidation and outside interest is happening across sectors.

Land is deeply tied to the accumulation of wealth and political power. When, say, a foreign investor buys up a large swath of quality farmland, local or small owners have a hard time buying in.

So how did we get here, where land ownership — and the ability to thrive that comes with it — is going to the highest bidder while ecosystems, small towns and historically marginalized groups bear the brunt?

Whose West is it, anyway?

America has been obsessed with land ownership since before the states were united. As a fledgling country, we basically broke away from the British over land ownership. And in the western U.S. — including the slice of eastern Utah where the Escalante Ranch sits — a combination of colonialism, manifest destiny, desirability and resource economics shaped how land was allocated, and to whom.

After the Revolutionary War, Congress passed the Land Ordinance of 1784. Over the next 100 years, the U.S. would claim 1.5 billion acres of Indigenous lands. The federal government began mapping the West and cutting it up into one-mile-square sections — which were used to create a taxable property system, and to establish state boundaries. The squares were designated as an alternating patchwork of public and private sections, which became a defining feature of the western U.S.

In Utah alone, there are 116,000 acres of locked-up public land today, and that’s just a fraction of the fragmentation created during expansion. Across the country, there are currently more than 16 million acres of public lands that are still inaccessible.

Photo by: Wolfgang Kaehler/Avalon/Universal Images Group via Getty Images

In 1862, Congress passed the Homestead Act. This allowed citizens to claim 160 acres of public domain land if they maintained their claim for five years, codifying the act of manifest destiny. It was implicitly a move to get white Americans to move out across the frontier, but Jedediah Rodgers, a senior historian at the Utah Division of State History, says that Utah, because of its rugged, dry terrain and lack of water, was passed over by many homesteaders. Latter-day Saint settlers claimed much of the lush river valleys, but the mountains and desert plateaus were considered too harsh.

“It seems really important that much of Utah was not necessarily seen as habitable or was not considered desirable places,” he says. “There’s always been a hierarchy of what land is valuable and how it serves humans.”

The perceived value of that land changed and grew over time as outdoor recreation became part of popular culture. For instance, Robert Redford bought Sundance in 1969, based on desirability. And all the while, public land was getting sliced off for national parks, forests and monuments, a process that started in 1872 when Congress designated Yellowstone.

The map solidified and the expansion era stopped in 1976, when the Federal Land Policy and Management Act mandated the permanent federal ownership of public lands that weren’t already claimed by individuals or states or designated by the government. It tasked the Bureau of Land Management with managing all the land that people hadn’t wanted — the acres deemed too rugged, dry or inaccessible to be settled. Because of that, 64% of Utah is federal public land (in the country as a whole, it’s about 28%), and another 10% is owned by the state. Less than a quarter is privately owned.

Land ownership is a limited asset, one that can be incredibly powerful. Historically the people who could own land were the ones with the social and financial capital to work within the system, and that’s carried through.

Through the middle of the 20th century, homeownership and land accumulation grew, and it accelerated in the post-World War II era. U.S. urban areas have more than quadrupled in size since 1945. And across the country 2,000 acres are converted every single day.

But in 2008, as the recession hit and nearly 10 million people lost their homes in the subprime mortgage crisis, investment groups and wealthy individuals who could carry the risk moved in. Since then, according to The Land Report magazine, the amount of land owned by the 100 largest private landowners has grown to an area larger than the state of Florida.

“We’re in a massive moment of land transition,” says Holly Rippon-Butler, who published a report about land use, policy and power in 2020. She says it’s a storm of unchecked commodification and problematic historic patterns.

Nationally, prime farmland is being consolidated and converted, the average age of farmers and landowners is going up, and young people can’t afford to buy in. COVID-19 has pushed people out of already dense places. Remote work means privileged people can buy land wherever they want and we can’t undo how we rip up land and alter ecosystems.

“We have a private property commodity relationship with land shored up by policy and reinforced by the real estate market,” she says.

And when asset appreciation is the underlying value of land use, instead of stewardship or production, problematic consequences start to arise. For instance,…