Wisconsin may soon allow foreign investors to purchase large parcels of land here. For more than 100 years, the state has limited foreign interests from owning more than 640 acres. However, Governor Walker’s proposed budget removes the cap, including for corporations. The Wisconsin Realtors Association asked for the change, according to spokesman Thomas Larson.
“Wisconsin’s law has been on the books since the 1800s. It prohibits foreign investors from owning 640 acres in total. Not 640 acres that are continuous, but 640 acres that can be in different bits and pieces throughout the state,” Larson says.
Larson says as it is, there are exceptions to the law. For instance, the U.S. and about 150 other countries signed a trade pact in the 1990s, promising not to treat foreign investors differently than their own. Plus, Larson adds…
“If you are going to be purchasing land for railroads, for mining, for petroleum, for mercantile purposes and there are several others, then you’re exempt from the law as well,” Larson says.
Besides, Larson says the state doesn’t really enforce the law, so why not change it.
“It just creates confusion,” Larson says.
According to a USDA report from 2010, the amount of land foreigner investors own in Wisconsin is small – about 121,000 acres. That’s about .3 percent of the state’s land mass. The country whose citizens own the most here is Denmark.
Larson says if Wisconsin changes its law, he does not expect a sudden onslaught of foreign buyers lining up.
John Peck isn’t so sure.
“We just see it as part of ongoing sort of global land grabbing that’s happening,” Peck says.
Peck is executive director of a group called Family Farm Defenders.
“Land is a limited asset and actually has a higher rate of return than the S&P 500 over the last decade, decade and a half. So a lot of investors and footloose capital are looking for something to get a good return on. Unfortunately, thanks to centuries of stewardship in this state, our natural resource base is now looking like a really lucrative investment option for people, and that’s why they’re drooling over getting access to our resources,” Peck says.
Resources could include timber or lakefront land. Democratic state Senator Kathleen Vinehout says she’s worried about farmland. She says its value has been soaring across the Midwest, and encouraging more foreign and corporate buyers could further boost demand, pricing out citizens interested in farming.
“Right now, the biggest barrier to farmers getting started is land purchase,” Vinehout says.
The proposed budget item would not allow foreigners or corporations to farm the purchased land, but it would come off the market.
Vinehout is also among the legislators who don’t think the item should be included in the state budget.