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Ever since the end of the last recession, wealthier Americans such as the Nathansons have been moving to small, recreation-focused communities across the West, according to a recent report from the nonprofit organization Headwaters Economics. The influx of new money is transforming once-sleepy logging or ranching towns in ways that are both good and bad — revitalizing communities but driving housing costs beyond what’s affordable for many residents.

“Who is benefiting from these booms in recreation communities?” asked Megan Lawson, an economist at Headwaters and author of the study. “Who is not?”

The report found that since the Great Recession rural and semi-rural Western counties with a lot of recreation opportunities — hiking, biking, snowmobiling and skiing — have grown while rural counties without those amenities continue to shrink.

The Mountain West is home to huge swaths of public land. A new web-based tool is now showing people exactly where that land is and which agency is managing it.

“In general, the more public land a county has, the more growth in per capita income, employment and population,” Ray Rasker says.

In urban counties, public lands offer unique recreation opportunities, something Rasker says offers economic benefits. But, urban areas aren’t the only ones to see these positives, he says.

“You have other communities that are very rural and very isolated, and the role that public lands play in those places might be less about recreation and wilderness, and there might be more related to grazing or resource extraction,” he says.

“It’s not all about timber production anymore,” said Mark Haggerty, a researcher at Headwaters Economics who focuses on rural counties and their relationship with federal public lands and local economic development trends.

Haggerty spends much of his time comparing U. S. Forest Service Timber Cut and Sold Reports with Gross Receipts from Commercial Activities. “The first thing to point out on gross receipts is that this revenue earned by the Forest Service for activities on public lands. That’s what becomes the basis for the revenue-sharing payments back to local governments,” Haggerty said.

Haggerty supports of a different approach to addressing the challenges of county payments from commercial activity revenue: creation of a National Resources Trust. The trust would stabilize payment and eliminate the challenge of annual appropriations through Congressional budgeting.

The trust “gets to the idea of using resources to generate wealth. And you can think about wealth in a variety of different ways, not just in the way of creating annual receipts to fund local governments. It could, in theory, if it were to pass, create a real opportunity for communities and federal land managers to work together to re-think the way we’re valuing public land resources, timing extractions, considering market prices, all of that,” Haggerty said.

“You can throw firefighters at the problem as a defensive measure all day long, but the way to solve this problem is through land-use and building codes,” said Doug Green, fire safety manager with the Sister-Camp Sherman Fire District.

Through a coordinated team of land-use planners, foresters, economists and wildfire risk modelers, CPAW, funded by the U.S. Forest Service, integrates land-use planning with fire management to help communities draft a customized plan to reduce wildfire dangers.

A new report found that towns near plenty of outdoor recreation attract new residents and higher incomes. But this could also mean higher costs of living, affordable housing challenges, and encroachment into vulnerable landscapes.

“We already knew that having outdoor recreation nearby brings tourists to your community,” says Megan Lawson, an economist at Headwaters and author of the study. “But what we didn’t have great information on was whether that tourist and those amenities translate into people actually wanting to move to and live in these communities.”

“Outdoor recreation is being seen as a legitimate economic development strategy,” says Lawson. “It’s not just ski bums and dirt bags any more that are the face of an outdoor recreation economy. It’s the entrepreneurs that are moving to a community, bringing their families and their businesses.”

“It’s important to recognize that recreation is not a silver bullet for every place. It’s not the case where you build a trail, people will come, the rivers will flow with milk and honey and all of our problems will be solved. It’s one option in the toolbox. But for some places, it might be a good fit.”

Across the West, as development expands into this interface… it is a kind of ticking firebomb.

Almost half of new homes built in the U.S. are in this interface where development meets highly combustible vegetation….

Retrofitting may be costly, but building new homes to be wildfire-resistant can significantly reduce loss, says Kelly Pohl with Headwaters Economics, a nonprofit land management research group. A study by the group shows the cost is not prohibitive.

Montana lawmakers have chosen a study of state and local tax policy as their top priority during the 18 months before the 2021 legislative session.

Headwaters Economics, a research firm, suggested the state’s tax structure is not generating revenue in areas where the economy is growing, such as the service sector and investment income. Instead, it relies on declining revenues from oil, gas, mineral and timber production. Commerce also is increasingly taking place online and the state is not levying taxes on sales made by out-of-state companies, officials have noted.

Montana lawmakers will take a comprehensive look at state and local tax policy over the next two years. Legislators say a changing economy and increasing population means Montana should consider new ways of collecting taxes…

According to a report presented to state lawmakers last year by Bozeman based Headwaters Economics, “Montana likely is not taxing the economy where it is growing.”

The Headwaters report says that when it comes to jobs and income, Montana is transitioning from producing goods to providing services.

Across the country, the outdoor recreation industry puts millions of people to work and boosts the economy by hundreds of billions of dollars… But do recreation amenities lure new residents — who might bring even more economic benefits — as well as tourists? To find out, Headwaters Economics, a nonprofit research group, looked at where populations have grown or dwindled since 2010. They compared counties where the economy is closely tied to entertainment and seasonal visitors’ spending, or “recreation counties,” to counties with economies driven by other factors.

The federal government should do more to encourage wildfire-prone communities to plan for blazes that can’t be entirely prevented, a land management consultant told lawmakers yesterday.

“I think we should reward good land-use planning where it exists,” said Ray Rasker, president of Headwaters Economics, a Montana land management and research group, at a House Natural Resources subcommittee hearing.

Rasker, called by the Democratic majority to testify on wildfire-resistant communities, said measures such as defensible space around homes and fire-resistant construction often make the difference for homes that survive wildfire, an unavoidable feature of Western landscapes.

Those measures are more important than ever, he said, because of increased development in the wildland-urban interface. From 1990 to 2010, a total of 43% new homes were built in the WUI, and more than a third of U.S. homes are on those lands, Rasker said.

But the message hasn’t fully reached local officials, and wildfire-oriented land-use planning isn’t emphasized in college and university programs, Rasker said.

One result: Planners haven’t been exposed to wildfire issues, and fire agencies in wildfire-prone communities haven’t been exposed much to land-use planning.

“They need help getting that done,” Rasker said, responding to questions from Rep. Deb Haaland (D-N.M.), chairwoman of the Subcommittee on National Parks, Forests and Public Lands.

After the apocalyptic Camp Fire reduced most of Paradise to ashes last November, a clear pattern emerged.

Fifty-one percent of the 350 houses built after 2008 escaped damage, according to an analysis by McClatchy. Yet only 18 percent of the 12,100 houses built before 2008 did.

What made the difference? Building codes.

…Unfortunately, short-term thinking can triumph over common sense. Cities facing severe fire risks can avoid compliance with the fire-resistant building codes, or choose to avoid their obvious advantages, despite the fact that “a new home built to wild-fire-resistant codes can be constructed for roughly the same cost as a typical home,” according to a report by Headwaters Economics.

Nevertheless, experts say, McClatchy’s analysis reinforces their belief that California’s fire-safe building code can make a difference in an era of increasing vulnerability. Daniel Gorham, a former firefighter and U.S. Forest Service researcher who works for the Insurance Institute for Business & Home Safety in South Carolina, said the California code is becoming a model for other fire-prone states.

“California is leaps and bounds ahead of other parts of the country,” Gorham said. “California is on the forefront.”

Advocates say fire-resistant building materials aren’t particularly expensive. A study last fall by Headwater Economics, a consulting firm in Bozeman, Mont., found that “a new home built to wildfire-resistant codes can be constructed for roughly the same cost as a typical home.”

As U.S. economic growth in the past decade assumed an increasingly urban character, that diverse set of strengths enabled this town to defy a pervasive narrative of rural decline. Hamilton’s population of 4,728 is up more than 10 percent since 2010, reflecting a Western renaissance that contrasts with the experience of small towns in other regions.

“It’s a pretty sweet spot to be in,” said economist Ray Rasker, of Headwaters Economics in Bozeman, Mont. “You can have the same job you’d have in Seattle and go fly-fishing in the afternoon. . . . It’s the quality of life. It attracts talent. Pretty soon, talent builds on itself, and word gets out.”

…Nationwide, since the recession’s end, people have been more likely to move to counties with opportunities for outdoor activities than those without them, according to a January study by Headwaters Economics.

“Recreation may make the difference between gaining or losing population, particularly in rural counties,” the study found.

Engineers designed and built a full-size duplex home. On one side, the house has cedar siding, vinyl gutters, single-pane windows and bark mulch around the foundation. On the other side, the house is designed to be fire-resistant, with cement siding, metal gutters, double-pane windows and gravel around the foundation.

“We’ve used construction materials and building practices that we have found through our research, and others’ research, makes a building resistant to wildfire exposure,” explains fire engineer Daniel Gorham, who helped design and carry out the fire test. For example, a 5-foot zone around the fire-resistant side of the house is devoid of combustible material, including plants.

… A 2018 report by Headwaters Economics, a Montana-based group that studies land management, found it costs about the same amount to build a new fire-resistant house as it does to build a typical house with cedar siding.

Across the western U.S., towns surrounded by public lands are facing an increasing bind: They’re seeing a huge surge in visitors coming to play in the forests and mountains surrounding them, which is leading to an economic boom. But, at the same time, federal funding to manage these lands has been drying up.

“There are these dramatic increases in recreational uses of public lands, and at the same time dramatic declines in recreational budgets,” says Megan Lawson, a researcher at the Montana-based think tank Headwaters Economics.

A recent analysis by the group showed that visitation to U.S. Forest Service and Bureau of Land Management land has risen by about 15 percent over the last decade, while budgets for programs that support recreation in those agencies has fallen by a similar amount.

According to Headwaters, since 2010, the Bureau of Land Management’s recreation budget has fallen by 18 percent, or $14 million. The Forest Service’s recreation budget has fallen by 16 percent or $49 million in the same time period.

“We’re recruiting talent that could go to Boston, New York, L.A.,” said Ray Rasker, executive editor of Bozeman, Montana-based Headwaters Economics and a consultant for the BEA. “The surrounding public land is the ace in the hole. If you come here, you can go fly fishing after work, or ride your mountain bike.”

…For western states, where most federal land is concentrated, national parks and forests are a key economic driver. One study by Headwaters Economics found that, from 1970 to 2015, counties with the most federal land saw faster population growth, and higher growth in incomes and jobs, than counties with the least. National parks alone added $20.3 billion to the U.S. GDP in 2017—a 28 percent increase from 2012, according to the National Park Service.

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…Headwaters Economics, a Bozeman, Mont.-based independent, nonprofit research group, contends in a blog post on its website this week that logging and other “timber management” can be justified in some areas, “but it rarely helps our communities confront looming wildfire disasters in the face of a warming climate and continued home building on fire-prone lands.”

“Better land use planning and improved design of our built environment is our best bet at reducing risk from wildfires,” writes Kelly Pohl, a researcher at Headwaters who specializes in land use planning and wildfire.

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Zellner’s experience underscores what economists and civic boosters alike say is a key piece of the economic development puzzle in rural Montana communities: The access that well-connected airports give residents to the rest of the world.

“In spite of the Internet access, we still need to see each other face-to-face,” said Ray Rasker, executive director of Headwaters Economics in Bozeman. “And that’s what airports represent.”

….“If I was king of Montana and I wanted to do something useful in eastern Montana, I would put a big airport there,” said Rasker, who has published research arguing that air access to major urban centers explains much of the difference between rural counties in the American West that have performed well in economic terms and those that have struggled in recent decades.

Rasker and his co-authors say that amenities like public lands make many places in the rural West attractive destinations for knowledge-based workers — people like the Zellners — but that airport access is often a limiting factor.

Their analysis found that Western counties closer to airports with several commercial flights a day generally had higher per-capita incomes and more diverse economies. In contrast to more isolated rural areas, they said, those “connected” rural counties were behaving in economic terms more like cities.

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Mark Haggerty, an independent researcher with Headwaters Economics, said that the forest trust proposed in the bill addresses a systematic problem with the current arrangement.

“Rural communities with natural resource economies are especially vulnerable, both to volatility in markets and uncertainty of policy coming from Washington, D.C.,” Haggerty said. “This bill, and the trust concept in general, is a piece of a much bigger effort to help rural communities capture the wealth they generate in the economy, whether that be from forest products, agriculture, recreation or manufacturing.”

Haggerty described how such a forest trust could work in a report for Headwaters. According to the report, county payments totaling $750 million were made to nearly 2,000 local governments in 2018 in 52 U.S. states and territories. Included in that total are Payment in Lieu of Taxes (PILT), the Secure Rural Schools and Community Self-Determination Act (SRS) and National Wildlife Refuge Revenue Sharing Payments (RRS).

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A few relatively simple, affordable modifications to a home’s roof, walls, windows, deck, and landscaping can be the difference between the home’s survival and loss during a wildfire. For example, survivability of a home increases when it is constructed using ember-resistant, finer mesh in attic vents, noncombustible gutters, fire-resistant decking, and when a noncombustible landscaping zone is maintained in a five-foot area immediately around the home.

Where homes are spaced closer together, additional strategies become necessary to avoid home-to-home ignition, such as using noncombustible siding and tempered glass windows.

A study released last month by Headwaters Economics found the cost of constructing a home to such standards in Park County was roughly the same as a typical home. Using wildfire-resistant materials and design techniques have added benefits such as reduced maintenance and longer lifespans.

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