Cabin User Fee Fairness Act of 2000
In the CUFFA documents we are referred to as “cabin owners” or as “permittees.” CUFFA refers to us as cabin owners. The Forest Service regulations call our cabins “recreation residences” and we are “holders” of permits. Each cabin has a “special use permit” that allows its presence on a lot in a national forest. Special use permits are not leases; leases have property rights that permits do not. These differences are at the core of the complexities in setting a fair permit fee based on an appraisal of the lot underlying a cabin.
Summer homes on National Forest Lands were first authorized by Congress in 1897, though such permits were limited to annual permits with a minimum fee of $5 per year. In 1915, Congress passed the Term Permit Act which authorized the Forest Service to issue cabin special use permits with terms up to 30 years at an increased minimum annual fee of ten dollars per year. Fees for the permits remained stable for many years, although they gradually crept up over time, and were based on a flat fee applicable to all cabins.
In 1955, Congress directed the Forest Service to obtain fees for use of federal land based upon the fair market value of the land. In 1969, the Chief of the Forest Service decided that the annual fee would be set at 5% of the value of the lot as determined by appraisals conducted every 5 years. But in the early 1980s, argument began over the manner in which the appraisals were to be performed. Congress got involved, and in 1983 summer home permit fees were frozen pending resolution of the dispute.
In 1985, a “Chief’s Committee” comprised of cabin owners and Forest Service staff was formed to develop a new policy for cabins. After much work, a new Recreation Residence Policy set forth a new set of regulations published in August 1988, formalizing the fee at 5% of the value of the lot underlying the cabin. The lot was to be valued in its original state, without any structures on it. Appraisals of typical lots within cabin tracts were to be done every 20 years and, between appraisals, an annual adjustment was to be applied to keep the fees tracking closely to changes in the market value of the lot. This new policy, by the way, formally changed cabins from being “summer homes” to their current designation as “recreation residences.”
Appraisals beginning in 1995 saw the first application of the appraisal procedures in the 1994 Policy. It didn’t take long for problems to crop up, including:
1. Inappropriate Comparable Sales
Sales of actual lots of privately owned land, known as “fee simple” land, were supposed to be used to establish the value of cabin lots. In practice, such sales – true comparable sales, known as “comps” – were difficult to find. The 1994 Policy called for the appraisal of the bare lot without adjustment for “improvements furnished by the holders,” but finding sales of bare fee simple land of a type similar to cabin lots was difficult in many areas of the country. Thus, improved properties were often used, and the sale price was adjusted to take those improvements into consideration. This led to the use of comparable sales that USFS and many cabin owners believe were not truly comparable. The matter was complicated further when the cabin tracts were described as being similar to subdivisions, so some appraisers used subdivided land, trying with limited success to back out infrastructure costs that did not exist on the cabin lot. Problem comparables included the use of sale lots from urban and resort areas. Either no adjustments or insufficient adjustments were made to distinguish the value of the resort lot from our remote lot with limitations on cabin construction. Cabin tracts were in no way similar to development in that resort area, but limitations on the size, condition, and appearance of the recreation residence cabins were often ignored in making adjustments. This “neighborhood effect” recognizes that a property in one neighborhood will often be valued quite differently from an otherwise similar property in a different neighborhood. In typical appraisal literature, this is based on, among other things, size, shape, view, flood risk, access, surrounding uses, affluence, available schools and utilities. If a significant adjustment is not made for different values due to the neighborhood type, then the resulting value of the cabin lot is inaccurately high. A specific problem arose in the choice of comparables within any area designated by the Federal Government as a “conservation easement” or a “recreation area”. Once the conservation easement or recreation area designation is made, further development within the area becomes severely limited, causing the values of lots still available inside the area to skyrocket. This led to extremely high values placed on lots within modest cabin tracts because the supply of the comparable lots was capped.
2. Adjustments to Value: Local and Regional Rules and Remoteness Considerations
Another way to approach the adjustments to a sale price of an unimproved lot was to consider the effect on the market value of all the restrictions in use of the lots. These vary from tract to tract, but it is common to see limits on size and number of structures, and restrictions on use of the rest of the lot. At that time, the response of the Forest Service was that such restrictions were already factored into the fee since it was set at what they believed was a low amount, 5%, of the appraised value, rather than a higher rate — 8 to 15% — that the Forest Service claimed was found on rentals in the private ownership market.
Some adjustments to value were also requested to back out the cost of cabin owner provided utilities. In those cases, when the adjustment was allowed, it was often not sufficient. Risk factors (not finding water or running into a large boulder) and added costs for the location’s remoteness (equipment move-in fees and material delivery costs are higher) were not always considered. Requests for adjustments such for conditions such as these were disallowed by the Forest Service.
3. Appraisal of the Site Versus the Lot
In some places, cabin lots were being appraised as if the lot extended beyond its platted boundaries. Lots that had a strip dedicated to public use separating them from a lake were valued as lake-front property, as if the strip did not exist. This approach allowed for appraisals to include off-site amenities and improvements over which the permittee had no authority or rights beyond those of the general public. Many permittees argued that this was not consistent with the current rules. [Ultimately, the USFS agreed and proposed that the rules be changed to call for the appraisal of a “site” rather than a “lot.”]
In the mid-1990’s, as results began to trickle in from the first appraisals done under the new rules, cabin owners became concerned. Fees were inconsistent. Some were acceptable, but some were not. Some annual fees were to be raised to $20,000-$30,000 in Idaho and California, and $34,000-$36,000 in Washington State. Fee increases of $5,000 a year were not uncommon. This huge jump from prior fees was quite shocking to the cabin owners and threatened the concept of the program as affordable to the average family.
In response to the problems encountered in current appraisals, a coalition of cabin owner groups, including NFH, was formed to evaluate the problems and to attempt to find a better way to carry out the required appraisals. Congress helped out, with a series of relief bills holding off the imposition of fees in various locations until a comprehensive resolution could be achieved.
After protracted negotiation between the Forest Service, the cabin owners and the Senate on the language of the bill, the Cabin User Fee Fairness Act ( “CUFFA”) was passed and signed into law in October of 2000. A copy of CUFFA is available online at the NFH website at nationalforesthomeowners.org . This new law now directs the current process for the determination of a cabin’s annual special use fee.
- CUFFA Aims for a Fair Fee.
- It’s the Lot, Not the Site.
- Adjustments to Value Are Explicitly Listed.
- Appraisals are to be performed every 10 years.
- Focus on:
- Location –
- use limitations
- Location –
Mary Roja, Executive Director, National Forest Homeowner: 1-800-669-9971 or email@example.com
Kim Brower, USFS Senior Auditor: 858-674-2965 or firstname.lastname@example.org
Schedule [original schedule provided by the USFS – as of June 2011 mailings have not been received]
Bids for Appraisers: June 2007 >>> 30 Day Notice: May 2008 >>> Appraisals: June, July , August 2008 >>> USFS Review: Winter 2008-9 >>> Mailings: Spring 2009 [NOTE: as of June 2011the USFS Review is still underway]