When Robert Laibovitz retired six years ago, he had plenty of work to do. A greenhorn ranch owner at the age of 55, Laibovitz had 300 acres of undeveloped land to clear near the town of Vanderpool, a house to build, and a well to dig. After 20 years of fantasizing about owning land, he was thrilled to leave his practice as an eye surgeon and immerse himself in the great open spaces of the Texas Hill Country, a swath of land that stretches west of Austin for 150 miles: "It would have been cheaper and more convenient if I had joined a country club instead of buying my ranch. But this is something I always wanted to do. I'm more passionate today than the first day I bought my land."
Laibovitz isn't the only one living out the dream of being a rancher--at least, a rancher of sorts. For eight years, newcomers have been snapping up land all over Texas, but nowhere near as fast as in central Texas. In the process, they're changing a way of life that has long been central to the Lone Star state's self image.
The Hill Country land rush is so strong that the U.S. economic downturn hasn't put much of a crimp in it yet. Some real estate brokers report that their sales of intermediate properties, those selling for between $500,000 and $1.5 million, have slowed markedly in the past couple of months, while trophy properties at $5 million and above are still moving fast. Others say the rural land market has eased regardless of the price. "Business has definitely not been booming. My sales volume is down about 20%," says Bob Morand, a broker in Kerrville. And one can only guess how the tragedies in New York and Washington will ultimately affect the national economy--and thus the Hill Country.
The typical buyer certainly has changed in the wake of the downturn. A year ago, high-tech executives from Austin were flocking to snap up ranches, but now many of the shoppers are oil-and-gas types, supplementing other businesspeople who have always been attracted to the ranches as places to hunt, raise a family, or simply get away for the weekend. Among these is President George W. Bush, who bought a 1,600-acre ranch in central Texas in 1999.
One reason city slickers are eager to purchase their own land is that, in this second-largest state in the union, there isn't enough access to open space. Texas doesn't have an extensive state or federal park system: About 97% of the state is held privately, compared with 10% in Nevada, so if folks want to commune with nature, they have to buy some of their own. "This yearning to have a private place, to feel less crowded, motivates a lot of Texans to go after their own ranch, whether it's 4, 40, or 400 acres," says Skip Shumpes, a former West Texas rancher who now works as a real estate broker in Boerne.
But these wealthy new owners are transforming the Hill Country--building mansions, importing exotic game, and erecting 12-foot-high fences on land where cattle used to roam. As sleepy towns fill with sport-utility vehicles and espresso bars and property prices soar, many ranchers who have been on the land for generations are coming under heavy pressure to sell out. Call it the gentrification of the Hill Country, bringing with it all the problems the process usually causes for longtime inhabitants.
Of course, upscale ranchers aren't the sole cause of the change in the Hill Country. Over the past decade, the area's population rose by 60%, according to the 2000 census, as people flocked into new subdivisions and ranchettes. Fueling that population surge have been the nearby cities of Austin and San Antonio, ranked among the fastest-growing regions in the nation. Austin, now the state's fourth-largest city, grew by 41% in the 1990s, to 657,000 people, while San Antonio, up by 22%, now houses 1.1 million. In the past 40 years, the overall population of the Hill Country has mushroomed 228%, outpacing the 160% growth in all Texas--itself almost triple the U.S. growth rate.
The combination of suburban development and wealthy would-be ranchers has naturally run up land prices, from $800 to $2,000 an acre a decade ago to $6,000 to $10,000 today. "In 1991, I could show you 100 good ranches under $1 million, but now I can't show anything," says real estate broker Trip duPerier in Kerrville. "I'd be real lucky if I could find anything for $3 million now."
Realtors like duPerier say they have more qualified buyers ready to pay $1 million to $4 million in cash for a ranch than they have properties to show. A decade ago, a $1 million ranch sale was considered out of the ordinary, but now only deals of $5 million to $8 million are considered large. Texas Farm & Ranch Magazine, which is published three times a year, recently listed more than 100 properties on the market for more than $1 million. "These land prices are unprecedented in the Hill Country. Ranchers can't pay them, and they haven't been able to for some time," says Charles Gilliland, a research economist at Texas A&M University's Real Estate Research Center.
GIFT SHOPS. The high prices--and the high tax appraisals that go along with them--are proving to be the last straws for old-time farmers and ranchers who have struggled for years to get by. On top of rising production costs, low beef prices, and a four-year drought, the real estate boom makes it nearly impossible for farmers and ranchers to make a living off their land. "This is a good time to cash out," says Gilliland.
Many old-time landowners are doing just that. Descendants of settlers who came to the Hill Country in the 1840s and 1850s, they are selling off or subdividing their property as never before. When Texas emerged from a seven-year recession in 1993, nonagricultural buyers reentered the rural land market. Ranchers held almost 60% of central Texas land before 1993 but now own only 15%. In Comal County, officials estimate that 13,000 acres have been lost to development. From 1992 to 1997, more than 1.2 million acres were converted from farms and ranches to subdivisions and gated communities.
Although recreational ranchers keep some properties intact, the character of the Hill Country is changing as the old ranching families leave the land. Country roads today are full of luxury cars instead of dusty pickups, and clothing stores, gourmet restaurants, and high-end gift shops are popping up in small towns where the biggest attraction used to be the Dairy Queen. Dinners out are punctuated by the constant chirping of cell phones, and wannabe ranchers prowl like foxes for cheap land.
Some ranching families are determined to hold on even though they don't make enough from agriculture to survive. They have turned to outside jobs, deer-hunting leases, and eco-tourism to support themselves. "All four of us have to work other jobs because we can't make enough from the ranch to survive. It's worth it, though, since it means we can keep the ranch in the family," says Lorie Friedrich Franz, whose family has owned 800 acres in Gillespie County since 1884. "This is our heritage, and we won't sell it."
"NO WAY." Dorothy Dean Shaw, whose family has owned a 200-acre ranch in Kerr County since 1900, feels the same way. "I have deep feelings for my ranch; it's more like a family member than land to me," she says. "People have offered lots of money for it, but the money isn't important to me. If I sold it, where would I go? To the big cities? No way." Shaw's children and grandchildren enjoy visiting the ranch, but they don't want to become full-time ranchers. That may be a problem.
Older ranchers--about 19% of landowners are over the age of 70--keep the property together to leave to their children, but the place usually means less to these kids than the cash they can earn from selling it. Even if they are interested in ranching, they often have to sell off land to pay high estate taxes. With all the pressure on old families to sell out, it doesn't seem likely that the breakup of large family ranches will slow down anytime soon.
And that may mean the end of a certain idea Texas has of itself: the notion that it's a land of rugged individualists, deep-rooted on the land. As the state comes increasingly to resemble everywhere else, with spreading suburbs and homogenized downtowns, its very identity seems at stake. Still, the wealthy urbanites buying up big spreads at least share some things with the ranchers of yore--a love of the land itself, and a desire to save the region's rugged beauty. It may well be that gentrification is the only way to preserve some wide open spaces in the Hill Country.
By Kristina Shevory
Edited by Harry Maurer
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