Conservation Easements can be Used to Promote Green Roofs in Urban Areas

The Environmental Value of Green Roofs in Urban Areas

As the existential threat of climate change intensifies, it is critical that cities find creative solutions to reduce energy consumption.^[1] Cities, despite accounting for only two percent of the Earth’s surface, “consume [seventy-eight percent] of the world’s energy and produce more than [sixty percent] of [the total] greenhouse gas emissions.”^[2] If cities utilize strategies that reduce their consumption of greenhouse gas emissions, they will represent a key component in the fight against climate change.[3]

Cities are plagued by the urban heat island effect,^[4] a phenomenon in which urban structures, such as impervious rooftops covered by concrete and asphalt paved areas,^[5] “absorb solar heat (radiation) during the daytime and release it back to the environment at nighttime.”^[6] This causes cities to be warmer than surrounding areas.^[7] The urban heat island effect exacerbates local climate change, and any steps taken to reduce the effect will mitigate the onslaught of health and climate concerns associated with climate change.^[8] There is a direct relationship between increased temperatures and increased morbidity and mortality in cities.^[9] Moreover, as temperatures rise so does the consumption of greenhouse gasses;^[10] for example, electricity and energy usage surge as the heat island effect intensifies.[11]

Studies indicate that green roof systems are an effective technology to mitigate the urban heat island effect and have the added benefits of improving human thermal comfort,^[12] and promoting biodiversity.^[13] Green roofs are comprised of vegetation that absorbs rainwater, provides insulation, and consequently mitigates the heat island effect.^[14] Not only do green roofs offer considerable environmental benefits in mitigating the effects of the urban heat island effect, but they also diminish storm-water runoff,[15] increase air quality,[16] and “reduce greenhouse gas emissions by lessening the need for heating or air conditioning.”^[17] “In addition, green roofs offer an economic benefit to building owners by reducing heating and cooling costs, extending the life of the roof, reducing noise penetration, and adding aesthetic value.”^[18] As temperatures in cities increase, energy usage increases and further exacerbates the consequences of climate change.[19] The cumulative effects of green roofs can decrease the consumption of greenhouse gases and thus contributes to fighting climate change.[20]

Conservation Easement’s Application to Green Roofs

To encourage green roofs and reap their ecological benefits, cities across the country have implemented methods such as allowing green roofs as an as-of-right accessory use, “providing floor area bonuses for [the] installation of Green Roofs,” offering property tax abatement programs, and even going so far as “requiring green roofs in some development agreement[s].”^[21] While local and federal governments have taken proactive steps to create incentives to encourage green roofs to capitalize on their ecological benefits,[22] there is more that can be done within the existing legal framework to meet the challenge of urban heat island effect through the increased deployment of green roofs. Section 170(h) of the Internal Revenue Code (“IRC”) represents an opportunity to encourage green roofs through a fiscal incentive.

Congress enacted Section 170(h) in recognition that conservation easements “play an important role in preservation efforts.”^[23] When a conservation easement contributes to “conservation goals without presenting significant potential for abuse,” then deductible contributions are appropriate under Section 170(h).^[24] This section of the IRC encourages private landowners to donate conservation easements in exchange for income tax incentives.^[25] Conservation easements could be placed on green roofs under Section 170(h) since green roofs play such an important role in the mitigation of the urban heat island effect and climate change.

Creating more incentives to encourage the installation of green roofs promotes the preservation of the environment, improves the health and well-being of citizens, and creates a potentially lucrative fiscal incentive for developers who can reap tax benefits.^[26] There is a tremendous opportunity to increase construction of green roofs and capitalize on the tax benefits in urban areas across the country. In urban areas, roofs usually occupy between twenty and twenty-five percent of urban surface area; the implementation of green roofs and their ecological benefits “could substantially impact the local environment.”^[27]

For example, the Nature Conservancy estimates that fewer than 100 acres of the 40,000 acres of New York City rooftops contain green roofs.^[28] As extreme heat events associated with the effects of climate change and the urban heat island continue to plague New York City, the city’s “most vulnerable populations such as the elderly, and [] those with low incomes or preexisting medical conditions” are disproportionately impacted.^[29] WE ACT and NRDC are two environmental non-profit organizations that have recognized that green roofs contribute to cooling the city and alleviating the disproportionate impact on vulnerable communities.[30] These organizations have called upon Mayor Eric Adams to introduce bills that encourage green roofs.^[31]

A Green Roof Meets the Section 170(h) Requirements

There is no minimum size requirement for a qualifying conservation easement; rather, it matters that there is “any retained use contributed for a conservation purpose.”^[32] Therefore, for the purposes of its application to a conservation easement under Section 170(h), it is irrelevant how large the green roof is. Nonetheless, Section 170(h) requires^[33] that if a property owner is to apply a conservation easement to a green roof and gain the benefits of the income tax incentives,^[34] the contribution must be “(A) of a qualified real property interest, (B) to a qualified organization, (C) exclusively for conservation purposes.”^[35]

A. The Contribution is of a Qualified Real Property Interest

A qualified real property interest (“QRPI”) includes “a restriction (granted in perpetuity) on the use which may be made of the real property.”^[36] The statute addresses the Rule Against Perpetuities issue by providing that “[t]he perpetuity of conservation purpose requirement is meant to prevent taxpayers from trading a use restriction for a current tax deduction and then removing the restriction if it becomes inconvenient.”^[37] An extinguishment clause of the easement meets the “protected in perpetuity” requirement so long as the donor receives no windfall upon extinguishment.^[38] Where there is an affirmative obligation upon the taxpayer in perpetuity to maintain the properties in a manner consistent with their conservation purposes, it is not a violation of the perpetuity requirement if there is a remote possibility the organization could abandon the easements.^[39] Consequently, a conservation easement is “best suited to a landowner who wants to retain some limited use of the property while ensuring the property will not be further developed in the future.”^[40] So long as the easement for the green roof is granted with an affirmative obligation upon the taxpayer in perpetuity to maintain the roof in a manner consistent with its conservation purposes, the perpetuity requirement can be met.

A conservation easement must cover a fixed parcel of land to be a QRPI,^[41] such as the fixed area of the roof of a property. In Belk v. Commissioner, a “seminal case on the issue of QRPI and perpetuity,”^[42] the court determined that because the property owner’s conservation easement included the ability to change the boundaries of the easement, the easement was not granted in perpetuity and no tax benefit was earned.^[43] If a conservation easement is attached to a green roof, the boundaries are unable to change because a roof is of fixed size and shape.^[44]

B. The Contribution is to a Qualified Organization

A land trust or a government agency qualifies as a qualified organization, “however the former is more common.”^[45] “Many state and local governments that wish to receive conservation easements have established government land trusts to receive and hold them or designated agencies to have the power to receive or hold particular kinds of conservation easements.”^[46] Whether the contribution is to a qualified organization is the least contested in litigation among the three requirements under Section 170(h).^[47]

C. The Contribution is Exclusively for Conservation Purposes

In order for a taxpayer to claim a tax deduction for a conservation easement, they must demonstrate that the easement is “exclusively for conservation purposes.”^[48] Conservation purposes must include one of the following means:

(i) the preservation of land areas for outdoor recreation by, or the education of, the general public;

(ii) the protection of a relatively natural habitat of fish, wildlife, or plants, or similar ecosystem

(iii) the preservation of open space (including farmland and forest land) where such preservation is

(I) for the scenic enjoyment of the general public, or

(II) pursuant to a clearly delineated Federal, State, or local governmental conservation policy, and will yield a significant public benefit.^[49]

Green roofs would most likely qualify for a conservation easement under Section 170(h)(4)(ii) as they can be utilized for the protection of a relatively natural habitat.

The case of Glass v. Comm’r affirmed that “[a] habitat denotes ‘[t]he area or environment where an organism or ecological community normally lives or occurs’ or ‘[t]he place where a person or thing is most likely to be found.’”^[50] Moreover, “[a] community may be defined in this context as ‘[a] group of plants and animals living and interacting with one another in a specific region under relatively similar environmental conditions.’”^[51] A green roof is made up of a variety of native vegetation, which provides habitat that is beneficial to plants and animals in cities.^[52] A green roof, consistent with Glass’s definitions, provides critical and diverse habitats where plants and animals can interact to promote biodiversity that would otherwise be lost in a dense city. The characteristics of a green roof are qualified as a conservation purpose under Section 170(h)(4)(ii) as they protect the “natural habitat of [] wildlife, or plants, or similar ecosystem.”[53]

Historically, the IRS has pursued technical challenges to test the acceptability of proposed “conservation purposes,” such as alleging that “the habitat is not protected in a relatively natural state” or “the habitat or ecosystem to be protected is not ‘significant,’ or the public lacks adequate access to the property.”^[54] For example, in Champions Retreat Golf Founders, LLC v. Comm’r of IRS, the IRS contested whether a conservation easement on a golf course was for “the protection of a relatively natural habitat of fish, wildlife, or plants, or similar ecosystem.”^[55] The Eleventh Circuit broadly interpreted^[56] the protection of a relatively natural habitat to mean that the golf course was “entitled to a deduction if its easement includes habitat for ‘rare, endangered, or threatened species of animal, fish, or plants’ [and] if the easement contributes to the ‘ecological viability’” of the adjacent land.^[57] While the IRS disputed that a golf course is not “relativity natural,” the court held, that “[w]hat matters under the Code and regulation is not so much whether all the land is natural, but whether the habitat is natural.”^[58] At issue was whether the easement improves the chance that a rare, endangered, or threatened species will be preserved.^[59] This distinction is important for a green roof, a created ecosystem, because so long as the roof contains a habitat that contributes to the ecological viability of the surrounding land, it does not matter whether the land, i.e., the roof, is natural.

It is less likely a conservation easement would be pursued under Section 170(h)(4)(i), as most property owners would not be eager to allow public access to their green roofs due to liability and security concerns. In the alternative, if an owner would like limited public access to the green roof, the amount of public access required to satisfy the conservation purpose will vary.^[60]

An owner would likely be unable to pursue an easement under Section 170(h)(4)(iii), because open space is interpreted to be more inclusive of farmland or forest land, not a green roof. The Champions court held that an easement for the preservation of open space under (iii)(I) “for the scenic enjoyment of general public” yielded a significant public benefit because even though the easement included a golf course, members of the public could and did partake in recreation on a river that ran through the easement.^[61] The golf course, although private like a building, included an easement that ran to the bank of a river and was adjacent to a large national forest.[62]

It would be more convincing to argue that a green roof would qualify as being “exclusively for conservation purposes” because it will yield a significant public health benefit in the reduction of urban heat island effects.^[63] Moreover, a green roof can be promoted as a conservation easement if it is under “a clearly delineated Federal, State, or local governmental conservation policy.”^[64]

Conservation Easements are Underutilized to Promote Green Roofs in Urban Areas

Green roofs can be viable candidates for the associated tax deduction for a conservation easement under Section 170(h) of the IRC because the contribution would be “(A) of a qualified real property interest, (B) to a qualified organization, (C) exclusively for conservation purposes.”^[65]

Negative effects of urban heat islands are exacerbated by each new patch of concrete that is added to a city; it is imperative that cities expand their tools to encourage solutions to cool the city. Section 170(h) represents an underutilized tool to incentivize the implementation of green roofs in urban areas where the majority of roofs continue to be dark and impervious. Cities should use tools of every size and nature to combat the existential threat of climate change.

[1] Yujiro Hirano, et al., Simulation-Based Evaluation of the Effect of Green Roofs in Office Building Districts on Mitigating the Urban Heat Island Effect and Reducing CO2 Emissions, 11 Sustainability 2055, 2055 (Apr. 2019) (citing 2050 Low-Carbon Society Scenario, Nat’l Inst. Envt’l. Stud. (last visited on Jan. 16, 2018); Shuzo Murakami et al., Overview of energy consumption and GHG mitigation technologies in the building sector of Japan, 2 Energy Effic. 179–94 (2009)).

[2] Cities and Pollution, U.N., www.un.org/en/climatechange/climate-solutions/cities-pollution [perma.cc/75YZ-UGEJ] (last visited Mar. 18, 2021).

[3] Cities: a ‘cause of and solution to’ climate change, UN Climate and Envtl. (Sept. 18, 2019), www.news.un.org/en/story/2019/09/1046662 [perma.cc/3U4V-DL2E] (explaining that “cities, while being the main cause of climate change, are also the most affected,” and “have the potential to deliver major emission cuts”).

[4] Danielle Spiegel-Feld & Lauren Sherman, Expanding Green Roofs in New York City: Towards A Location-Specific Tax Incentive, 26 N.Y.U. Envtl. L.J. 297, 310–11 (2018). For example, in New York City, the overwhelming quantity of dark and paved rooftops, create an “an oven-like effect during hot summer months that raises ambient temperatures in the surrounding areas,” and accordingly, “the daily minimum temperature is an average of seven degrees Fahrenheit warmer in [ ] City than in surrounding suburban areas during the summer.” Id. (citing N.Y. State Energy Res. & Dev. Auth., Mitigating New York City’s Heat Island With Urban Forestry, Living Roofs, and Light Surfaces 6 (Oct. 2006); Kenneth Acks et al., Green Roofs in the New York Metropolitan Region (2006)).

[5] Patricia E. Salkin, Why sustainable design and green buildings?, 3 N.Y. Zoning Law & Prac. § 32A:1 (Sept. 2021); U.S. EPA, Reducing Urban Heat Islands: Compendium of Strategies: Urban Heat Island Basics 1 (2008).

[6] Steffen Lehmann, Low Carbon Districts: Mitigating the Urban Heat Island with Green Roof Infrastructure, 5 City, Culture & Soc’y 1, 5 (2014) (citing T.R. Oke, Canyon geometry and the nocturnal urban heat island: Comparison of scale model and field observations, 1 Int’l J. Climatology 237-54 (1981)).

[7] Anna Scott et al., Reduced Urban Heat Island Intensity Under Warmer Conditions, 13 Envt’l Rsch. Letters 64003 (June 2017).

[8] Megan Rupard, B.S. City & Regional Planning, Urban Heat Islands: Causes, Impacts & Mitigation 7 (California Polytechnic State University San Luis Obispo, Senior Project Advisor: Keith Woodcock) (June 2019) (explaining the relationship between Urban Heat Impact and Climate Change:

Local climate changes differ from global climate changes in that their effects are confined to the local scale and decrease with distance from their source. Global climate changes, such as those caused by excess greenhouse gas emissions, are not locally or regionally confined, though the impacts from urban heat islands and global climate change are often similar. For example, both urban heat islands and global climate change can increase energy demand, mainly through heating and cooling, and both can cause an increase in air pollution and greenhouse gas emissions.).

Climate Change and Heat Islands, Envt’l Protection Agency, www.epa.gov/heatislands/climate-change-and-heat-islands [perma.cc/US2U-X8WG] (internal citations omitted) (last visited at Mar. 18, 2021) (explaining some of the environmental concerns as increase heat waves and the related health concerns as:

When people are exposed to extreme heat, they can suffer from potentially deadly illnesses, such as heat exhaustion and heat stroke. Hot temperatures can also contribute to deaths from heart attacks, strokes, and other forms of cardiovascular disease.).

[9] Sharon L Harlan & Darren M Ruddell, Climate change and health in cities: impacts of heat and air pollution and potential co-benefits from mitigation and adaptation, 3 Current Op. Envt’l. Sustainability 126, 126–34 (2011); Scott, supra note 7, at 64003 (citing WMO 2014 Atlas of Mortality and Economic Losses from Weather, Climate, and Water Extremes (1970–2012) (Geneva: World Meteorological Organization)).

[10] Rupard, supra note 8, at 7.

[11] M. Santamouris, et al., On the Impact of Urban Heat Island and Global Warming on the Power Demand and Electricity Consumption of buildings—A Review, 98 Energy & Bldg 119-20 (2015).

[12] Foustalieraki, M. et al., Energy Performance of a Medium Scale Green Roof System Installed on a Commercial Building Using Numerical and Experimental Data Recorded During the Cold Period of the Year, 135 Energy & Bldg. 33, 33 (2017) (citing M. Santamouris, Cooling the cities – a review of reflective and green roof mitigation technologies to fight heat island and improve comfort in urban environments, 103 Sol. Energy 682–703 (2014)); see also Lehmann, supra note 6, at 5 (citing Yasunobu Ashie, Management of urban heat environment Urban Environmental Management and Technology 215-38 (2008); Federico Butera, Urban energy transition: From fossil fuels to renewable power 329-64 (2008); Torben, Dahl Climate and architecture (2010); Evyatar Erell, David Pearlmutter, & Terence Williamson, Urban microclimate: Designing the spaces between buildings (2011); Lisa Mummery Gartland, Heat islands: Understanding and mitigating heat in urban areas (2008); T.R. Oke, Towards better scientific communication in urban climate, 84 Theoretical & Applied Climatology 179 (2006)).

[13] Spiegel-Feld & Sherman, supra note 4, at 297.

[14] Jason Rogovich, New York City Green Roof Laws Take Effect, CityLand 1 (Nov. 25, 2019).

[15] Protecting Water Quality from Urban Runoff, EPA 841-F-03-003, 1-2 (Feb. 2003), www3.epa.gov/npdes/pubs/nps_urban-facts_final.pdf [perma.cc/52ET-6EDV] (stating the importance of reducing runoff because it “carries pollutants such as oil, dirt, chemicals, and lawn fertilizers directly to streams and rivers, where they seriously harm water quality”).

[16] Noah Garrison & Cara Horowitz, Looking Up: How Green Roofs and Cool Roofs Can Reduce Energy Use, Address Climate Change, and Protect Water Resources in Southern California, NDRC 10-11 (June 2012).

[17] Jonathon Sizemore, City Council Committee Searches for Green Roof Standards and Impetus, CityLand (Nov. 3, 2016).

[18] Id.

[19] Garrison & Horowitz, supra note 16, at 11 (explaining that if green roofs were installed on half of “the existing roof surfaces in urbanized Southern California” or on new construction/redevelopment, “the resulting direct energy savings from reduced building cooling energy” would be significant enough to reduce greenhouse gas emissions between 288 to 465 thousand metric tons of CO2 equivalent annually).

[20] Id. at 2, 3, 7.

[21] Patricia E. Salkin, Water conservation, 3 N.Y. Zoning Law & Prac. § 32A:82 (Sept. 2021) (summarizing tools to encourage Green Roof tops:

the City of Pittsburg allows them as an as-of-right accessory use. Chicago and Portland give floor area bonuses for installation of Green Roofs. Portland also requires green roofs in some development agreements where the City is assisting through its Urban Renewal Areas initiative. New York State has adopted a property tax abatement for Green Roofs in New York City.

(citing City of Pittsburg, PA., Code §§ 912.02, 912.03; City of Portland, OR, § 33.510(10); City of Chicago, IL, Code § 17-4-1015; RPL §§ 499-aaa et seq.)).

[22] See Salkin, supra note 21, at § 32A:82 (providing examples of proactive steps that have been taken to create incentives to encourage green roofs).

[23] Hale E. Sheppard, 30 ‘Wrongs’ Do Not Make a Right: Revealing Extraordinary IRS Actions in Conservation Easement Disputes, 49 Real Est. Tax’n. 4, 6 (2022) [hereinafter 30 ‘Wrongs’ Do Not Make a Right] (citing U.S. Senate, Tax Treatment Extension Action of 1980, 96th Cong., 2d Sess., Rep’t No. 96–1007).

[24] 30 ‘Wrongs’ Do Not Make a Right, supra note 23, at 4, 6 (citing U.S. Senate, Tax Treatment Extension Action of 1980, 96th Cong., 2d Sess., Rep’t No. 96–1007).

[25] Harwell E. Coale III, Conservation Easements As Qualified Conservation Contributions, 66 Ala. Law. 124, 125 (2005) (discussing how Section 170(h) provides income tax incentives “in return for the donation of conservation easements by private landowners provide a useful tool for accomplishing [ ] preservation goals”). The developer can continue to use, occupy and manage the property, subject to the new conservation easements. John W. Caffry, Richard Larson & Jesse Larson, Introduction to Conservation Easements in New York, NYSBA Real Property Section 7 (Jul. 2019).

[26] Vanessa Perry, Conservation Easements as Tool to Preserve Open Space and Food Production Opportunities in Urban Areas (Dec. 2013) www.tcalt.files.wordpress.com/2013/12/urban-conservation-easements1.pdf [perma.cc/XDU9-JN2X] (“Properties near parks and managed open spaces frequently have higher value than otherwise similar properties in fully developed areas.”).

[27] Spiegel-Feld & Sherman, supra note 4, at 298 (citing Akbari et al., Analyzing the Land Cover of an Urban Environment Using High-Resolution Orthophotos, 63 Landscape & Urb. Plan. 1 (2003)).

[28] Kate Frazer, Green Roofs in NYC, Nature Conservancy, www.nature.org/en-us/about-us/where-we-work/united-states/new-york/stories-in-new-york/green-roofs-new-york-city/ [perma.cc/X2UR-MAN5] (last visited Mar. 21, 2022).

[29] Juan Declet-Barreto et al., Summer in the City: Improving Community Resilience to Extreme Summertime Heat in Northern Manhattan, NDRC & WE ACT 4 (June 2021).

[30] Id.

[31] Id. at 16.

[32] Glass v. Comm’r, 471 F.3d 698, 711 (6th Cir. 2006).

[33] 30 ‘Wrongs’ Do Not Make a Right, supra note 23, at 8 (citing Internal Revenue Service. Conservation Easement Audit Techniques Guide (Rev. 1/24/2018) 24-31; IRS Publication 1771, Charitable Contributions – Substantiation and Disclosure Requirements; IRS Publication 526, Charitable Contributions; Section 170(f)(8); Section 170(f)(11); Treas. Reg. § 1.170A-13; Notice 2006-96; TD 9836) (stating that to claim the tax deduction from an easement donation:

the taxpayer must obtain a Qualified Appraisal from a Qualified Appraiser, demonstrate that the land trust is a Qualified Organization, obtain a Baseline Report, complete a Form 8283 (Noncash Charitable Contributions), file a timely tax return enclosing Form 8283 (Noncash Charitable Contributions) and other items, and receive from the land trust an appropriate written acknowledgment of the donation.).

[34] Hale E. Sheppard, Series of Tax Court Orders Allowing Nonconsensual Depositions by IRS: Aberration or Trend?, 33 Tax’n Exempt’s 4, 7 (2022). “The value of the conservation easement is the fair market value of the property at the time of the donation.” Id. (citing 26 U.S.C. § 170(a)(1) (2022); Treas. Reg. § 1.170A-1(c)(1)).

[35] 26 U.S.C. § 170(h)(1) (2022) (referencing 26 U.S.C. § 170 (f)(3)(B)(iii) (2022)).

[36] 26 U.S.C. § 170(h)(2) (2022). Put another way, “[T]he term ‘qualified real property interest’ means any of the following interests in real property: (A) the entire interest of the donor other than a qualified mineral interest, (B) a remainder interest, and (C) a restriction (granted in perpetuity) on the use which may be made of the real property.” Arthur Macomber, Ad Valorem Taxation of Conservation Easements, 50 Advocate 28 (2007) (citing 26 U.S.C. § 170(h)(2)) (2022); see also Nikolai Karetnyi & Ruoxi Zhang, Federal Income Taxation, 72 Mercer L. Rev. 1185, 1186 (2021) (citing 26 U.S.C. § 170(b)(2); (h)(2); (f)) (2022) (providing a definition of qualified real property interest). “Whether a claimed donation of a property interest is of an entire interest, and thus properly deductible, or of a partial interest, and thus not properly deductible, is ‘ultimately a question of federal law,’ but ‘[t]he answer to this federal question . . . largely depends upon state law’ property rights.” Mann v. United States, 364 F. Supp. 3d 553, 561 (D. Md. 2019), aff'd,984 F.3d 317 (4th Cir. 2021) (quoting United States v. Craft, 535 U.S. 274, 278 (2002)).

[37] Elizabeth M. Hughes, Terrain, Taxes, and Land Trusts: Saving the Florida Panther Through the Use of Conservation Easements, 94 Fla. B. J. 53, 54 (Nov./Dec. 2020). “A contribution shall not be treated as exclusively for conservation purposes unless the conservation purpose is protected in perpetuity.” 26 U.S.C. § 170(h)(5)(A) (2022).

[38] Irby v. Comm’r, 139 T.C. 371, 382 (2012) (holding that where the extinguishment clause provided for the donee to repay the government upon extinguishment of the easement, the conservation easement met the perpetuity requirement).

[39] Comm'r v. Simmons, 646 F.3d 6, 10 (D.C. Cir. 2011); see also Stotler v. Comm’r, 53 T.C.M. (CCH) 973, 980–81 (1987) (holding that an easement was granted in perpetuity even if there was a remote possibility the grantee could abandon it).

[40] Coale, supra note 25, at 125–26. Although, a taxpayer in a long-term lease of a building would be unable to meet the perpetuity requirement as they do not have a fee interest in the building. Harbor Lofts Assocs. v. Comm’r of Internal Revenue, 151 T.C. 17, 26 (2018) (the Tax Court held that “buildings’ long-term lessee, did not have a fee interest in the buildings and did not contribute a conservation restriction protected in perpetuity under section 170(h)”).

[41] Frank Agostino, Anson H. Asbury, & Ronald Levitt, Give It Away Now: An Update on Conservation Easements, Charitable Deductions, and Substantial Compliance (Part 2), 33 Prac. Tax Law. 13, 26 (May 2019).

[42] Beckett G. Cantley & Geoffrey C. Dietrich, Ground Zero: The IRS Attack on Syndicated Conservation Easements, 45 Wm. & Mary Envtl. L. & Pol’y Rev. 427, 432 (2021).

[43] Belk v. Commissioner, 774 F.3d 221, 223-26 (4th Cir. 2014); see also Bosque Canyon Ranch, L.P. v. Commissioner, 867 F.3d 547, 552 (5th Cir. 2017) (holding that where there was no QRPI, the easement boundaries could be alternated by mutual agreement with the donee).

[44] Balsam Mountain Investments, LLC v. Commissioner, 109 T.C.M. (CCH) 1214, 8 (T.C. 2015). A conservation easement must an “identifiable, specific piece of real property.”  Id. Balsam Mountain Investments, LLC v. Commissioner, 109 T.C.M. (CCH) 1214, 8 (T.C. 2015). Although this court had previously held that the conservation easement which “restrict[ed] the development of 10,000 square feet of the unused development rights over the existing apartment building,” and the terms do not destroy the owner “or subsequent purchasers of the Fifth Avenue property from altering or even demolishing that existing building.” Herman v. Comm’r, 98 T.C.M. (CCH) 197, 8 (T.C. 2009) (applying 26 U.S.C. § 170(h)(4)(A)(iv) (2022)). This begs the question of whether a conservation easement on a roof would allow or preclude an owner from conducting an addition or demolition.

[45] Deepti Bansal Gage, Offering A Mulligan on Conservation Easement Tax Law: Ensuring Public Access on Conserved Land, 10 Ariz. J. Envtl. L. & Pol’y 342, 364 (2020) (citing 26 U.S.C. § 170(h)(3) (2022); C. Timothy Lindstrom, A Guide to the Tax Aspects of Conservation Easement Contributions, 7 Wyo. L. Rev. 441, 451 (2007)).

[46] James Salzman et. al., The Most Important Current Research Questions in Urban Ecosystem Services, 25 Duke Envtl. L. & Pol’y F. 1, 32 fn. 135 (2014) (internal citations omitted).

[47] Cantley & Dietrich, supra note 42, at 431 (citing Most Litigated Issues--Charitable Deductions Under IRC §170, Taxpayers Advocate 530, 537 (2018), www. taxpayeradvocate.irs.gov/Media/Default/Documents/2018-ARC/ARC18_Volume1_MLI_08_CharitableDeductions.pdf [perma.cc/M2K2-97SF]).

[48] 26 U.S.C. § 170(h)(1)(c) (2022).

[49] 26 U.S.C. § 170(h)(4) (2022). Put another way, “[c]ommon conservation purposes include preserving land for public recreation or education, safeguarding a relatively natural habitat for plants and animals, maintaining open space for scenic enjoyment by the general public, and utilizing property pursuant to a government conservation policy.” 30 ‘Wrongs’ Do Not Make a Right, supra note 23, at 7 (2022) (citing 26 U.S.C. § 170(h)(4)(A) (2022); Treas. Reg. § 170A–14(d)(1)).

[50] Glass, 471 F.3d at 708 (citing Glass v. Comm'r, 124 T.C. 258, 281-82, 2005 WL 1231654 (2005) (quoting American Heritage Dictionary of the English Language 786 (4th ed. 2000); citing 7 C.F.R. § 636.3 (2002)).

[51] Glass, 471 F.3d at 708 (citing Glass, 124 T.C. at 282 (quoting American Heritage Dictionary of the English Language 374)).

[52] U.S. General Services Administration, The Benefits and Challenges of Green Roofs on Public and Commercial Buildings 10, 39-40 (May 2011).

[53] 26 U.S.C. § 170(h)(4)(ii) (2022).

[54] Hale E. Sheppard, Three New IRS Challenges To Tax Insurance in Conservation Easement Disputes, 49 Real Est. Tax’n. 4, 7 (2021) (citing IRS, Conservation Easement Audit Techniques Guide 78-81 (rev. Nov. 4, 2016)). “Significance is subjective and is typically decided on a case by case basis.” Cantley & Dietrich, supra note 33, at 437 (citing Champions Retreat Golf Founders, LLC v. Comm'r of IRS, 959 F.3d 1033, 1041 (11th Cir. 2020)). “Although circuit courts, like the Eleventh Circuit in Champions, have generally been more sympathetic to taxpayers and have interpreted the applicable regulations quite broadly, the Tax Court has resisted at every point that it can.” Id. at 439 (citing e.g., Pine Mountain Pres., LLLP v. Comm’r of Internal Revenue, 151 T.C. 282 (2018)).

[55] Champions Retreat Golf Founders, 959 F.3d at 1036. The other conditions of conservation did not apply in this easement because the land was “not available for recreation by or use of the general public,” was not historically important land, there is no certified historic structure on it, nor was there a “qualifying federal, state, or local government conservation policy that applies to this land.” Id. (referencing 26 U.S.C. § 170(h)(4)(A)(i); (iii); (iv) (2022)).

[56] Cantley & Dietrich, supra note 33, at 438.

[57] Champions, 959 F.3d at 1037, 1041.

[58] Id. at 1038 (emphasis in original).

[59] Id. at 1039.

[60] PBBM-Rose Hill, Ltd. v. Comm’r of Internal Revenue, 900 F.3d 193, 201 (5th Cir. 2018) (internal citations omitted).

[61]Champions Retreat Golf Founders, 959 F.3d at 1040-41.

[62] Id. at 1036–37.

[63] 26 U.S.C. § 170(h)(4) (2022).

[64] Id.

[65] 26 U.S.C. § 170(h)(1) (2022) (referencing 26 U.S.C. § 170 (f)(3)(B)(iii) (2022)).