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What Does It Mean to Be Land Poor?

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  • Written By: M. McGee
  • Edited By: Lauren Fritsky
  • Last Modified Date: 07 November 2016
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Land poor has a few different meanings that all center on the same concepts. The basic idea is that a person owns land, often quite a bit of land, but has very few liquid assets. From here, the term takes on a few different meanings. One of the more common is that the land is good, but the owner doesn't have the resources to do anything with it. Another is that the lack of liquidity is caused by having to pay upkeep on the land. In any case, the term is most commonly used in times when the real estate market is low and the owner is unable to sell property to gain liquidity.

The term "land poor" has been in common usage since just after the American Civil War. It was first used to describe southern plantation owners that had large amounts of land, but no way to hire workers to farm it. The economic system of the southern United States was in free fall after the war; this made the land worthless, and the shattered economy had no way of allowing it to recover. The land owners may have held much land, but they were completely broke.

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In later years, the term was still used to describe similar situations, although rarely on that scale. Even so, the most common land poor people were still farmers. A farmer may have had a small fortune in real estate, but he was using it in a way that generated marginal profits. It was possible to sell off pieces of the land to generate income, but that would simply make less planting room and, therefore, fewer future profits.

In an increasingly industrialized and urban society, land poor took on other meanings. In the newer definition, the land both has value and generates income, but only enough to cover its use. In these cases, the land both makes and costs money, and the final tally is essentially zero. The owner isn't making enough money to actually improve or better utilize her land.

This situation is most common in non-production businesses such as renting apartments or operating a parking lot. Since upkeep on the land's improvements costs money and the land has property taxes, often from more than one level of government, these businesses are rarely as simple as they appear to onlookers. When a company actually produces something on the property, the likelihood of being land poor is much less, as the final product cost is spread out over the individual produced items.

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