Harford County’s agricultural-preservation program could be endangered by the declining real estate market because taxes on home sales cover most of the program’s costs, county officials say.

Harford suffered a 50 percent decrease in home sales in January compared with the same month last year, so the 1/2-percent transfer tax on home sales is bringing in less revenue to buy development rights from farmers, said County Councilman Chad Shrodes of north Harford.

“Many people are focused on the decline in prices, but from a county revenue perspective, the more important factor is the slowing of transaction volume,” economist Anirban Basu said.

As more homes sit on the market, counties make less from transfer taxes, he said.

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Harford suffered the largest month-over-month decrease in sales volume in the Baltimore region in January, Metropolitan Regional Information Systems Inc. reported.

And revenues from the transfer tax have come in 20 percent to 40 percent lower than expected over the last few years, said Council President Billy Boniface.

“Things were good in the years when the market had a lot of ups,” Shrodes said. “We were bringing more money in than we could spend on preservation for a while. Next year, we may not be able to preserve as much as we have been.”

With the addition of 23 properties to the county preservation program, Boniface said, Harford will have just enough money to keep paying those who have already entered the program.

Expanding it, Boniface said, would require new revenue or new methods of preservation. One way is the transfer of development rights from farmland owners to those who have parcels in already developed areas.

This preserves agricultural land, as farmers give up their rights to develop, and allows denser projects in areas close to existing roads and public utilities.

Shrodes said the slowing real estate market has helped preserve farmland by lowering the demand for farmers to convert their land into housing developments. When combined with increases in the amount the county is willing to pay for development rights, the market is making preservation a more profitable option, he said.

Along with the efforts to transfer development rights, Shrodes said, the county could preserve more land through state programs and allow parts of farms to be divided into smaller, denser pieces while preserving the rest of the land.

“We need to put a few new tools in the box,” Boniface said.

msantoni@baltimoreexaminer.com