The Spanish issued Concessions of land to retired soldiers as an inducement for them to remain in the frontier. These Concessions reverted back to the Spanish crown upon the death of the recipient. Later, the Mexican government encouraged settlement of the coastal region of Alta California (now known as California) by issuing much larger land grants to Mexican citizens, both native born and naturalized. The grants were usually two or more square leagues, or 35 square kilometres (14 sq mi) in size. Unlike Spanish Concessions, Mexican land grants provided permanent, unencumbered property-ownership rights to the land, with most being called "ranchos." The ranchos granted by Mexico included most of the land along the California coast, around San Francisco Bay, inland along the Sacramento River, and land within the San Joaquin Valley.
Primarily devoted to raising cattle and sheep, the "rancheros" (rancho owners) patterned themselves as the landed gentry of New Spain. Their workers also included Native Americans who had learned to speak Spanish, many of them former Mission residents.
Spain made about 30 concessions between 1784 and 1821, and Mexico issued about 270 land grants between 1833 and 1846. The ranchos established permanent land-use patterns and many of their names are now used in California. The rancho boundaries became the basis for California's land survey system, and are found on modern maps and land titles.
The ranchos were partially based on geography, such as access to river water. Land development from that time often followed the boundaries of the ranchos, and many areas still retain the original names of the areas. For example, "Rancho San Diego" is now an unincorporated "rural-burb" east of San Diego, and "Rancho Bernardo" is a suburb in San Diego.
During Spanish rule (1769-1821), the ranchos were concessions from the Spanish crown, permitting settlement and granting grazing rights on specific tracts of land, while the crown retained the title. The ranchos, that is, the settlement by individuals of tracts of land outside presidio, mission, and pueblo boundaries, began in 1784, when Juan José Domínguez got permission from Spanish Governor Pedro Fages to put his cattle on the 48,000-acre (190 km2) Rancho San Pedro. The land concessions were usually measured in leagues. A league of land would encompass a square that is one Spanish league on each side - approximately 4,428 acres (1,792 ha). The Spanish and Mexican governments made a large number of concessions and land grants from 1785 to 1846.
It was not until the Mexican era (1821-1846) that the titles to the plots of land were granted to individuals. In 1821, Mexico achieved its independence from Spain, and California came under control of the Mexican government. The 1824 Mexican Colony Law established rules for petitioning for land grants in California; and by 1828, the rules for establishing land grants were codified in the Mexican Reglamento (Regulation). The Acts sought to break the land monopoly of the missions and also paved the way for luring additional settlers to California by making land grants easier to obtain. The Mexican Governors of Alta California gained the power to grant state lands, and many of the Spanish concessions were subsequently patented under Mexican law--frequently to local "friends" of the governor.
Through the Mexican secularization act of 1833, the Mexican government repossessed most of the lands initially "granted" to the Franciscan missions (about 1,000,000 acres (400,000 ha) per mission) by the Spanish crown who had "appropriated" the land "for the Mission Indians".Secularization was implemented between 1834 and 1836. The Mexican government allowed the padres to keep only the church, priest's quarters and priest's garden. The army troops guarding each Mission were dismissed. A commissioner would oversee the mission's crops and herds, while the land was divided up as communal pasture, a town plot, and individual plots for each Indian family. The Mission Indians, freed from the missions, often joined other interior tribes or sought work on the new ranchos along the troops formerly assigned to each mission.
The number of Mexican land grants greatly increased after the secularization of the missions in 1834. Although the original intent of the secularization legislation was to have the property divided among former surviving Mission Indians, most of the grants were made to local Californios, individuals who had been born in Alta California.
The Mexican rancho grants were provisional. The boundaries, on paper, had to be "officially" surveyed and marked. This produced a 'diseño', a hand-drawn topological map, to define the area. Since there were very few surveyors this requirement was seldom met. The grantee could not initially subdivide or rent out the land. The land had to be used for grazing or cultivated. Some kind of residential house had to be built within a year--most were initially simple adobe walled cabins. Public roads crossing through the property could not be closed. Most rancho grants boundaries and other requirements were not checked by the poorly paid and organized "government" of California who had little interest in land that brought in no taxes--money to run the government came from tariffs collected at Monterey, California.
The Mexican-American War began on May 13, 1846 with a declaration of war by the United States of America. Action in California began with the Bear Flag Revolt on June 15, 1846. On July 7, 1846, US forces took possession of Monterey, the capital of California, and terminated the authority and jurisdiction of Mexican officials that day. Armed resistance ended in California with the Treaty of Cahuenga signed on January 13, 1847. The Treaty of Guadalupe Hidalgo, ending the war, was signed February 2, 1848 and California became a Territory of the United States. Between 1847 and 1849, California was run by the U.S. military. A constitutional convention met in Monterey in September 1849, and set up a state government. It operated for 10 months before California was admitted to the Union as the 31st State by the United States Congress, as part of the Compromise of 1850, enacted on September 9, 1850.
While the end of the 1840s saw the close of Mexican control over Alta California, this period also marked the beginning of the rancheros' greatest prosperity. Cattle had been raised primarily for their hides and tallow, as there was no market for large quantities of beef, especially in the days prior to refrigeration, railroads or ice production. Demand dramatically changed with the onset of the Gold Rush, as thousands of miners and other fortune seekers flooded into northern California. These newcomers needed meat, and cattle prices soared with demand. The rancheros enjoyed the halcyon days of Hispanic California.
The Treaty of Guadalupe Hidalgo provided that the Mexican land grants would be honored. To investigate and confirm titles in California, American officials acquired the provincial records of the Spanish and Mexican governments in Monterey.
The new state's leaders soon discovered that the Mexican government had given a number of grants just before the Americans gained control. The Mexican governors had rewarded faithful supporters, and hoped to prevent the new immigrants from gaining control of the land. Sponsored by California Senator William M. Gwin, in 1851 Congress passed "An Act to Ascertain and Settle Private Land Claims in the State of California". The Act required all holders of Spanish and Mexican land grants to present their titles for confirmation before the Board of California Land Commissioners. Contrary to the Treaty of Guadalupe Hidalgo, this Act placed the burden of proof of title on landholders. Grantees were required to prove the validity of the grants they had received and establish their exact boundaries. The diseños available were often imprecise. Land had until the gold rush been of little value and boundary locations were often quite vague, referring to an oak tree, a cow skull on a pile of rocks, a creek, and in some cases a mountain range. The 588 grants made by Spanish and Mexican authorities in California between 1769 and 1846 encompassed more than 8,850,000 acres (3,580,000 ha), or nearly 14,000 square miles (36,000 km2).
Even in cases where the boundaries were more specific, many markers had been destroyed before accurate surveys could be made. Aside from indefinite survey lines, the Land Commission had to determine whether the grantees had fulfilled the requirements of the Mexican colonization laws. While the Land Commission confirmed 604 of the 813 claims it reviewed, most decisions were appealed to US District Court and some to the Supreme Court. The confirmation process required lawyers, translators, and surveyors, and took an average of 17 years (including the Civil War, 1861-1865) to resolve. It proved expensive for landholders to defend their titles through the court system. In many cases, they had to sell a portion of their land to pay for defense fees or gave attorneys land in lieu of payment.
Rejected Spanish and Mexican land claims resulted in conflicting claims by the grantees, squatters, and settlers seeking the same land. This resulted in pressure on Congress to change the rules. Under the Preemption Act of 1841, squatters were able to pre-empt others' claims to portions of the land and acquire clear title by paying $1.25 an acre for up to a maximum of 160 acres (0.65 km2). Land from titles rejected by the courts became part of the public domain and available to homesteaders after the first federal Homestead Act of 1862 was passed, allowing anyone to claim up to 160 acres (0.65 km2). This resulted in additional pressure on Congress, and beginning with Rancho Suscol in 1863, it passed special acts that allowed certain claimants to pre-empt their land without regard to acreage. By 1866 this privilege was extended to all owners of rejected claims.
A number of ranchos remained in whole or in part in the sliver of territory of Alta California left to Mexico by the Treaty of Guadalupe Hidalgo, which then became part of Baja California. Rancho Tía Juana (partially in San Diego County, California) lost its claim to title to its land in San Diego County but the balance of the rancho was confirmed by the Mexican government in the 1880s. Rancho El Rosario, Rancho Cueros de Venado and Rancho Tecate were each granted to citizens of San Diego in the 1820s or 1830s and lay wholly in what is now Baja California as was the Rancho San Antonio Abad, whose origin and title is more obscure. Their titles were never subjected to dispute in U.S. courts.
The rancheros became land-rich and cash-poor, and the burden of attempting to defend their claims was often financially overwhelming. Grantees lost their lands as a result of mortgage default, payment of attorney fees, or payment of other personal debts. Land was also lost as a result of fraud. A sharp decline in cattle prices, the floods of 1861-1862, and droughts of 1863-1864 also forced many of the overextended rancheros to sell their properties to Americans. They often quickly subdivided the land and sold it to new settlers, who began farming individual plots.
A shift in the economic dominance of grain farming over cattle raising was marked by the passage of the California "No-Fence Law" of 1874. This repealed the Trespass Act of 1850, which had required farmers to protect their planted fields from free-ranging cattle. The repeal of the Trespass Act required that ranchers fence stock in, rather than farmers fencing cattle out. The ranchers were faced with either the high expense of fencing large grazing tracts or selling their cattle at ruinous prices.
The ranchos established land-use patterns that are still recognizable in contemporary California. Many communities still retain their Spanish rancho name. For example, Rancho Peñasquitos, the first land grant by the Spanish in today's San Diego County, is now a suburb within the city of San Diego. Modern communities often follow the original boundaries of the rancho, based on geographic features and abstract straight lines. Today, most of the original rancho land grants have been dismantled and sold off to become suburbs and rural-burbs. A very small number of ranchos are still owned by descendants of the original owners, retain their original size, or remain undeveloped.
Rancho Guejito in San Diego County is considered the last of the San Diego Ranchos to be undeveloped. Only a few historic structures and an 8,000 square feet (740 m2) ranch house, built in the 1970s, occupy the 13,300 acres (5,400 ha). Benjamin Coates purchased the land in the 1970s after Governor Jerry Brown vetoed a purchase that would have made Guejito a state park. Coates purchased an additional 8,700 acres (3,500 ha) of surrounding land between the 1970s and his death in 2004. Coates and his wife Nancy both expressed their wishes that the Rancho remain undeveloped. After her death in 2006, ownership of the land passed to their daughter, Theodate Coates, an artist from New York City. Despite her parents' wishes that development be kept off of the Rancho, she has taken steps to remove Rancho Guejito's status as an agricultural preserve and eventually develop the land into tract housing.