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Zoning, TDRs, and the Density of Development

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  • Walls, Margaret

    ()
    (Resources for the Future)

  • McConnell, Virginia

    ()
    (Resources for the Future)

  • Kopits, Elizabeth

Abstract

Many communities on the urban fringe are implementing a range of policies to preserve farmland and open space, cluster residential development, and guide development to areas with existing infrastructure. These efforts are an attempt to control overall growth and the concomitant loss in open space and also to counter a trend toward the so-called large lot development that often takes place in these areas. Planners have argued that policies to manage density are the most important local policy focus for urban areas in the coming years. It is possible that large lot development and sprawl are themselves the result of government policy. Most local governments use zoning to establish minimum acreage requirements for each residential dwelling unit; in ex-urban localities, these limits are often quite high. Developers might build a subdivision with average lot sizes greater than the minimum but they cannot by law go below it. Some researchers have argued, however, that the spatial patterns of development are simply the natural result of household preferences and market forces. In this paper, we address the question of whether zoning limits are the primary cause of lowdensity, sprawling development or whether market forces tend to dictate this outcome. If zoning limits account for low-density development in at least some cases, how would development patterns be different if there had been no such rules? We begin by constructing a simple model of the developer decision about the density of new development. The subdivision is the unit of observation, and developers must weigh both demand and cost considerations in choosing density, in addition to complying with zoning restrictions that vary across parcels. We apply the model using parcel-level data from a region where zoning rules vary but are exogenous to the period under study. Calvert County, Maryland, near Washington, DC, is an historically rural county that has experienced rapid growth in recent years. The county has a transferable development rights (TDRs) program that has led to a great deal of variability in the intensity of development across properties. We are able to not only examine the extent to which zoning has contributed to large lot development but also to determine the economic forces that underlie density decisions. Finally, we are able to forecast how density would have been different in the absence of zoning rules by estimating a Tobit equation that is censored for the observations constrained by zoning.

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Bibliographic Info

Paper provided by Resources For the Future in its series Discussion Papers with number dp-05-32.

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Date of creation: 20 Jul 2005
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Handle: RePEc:rff:dpaper:dp-05-32

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Keywords: housing density; zoning; transferable development rights;

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References

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Citations

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Cited by:
  1. Ferris, Jeffrey & Newburn, David, 2013. "Does Zoning Cause Sprawl?," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C., Agricultural and Applied Economics Association 150252, Agricultural and Applied Economics Association.
  2. Magliocca, Nicholas & McConnell, Virginia & Walls, Margaret & Safirova, Elena, 2012. "Zoning on the Urban Fringe: Results from a New Approach to Modeling Land and Housing Markets," Discussion Papers, Resources For the Future dp-11-32, Resources For the Future.
  3. Maria A. Cunha-e-Sa & Sofia F. Franco, 2013. "The Effects of Land-Use Development Policies on Forest Management," FEUNL Working Paper Series wp576, Universidade Nova de Lisboa, Faculdade de Economia.
  4. Paul Gottlieb, 2013. "Agricultural preservation, large-lot zoning, and real estate development in New Jersey, USA," ERSA conference papers ersa13p513, European Regional Science Association.
  5. Lewis, David J., 2010. "An economic framework for forecasting land-use and ecosystem change," Resource and Energy Economics, Elsevier, vol. 32(2), pages 98-116, April.
  6. Wrenn, Douglas H. & Sam, Abdoul G. & Irwin, Elena G., 2012. "Searching for the Urban Fringe: Exploring Spatio-Temporal Variations in the Effect of Distance versus Local Interactions on Residential Land Conversion Using a Conditionally-Parametric Discrete-Time D," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington, Agricultural and Applied Economics Association 125007, Agricultural and Applied Economics Association.
  7. Gottlieb, Paul D. & O’Donnell, Anthony & Rudel, Thomas & O’Neill, Karen & McDermott, Melanie, 2012. "Determinants of local housing growth in a multi-jurisdictional region, along with a test for nonmarket zoning," Journal of Housing Economics, Elsevier, Elsevier, vol. 21(4), pages 296-309.
  8. Magliocca, Nicholas & McConnell, Virginia & Walls, Margaret & Safirova, Elena, 2012. "Zoning on the urban fringe: Results from a new approach to modeling land and housing markets," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 198-210.
  9. Lewis, David J. & Provencher, Bill & Butsic, Van, 2008. "The Dynamic Effects of Open-Space Conservation Policies on Residential Development Density," Staff Paper Series 522, University of Wisconsin, Agricultural and Applied Economics.
  10. Banzhaf, H. Spencer & Lavery, Nathan, 2010. "Can the land tax help curb urban sprawl? Evidence from growth patterns in Pennsylvania," Journal of Urban Economics, Elsevier, vol. 67(2), pages 169-179, March.
  11. Elizabeth C. Delmelle & Yuhong Zhou & Jean-Claude Thill, 2014. "Densification without Growth Management? Evidence from Local Land Development and Housing Trends in Charlotte, North Carolina, USA," Sustainability, MDPI, Open Access Journal, vol. 6(6), pages 3975-3990, June.
  12. Lewis, David J. & Provencher, Bill & Butsic, Van, 2009. "The dynamic effects of open-space conservation policies on residential development density," Journal of Environmental Economics and Management, Elsevier, vol. 57(3), pages 239-252, May.
  13. Lichtenberg, Erik, 2008. "Open Space and Urban Sprawl: The Case of the Maryland Forest Conservation Act," Working Papers 37812, University of Maryland, Department of Agricultural and Resource Economics.
  14. Sims, Katharine R.E. & Schuetz, Jenny, 2009. "Local regulation and land-use change: The effects of wetlands bylaws in Massachusetts," Regional Science and Urban Economics, Elsevier, vol. 39(4), pages 409-421, July.
  15. Walls, Margaret, 2012. "Markets for Development Rights: Lessons Learned from Three Decades of a TDR Program," Discussion Papers, Resources For the Future dp-12-49, Resources For the Future.
  16. Lichtenberg, Erik, 2011. "Open Space and Urban Sprawl: The Effects of Zoning and Forest Conservation Regulations in Maryland," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 40(3), December.
  17. Tsekeris, Theodore & Geroliminis, Nikolas, 2013. "City size, network structure and traffic congestion," Journal of Urban Economics, Elsevier, vol. 76(C), pages 1-14.

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