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Agricultural preservation, large-lot zoning, and real estate development in New Jersey, USA

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  • Paul Gottlieb

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    Abstract

    All developed countries have programs designed to help agricultural landscapes withstand market forces that might otherwise eliminate them. In peri-urban areas within the United States, minimum lot size zoning is a common tool designed to achieve this objective. Along with differential tax assessment and the purchase of development rights, minimum lot size zoning is a key element in many rural preservation programs. It is generally a local government prerogative, meaning that it is enacted at the county level in some states and at the municipal level in others. Large-lot zoning may be evaluated on a number of criteria, including equity outcomes and the supply of affordable housing. An understudied aspect of large-lot zoning is its effect on landscape change at the municipal level. On the one hand, a minimum lot size constraint on newly-constructed homes should reduce the number of local housing starts. Assuming that the main goal of such a policy is to postpone development in the interest of agricultural preservation, this is exactly what the policy intends. On the other hand, those homes that are built will presumably have larger front and backyards than would be the case in the absence of the lot size constraint. This is a potential unintended consequence of lot-size zoning policies. Not only that, it is the very essence of ?urban sprawl? -- a style of low-density development that is widespread in the US, but which is criticized for being socially, environmentally, and fiscally inefficient. This paper will present empirical results on zoning policies and development outcomes in 83 municipalities in northwestern New Jersey, USA. All 83 municipalities retained local control over zoning during the study period (although they subsequently lost some of these powers to a regional planning body). The dataset used for this study is uniquely suited for its intended purpose. It includes panel data on local zoning, open space acquisition, housing starts, and changes in landscape cover derived from aerial photography. It therefore addresses the so-called ?backyard problem? directly, while also deploying enough data to handle the expected endogeneity between residential development and zoning regulations.

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    Bibliographic Info

    Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa13p513.

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    Date of creation: Nov 2013
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    Handle: RePEc:wiw:wiwrsa:ersa13p513

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    References

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    1. Brian Roe & Elena G. Irwin & Hazel A. Morrow-Jones, 2004. "The Effects of Farmland, Farmland Preservation, and Other Neighborhood Amenities on Housing Values and Residential Growth," Land Economics, University of Wisconsin Press, University of Wisconsin Press, vol. 80(1), pages 55-75.
    2. Hamilton, Bruce W, 1976. "Capitalization of Intrajurisdictional Differences in Local Tax Prices," American Economic Review, American Economic Association, American Economic Association, vol. 66(5), pages 743-53, December.
    3. Erik Lichtenberg & Ian Hardie, 2007. "Open Space, Forest Conservation, and Urban Sprawl in Maryland Suburban Subdivisions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 89(5), pages 1198-1204.
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    5. Quigley, John M. & Rosenthal, Larry A., 2005. "The Effects of Land-Use Regulation on the Price of Housing: What Do We Know? What Can We Learn?," Berkeley Program on Housing and Urban Policy, Working Paper Series, Berkeley Program on Housing and Urban Policy qt90m9g90w, Berkeley Program on Housing and Urban Policy.
    6. Pasha, Hafiz A., 1996. "Suburban Minimum Lot Zoning and Spatial Equilibrium," Journal of Urban Economics, Elsevier, vol. 40(1), pages 1-12, July.
    7. Raup, Philip M., 1975. "Urban Threats To Rural Lands: Background And Beginnings," Staff Papers, University of Minnesota, Department of Applied Economics 13606, University of Minnesota, Department of Applied Economics.
    8. William Lockeretz, 1989. "Secondary Effects on Midwestern Agriculture of Metropolitan Development and Decreases in Farmland," Land Economics, University of Wisconsin Press, University of Wisconsin Press, vol. 65(3), pages 205-216.
    9. Xiangping Liu & Lori Lynch, 2010. "Do Zoning Regulations Rob Rural Landowners' Equity?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 93(1), pages 1-25.
    10. Hans R. Isakson, 2004. "Analysis of the Effects of Large Lot Zoning," Journal of Real Estate Research, American Real Estate Society, American Real Estate Society, vol. 26(4), pages 397-416.
    11. Walls, Margaret & McConnell, Virginia & Kopits, Elizabeth, 2005. "Zoning, TDRs, and the Density of Development," Discussion Papers, Resources For the Future dp-05-32, Resources For the Future.
    12. 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.
    13. R Pendall, 1999. "Do land-use controls cause sprawl?," Environment and Planning B: Planning and Design, Pion Ltd, London, Pion Ltd, London, vol. 26(4), pages 555-571, July.
    14. Moss, William G., 1977. "Large lot zoning, property taxes, and metropolitan area," Journal of Urban Economics, Elsevier, vol. 4(4), pages 408-427, October.
    15. Douglas J. Miller & Andrew J. Plantinga, 1999. "Modeling Land Use Decisions with Aggregate Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, Agricultural and Applied Economics Association, vol. 81(1), pages 180-194.
    16. Thorson, James A., 1997. "The Effect of Zoning on Housing Construction," Journal of Housing Economics, Elsevier, Elsevier, vol. 6(1), pages 81-91, March.
    17. Newburn, David A. & Berck, Peter, 2011. "Growth Management Policies for Exurban and Suburban Development: Theory and an Application to Sonoma County, California," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, Northeastern Agricultural and Resource Economics Association, vol. 40(3), December.
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