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Determinants of local housing growth in a multi-jurisdictional region, along with a test for nonmarket zoning

  • Gottlieb, Paul D.
  • O’Donnell, Anthony
  • Rudel, Thomas
  • O’Neill, Karen
  • McDermott, Melanie
Registered author(s):

    In the State of New Jersey, two rural preservation tools are paramount: (1) Zoning that sets a floor on the size of residential lots; and (2) the outright acquisition of open space or its development rights by government and nonprofit entities. The present study explores the effects of these two policies on the number of building permits issued across 83 municipalities in northern New Jersey. The empirical work is based on a widely-used urban development model that uses both monocentric and polycentric factors to allocate growth across a set of suburban communities. The study also develops a growth-based test for binding minimum-lot-size zoning, leveraging the fact that the 83 communities are in a single housing market and must serve the distribution of home and lot-size demand collectively, not individually. The study finds strong evidence of excess large-lot zoning, leading to the suppression of short-term housing growth in communities that specialize in this particular “product.” No firm evidence is found that residential development is attracted to the amenities that flow from either large-lot zoning or open space set asides.

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    File URL: http://www.sciencedirect.com/science/article/pii/S1051137712000630
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    Article provided by Elsevier in its journal Journal of Housing Economics.

    Volume (Year): 21 (2012)
    Issue (Month): 4 ()
    Pages: 296-309

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    Handle: RePEc:eee:jhouse:v:21:y:2012:i:4:p:296-309
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622881

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    4. Thorson, James A., 1997. "The Effect of Zoning on Housing Construction," Journal of Housing Economics, Elsevier, vol. 6(1), pages 81-91, March.
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    7. 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.
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    10. Carmen Carri�n-Flores & Elena G. Irwin, 2004. "Determinants of Residential Land-Use Conversion and Sprawl at the Rural-Urban Fringe," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(4), pages 889-904.
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    12. 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 qt90m9g90w, Berkeley Program on Housing and Urban Policy.
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    14. Walsh, Randy, 2007. "Endogenous open space amenities in a locational equilibrium," Journal of Urban Economics, Elsevier, vol. 61(2), pages 319-344, March.
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    16. Paul D. Gottlieb & Adesoji Adelaja, 2009. "The impact of down-zoning on land values: A theoretical approach," Agricultural Finance Review, Emerald Group Publishing, vol. 69(2), pages 206-227, July.
    17. Adelaja, Adesoji O. & Gottlieb, Paul D., 2009. "The Political Economy of Downzoning," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 38(2), October.
    18. Topel, Robert H & Rosen, Sherwin, 1988. "Housing Investment in the United States," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 718-40, August.
    19. Wu, JunJie & Plantinga, Andrew J., 2003. "The influence of public open space on urban spatial structure," Journal of Environmental Economics and Management, Elsevier, vol. 46(2), pages 288-309, September.
    20. White, James R., 1988. "Large lot zoning and subdivision costs: A test," Journal of Urban Economics, Elsevier, vol. 23(3), pages 370-384, May.
    21. Hamilton, Bruce W, 1976. "Capitalization of Intrajurisdictional Differences in Local Tax Prices," American Economic Review, American Economic Association, vol. 66(5), pages 743-53, December.
    22. Henry O. Pollakowski & Susan M. Wachter, 1990. "The Effects of Land-Use Constraints on Housing Prices," Land Economics, University of Wisconsin Press, vol. 66(3), pages 315-324.
    23. Zipp, Katherine Y. & Lewis, David J. & Provencher, Bill, 2011. "Does open space increase development?," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103626, Agricultural and Applied Economics Association.
    24. Elena G. Irwin & Nancy E. Bockstael, 2001. "The Problem of Identifying Land Use Spillovers: Measuring the Effects of Open Space on Residential Property Values," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 698-704.
    25. 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, vol. 40(3), December.
    26. Grieson, Ronald E. & White, James R., 1981. "The effects of zoning on structure and land markets," Journal of Urban Economics, Elsevier, vol. 10(3), pages 271-285, November.
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