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Land Values, Land Use, and the First Chicago Zoning Ordinance

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  • McDonald, John F
  • McMillen, Daniel P

Abstract

This article examines whether the pattern of urban land use should have been regulated by local government in the 1920s, the decade in which many cities adopted their first zoning ordinances. The study is based on the assumption that land values are influenced by the mix of land use on the block. Conditions for land-value maximization are derived, and the circumstances under which land-use zoning can increase land values are discussed. Empirical land-value and land-use functions are estimated for Chicago in 1921, two years before the first Chicago zoning ordinance was adopted. The empirical results for land values imply that the land-use zoning system adopted in 1923 could not have brought about a general increase in land values. The empirical results for land use document the regularities in the use of land prior to the introduction of zoning. Copyright 1998 by Kluwer Academic Publishers

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  • McDonald, John F & McMillen, Daniel P, 1998. "Land Values, Land Use, and the First Chicago Zoning Ordinance," The Journal of Real Estate Finance and Economics, Springer, vol. 16(2), pages 135-150, March.
  • Handle: RePEc:kap:jrefec:v:16:y:1998:i:2:p:135-50
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    Cited by:

    1. Plantinga, Andrew J. & Lubowski, Ruben N. & Stavins, Robert N., 2002. "The effects of potential land development on agricultural land prices," Journal of Urban Economics, Elsevier, vol. 52(3), pages 561-581, November.
    2. Jason Barr, 2013. "Skyscrapers And Skylines: New York And Chicago, 1885–2007," Journal of Regional Science, Wiley Blackwell, vol. 53(3), pages 369-391, August.
    3. David Christafore & Susane Leguizamon, 2015. "Spatial Spillovers of Land Use Regulation in the United States," Housing Studies, Taylor & Francis Journals, vol. 30(3), pages 491-503, June.
    4. Allison Shertzer & Tate Twinam & Randall P. Walsh, 2016. "Zoning and the Economic Geography of Cities," NBER Working Papers 22658, National Bureau of Economic Research, Inc.
    5. Antonio Avendaño & Hernán Enríquez & Santiago Olarte, 2014. "Estructura urbana y precios del suelo en Bogotá," REVISTA ECONOMÍA & REGIÓN, UNIVERSIDAD TECNOLÓGICA DE BOLÍVAR, vol. 8(2), pages 49-80, December.
    6. Andrew J. Plantinga & Douglas J. Miller, 2001. "Agricultural Land Values and the Value of Rights to Future Land Development," Land Economics, University of Wisconsin Press, vol. 77(1), pages 56-67.
    7. McMillen, Daniel P. & McDonald, John F., 1999. "Land use before zoning: The case of 1920's Chicago," Regional Science and Urban Economics, Elsevier, vol. 29(4), pages 473-489, July.
    8. Jeremy R. Groves & Eric Helland, 2002. "Zoning and the Distribution of Location Rents: An Empirical Analysis of Harris County, Texas," Land Economics, University of Wisconsin Press, vol. 78(1), pages 28-44.
    9. Cho, Seong-Hoon & Wu, JunJie, 2001. "Measuring Interactions Among Urban Development, Land Use Regulations, And Public Finance," 2001 Annual meeting, August 5-8, Chicago, IL 20774, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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