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The Trade-off between Private Lots and Public Open Space in Subdivisions at the Urban-Rural Fringe

Author

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  • Elizabeth Kopits
  • Virginia McConnell
  • Margaret Walls

Abstract

In many communities on the urban–rural fringe, subdivisions are subject to “clustering” rules, in which houses must be located on a portion of the total land area and the remainder of the land is left as open space. This open space may be undisturbed forest or pastureland, or it may include recreation facilities and trails. In some communities, the open space may remain in agricultural use as pasture or cropland. Although the open space may provide benefits to subdivision residents, it means that those residents are living in a higher-density setting than people living in conventional subdivisions. It is unclear whether the benefits offset the loss experienced by smaller lots and higher density. This trade-off is the focus of our study. We use data on subdivision house sales occurring between 1981 and 2001 in a county on the fringe of the Washington, DC, metropolitan area to estimate a hedonic price model. We examine how households value being adjacent to open space and having more open space in the subdivision, and how they may be willing to trade off those amenities with their own private lot space. We find that private acreage matters to households—a 10 percent larger lot leads to about a 0.6 percent higher house price, all else being equal. Subdivision open space is also valuable to households, but the marginal effect is much smaller than the marginal effect of private lot space. We also find that subdivision open space does substitute for private land, but the extent of the trade-off is small. We use the results of the estimated hedonic model to simulate the effects on prices of jointly increasing open space and reducing average lot size, holding the size of the subdivision constant. We find that average house prices are lower with clustering, particularly for interior lots that are not adjacent to open space.
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Suggested Citation

  • Elizabeth Kopits & Virginia McConnell & Margaret Walls, 2007. "The Trade-off between Private Lots and Public Open Space in Subdivisions at the Urban-Rural Fringe," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(5), pages 1191-1197.
  • Handle: RePEc:oup:ajagec:v:89:y:2007:i:5:p:1191-1197
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    File URL: http://hdl.handle.net/10.1111/j.1467-8276.2007.01083.x
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    References listed on IDEAS

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    1. Paul Thorsnes, 2002. "The Value of a Suburban Forest Preserve: Estimates from Sales of Vacant Residential Building Lots," Land Economics, University of Wisconsin Press, vol. 78(3), pages 426-441.
    2. Luc Anselin, 1988. "Model Validation in Spatial Econometrics: A Review and Evaluation of Alternative Approaches," International Regional Science Review, , vol. 11(3), pages 279-316, December.
    3. Elena G. Irwin, 2002. "The Effects of Open Space on Residential Property Values," Land Economics, University of Wisconsin Press, vol. 78(4), pages 465-480.
    4. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    5. Song, Yan & Knaap, Gerrit-Jan, 2004. "Measuring the effects of mixed land uses on housing values," Regional Science and Urban Economics, Elsevier, vol. 34(6), pages 663-680, November.
    6. Robert W. Paterson & Kevin J. Boyle, 2002. "Out of Sight, Out of Mind? Using GIS to Incorporate Visibility in Hedonic Property Value Models," Land Economics, University of Wisconsin Press, vol. 78(3), pages 417-425.
    7. Ian Hardie & Erik Lichtenberg & Cynthia J. Nickerson, 2007. "Regulation, Open Space, and the Value of Land Undergoing Residential Subdivision," Land Economics, University of Wisconsin Press, vol. 83(4), pages 458-474.
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    Citations

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    Cited by:

    1. Zipp, Katherine Y. & Lewis, David J. & Provencher, Bill, 2017. "Does the conservation of land reduce development? An econometric-based landscape simulation with land market feedbacks," Journal of Environmental Economics and Management, Elsevier, vol. 81(C), pages 19-37.
    2. Abbott, Joshua K. & Klaiber, H. Allen, 2010. "Is all space created equal? Uncovering the relationship between competing land uses in subdivisions," Ecological Economics, Elsevier, vol. 70(2), pages 296-307, December.
    3. repec:bla:growch:v:48:y:2017:i:1:p:127-152 is not listed on IDEAS
    4. James R. Wasson & Donald M. McLeod & Christopher T. Bastian & Benjamin S. Rashford, 2013. "The Effects of Environmental Amenities on Agricultural Land Values," Land Economics, University of Wisconsin Press, vol. 89(3), pages 466-478.
    5. Pam Guiling & B. Wade Brorsen & Damona Doye, 2009. "Effect of Urban Proximity on Agricultural Land Values," Land Economics, University of Wisconsin Press, vol. 85(2), pages 252-264.
    6. Kuminoff, Nicolai V., 2009. "Using a Bundled Amenity Model to Estimate the Value of Cropland Open Space and Determine an Optimal Buffer Zone," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 34(1), April.
    7. JunJie Wu & Wenchao Xu & Ralph J. Alig, 2016. "How Do the Location, Size and Budget of Open Space Conservation Affect Land Values?," The Journal of Real Estate Finance and Economics, Springer, vol. 52(1), pages 73-97, January.
    8. JunJie Wu & Wenchao Xu & Ralph Alig, 2016. "How Do the Location, Size and Budget of Open Space Conservation Affect Land Values?," The Journal of Real Estate Finance and Economics, Springer, vol. 52(1), pages 73-97, January.

    More about this item

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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