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Residential Land-Use Controls and Land Values: Zoning and Covenant Interactions

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  • Carolyn A. Dehring
  • Melissa S. Lind

Abstract

Residential land use in urban areas can be constrained by zoning or restrictive covenants. When covenants and zoning exist simultaneously, covenants can facilitate an efficient allocation of high-restriction and low-restriction residential land. However, covenants cannot remedy deadweight loss resulting from zoning that over-allocates land to high restriction use. We examine subdivided, vacant residential lot sales from two residential zones which differ in both minimum lot size and the minimum square feet of house. Our findings of a negative price effect from covenant use in the more restricted zone suggest that private restrictions are over-supplied in that zone.

Suggested Citation

  • Carolyn A. Dehring & Melissa S. Lind, 2007. "Residential Land-Use Controls and Land Values: Zoning and Covenant Interactions," Land Economics, University of Wisconsin Press, vol. 83(4), pages 445-457.
    • Handle: RePEc:uwp:landec:v:83:y:2007:i:4:p:445-457
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    References listed on IDEAS

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    1. Speyrer, Janet Furman, 1989. "The Effect of Land-Use Restrictions on Market Values of Single-Family Homes in Houston," The Journal of Real Estate Finance and Economics, Springer, vol. 2(2), pages 117-130, June.
    2. Noelwah R. Netusil, 2005. "The Effect of Environmental Zoning and Amenities on Property Values: Portland, Oregon," Land Economics, University of Wisconsin Press, vol. 81(2).
    3. William Fischel, 1980. "Externalities and zoning," Public Choice, Springer, vol. 35(1), pages 37-43, January.
    4. 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.
    5. Fiorenza Spalatro & Bill Provencher, 2001. "An Analysis of Minimum Frontage Zoning to Preserve Lakefront Amenities," Land Economics, University of Wisconsin Press, vol. 77(4), pages 469-481.
    6. Rueter, Frederick H, 1973. "Externalities in Urban Property Markets: An Empirical Test of the Zoning Ordinance of Pittsburgh," Journal of Law and Economics, University of Chicago Press, vol. 16(2), pages 313-349, October.
    7. G. Donald Jud, 1980. "The Effects of Zoning on Single-Family Residential Property Values: Charlotte, North Carolina," Land Economics, University of Wisconsin Press, vol. 56(2), pages 142-154.
    8. Mark, Jonathan H. & Goldberg, Michael A., 1986. "A study of the impacts of zoning on housing values over time," Journal of Urban Economics, Elsevier, vol. 20(3), pages 257-273, November.
    9. Daniel P. McMillen & John F. McDonald, 1990. "A Two-Limit Tobit Model of Suburban Land-Use Zoning," Land Economics, University of Wisconsin Press, vol. 66(3), pages 272-282.
    10. Paul K. Asabere & Peter F. Colwell, 1985. "The Relative Lot Size Hypothesis: An Empirical Note," Urban Studies, Urban Studies Journal Limited, vol. 22(4), pages 355-357, August.
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    Cited by:

    1. William Rogers, 2010. "The Housing Price Impact of Covenant Restrictions and Other Subdivision Characteristics," The Journal of Real Estate Finance and Economics, Springer, vol. 40(2), pages 203-220, February.
    2. Yu-Hui Chen & Chun-Lin Lee & Guan-Rui Chen & Chiung-Hsin Wang & Ya-Hui Chen, 2018. "Factors Causing Farmland Price-Value Distortion and Their Implications for Peri-Urban Growth Management," Sustainability, MDPI, vol. 10(8), pages 1-18, August.
    3. Nairne Cameron & Carl G Amrhein & Karen E Smoyer-Tomic & Kim D Raine & Lee Yen Chong, 2010. "Cornering the Market: Restriction of Retail Supermarket Locations," Environment and Planning C, , vol. 28(5), pages 905-922, October.
    4. William H. Rogers, 2010. "Measuring the Price Impact of Municipal Incorporation on Homeowner Associations," Land Economics, University of Wisconsin Press, vol. 86(1), pages 91-116.
    5. B. James Deaton & Richard J. Vyn, 2015. "The Effect of Ontario's Greenbelt on the Price of Vacant Farmland," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 63(2), pages 185-208, June.
    6. B. James Deaton & Chad Lawley, 2022. "A survey of literature examining farmland prices: A Canadian focus," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 70(2), pages 95-121, June.

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    More about this item

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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