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

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.