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

19 Pages Posted: 20 Jul 2007 Last revised: 4 Dec 2008

See all articles by Elizabeth Kopits

Elizabeth Kopits

U.S. Environmental Protection Agency (EPA)

Virginia McConnell

University of Maryland; Resources for the Future

Margaret Walls

Resources for the Future - Quality of the Environment Division

Date Written: July 1, 2007

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.

Keywords: subdivisions, clustering, hedonic property values, open space

JEL Classification: Q51, Q24, R14, H41

Suggested Citation

Kopits, Elizabeth and McConnell, Virginia and Walls, Margaret, The Trade-off Between Private Lots and Public Open Space in Subdivisions at the Urban-Rural Fringe (July 1, 2007). RFF Discussion Paper No. 07-33, Available at SSRN: https://ssrn.com/abstract=1001941 or http://dx.doi.org/10.2139/ssrn.1001941

Elizabeth Kopits (Contact Author)

U.S. Environmental Protection Agency (EPA) ( email )

Ariel Rios Building
1200 Pennsylvania Ave., N.W.
Washington, DC 20460
United States

Virginia McConnell

University of Maryland ( email )

College Park
College Park, MD 20742
United States

Resources for the Future

1616 P Street, NW
Washington, DC 20036
United States

Margaret Walls

Resources for the Future - Quality of the Environment Division ( email )

1616 P Street, NW
Washington, DC 20036
United States

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