Zoning on the Urban Fringe: Results from a New Approach to Modeling Land and Housing Markets

Resources for the Future Discussion Paper No. 11-32

40 Pages Posted: 5 Jun 2012 Last revised: 18 Jun 2012

Virginia McConnell

University of Maryland; Resources for the Future

Margaret Walls

Resources for the Future - Quality of the Environment Division

Elena Safirova

Resources for the Future

Nicholas Magliocca

National Socio-Environmental Synthesis Center

Date Written: May 25, 2012

Abstract

This paper uses an economic agent-based model of land use in a hypothetical urban fringe community to examine the effects of large-lot zoning on land conversion, land prices, and the spatial configuration and density of new development. The model incorporates the actions of heterogeneous housing consumers, developers, and farmer/landowners who make economic decisions in land and housing markets. The model allows for population growth and simulates the evolution of land use patterns and prices over a 20-year time period. Zoning regulations in the form of minimum lot size restrictions imposed in an outlying area are shown to have effects that vary with the stringency of the regulations: 2-acre minimum lot sizes have little effect on the spatial patterns of development, but they do increase land and housing prices and result in higher incomes in the region; 5-acre minimum lot sizes push development toward the city center, leaving agricultural land in the zoned region undeveloped until quite late in the simulation period. While house prices are higher with 5-acre zoning, land prices in the zoned region fall, highlighting the countervailing influences of lot size restrictions on land prices. The new modeling approach allows for the tracking of the transitional dynamics of development, both over space and time as the urban area grows.

Keywords: land use, agent-based model, zoning, urban sprawl

JEL Classification: R11, R12, R14, R38

Suggested Citation

McConnell, Virginia and Walls, Margaret and Safirova, Elena and Magliocca, Nicholas, Zoning on the Urban Fringe: Results from a New Approach to Modeling Land and Housing Markets (May 25, 2012). Resources for the Future Discussion Paper No. 11-32. Available at SSRN: https://ssrn.com/abstract=2076627 or http://dx.doi.org/10.2139/ssrn.2076627

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 (Contact Author)

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

1616 P Street, NW
Washington, DC 20036
United States

Elena Safirova

Resources for the Future ( email )

1616 P Street, NW
Washington, DC 20036
United States

Nicholas Magliocca

National Socio-Environmental Synthesis Center ( email )

College Park
College Park, MD 20742
United States
4109199149 (Phone)
4109199149 (Fax)

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