Zoning – Neighborhood Character and Historic Overlays in Lexington, KY

Abstract

Zoning has a significant impact on our built environment. Overlay zoning, an additional form of restrictive zoning, is a tool that municipalities utilize to control development. This study analyzes the impact that historic district (H-1) and neighborhood character (ND-1) overlays have on single family home sale price in Lexington, KY. Results suggest that overlays have a significant positive impact on home prices. Homes within overlays can expect to have a premium of between 18-27% over comparable homes not in overlay zones. Results also suggest that overlays exhibit spatial impacts that extend further than the homes included in the overlay.

Keywords: Zoning, Lexington, KY, Restrictive Zoning, Historic District

JEL Classification: R3, R2