The Impact of an Urban Growth Boundary on Land Development in Knox County, Tennessee: A Comparison of Two-Stage Probit Least Squares and Multilayer Neural Network Models

Article excerpt

The impact of an urban growth boundary (UGB) on land development in Knox County, TN is estimated via two-stage probit and neural-network models. The insignificance of UGB variable in the two-stage probit model and more visible development patterns in the western part of Knoxville and the neighboring town of Farragut during the post-UGB period in both models suggest that the UGB has not curtailed urban sprawl. Although the network model is found to be a viable alternative to more conventional discrete choice approach for improving the predictability of land development, it is at the cost of evaluating marginal effects.

Key Words: land development, multilayer neural network, two-stage probit least squares

JEL Classifications: C35, R14

During the 15-year period from 1982 to 1997, the developed area of Tennessee increased by 58%, from 1.5 to 2.4 million acres. This increase was the seventh largest among all 50 states and was much greater than the national rate of 34% for the time period. It was largely due to the conversion of land from agriculture and forests to residential use. Of the 870,000 acres developed between 1982 and 1997, about 340,000 acres, or 39%, was converted from prime farmland, including cropland and pastureland. Tennessee nearly doubled the rate of development of farmland, forests, and other open space during the 1990s, from 46,000 acres per year between 1982 and 1992 to 80,000 acres per year between 1992 and 1997 (NRCS).

One response to the rapid land development in Tennessee was the creation of the Growth Policy Act, implemented in 1998, requiring all counties and the cities within them to collaborate in defining urban growth boundaries (UGBs). Each county, and towns and the cities within the respective county, identified three classifications of land: rural areas, UGBs, and planned growth areas (PGAs). Rural areas included land to be preserved for farming, recreation, and other nonurban uses. The land within UGB was expected to be reasonably compact but adequate to accommodate all of the city's expected growth for the next 20 years. PGAs were supposed to be large enough to accommodate growth expected to occur in unincorporated areas over the next 20 years (MPC 2001). The deadline for completing and approving all plans was July 1, 2001 (TACIR).

The City of Knoxville adopted a UGB in January, 2001. The UGB in Knoxville did not provide public facilities and subsidies inside the UGB to encourage development. Further, the UGB of Knoxville was drawn in response not only to concerns over growth management, but also to the fallout from local annexation battles. As a result of the local annexation battles, the Knoxville city government acquired the right to annex land parcels within the UGB boundary without the consent of landowners, which was another important provision of Knoxville's UGB. Cho et al. conducted the only published analysis of the impacts of UGBs in Tennessee. They estimated the effects of UGB on land development in Knox County, TN using a heteroscedastic probit model and concluded that with combined effects of increased land development within the city boundary and decreased development within the UGB and the neighboring town of Fanagut after the implementation of UGB, the UGB of Knox County has been successful in urban revitalization within the city boundary and discouraging urban sprawl. However, three issues may have affected their results. They are addressed in the models described below and estimated with the same data set which lead to different inferences about the effects of UGB.

First, their study does not compare spatial distributions of predicted land development before and after the UGB. The change in spatial distribution for the predicted development between the pre-UGB and post-UGB periods is an important benchmark for the evaluation of the boundary.

Second, simultaneity needs to be addressed. Specifically, the appraised value of land parcel, treated as an exogenous variable in Cho et al. …