Academic journal article Agricultural and Resource Economics Review

Zoning, Development Timing, and Agricultural Land Use at the Suburban Fringe: A Competing Risks Approach

Academic journal article Agricultural and Resource Economics Review

Zoning, Development Timing, and Agricultural Land Use at the Suburban Fringe: A Competing Risks Approach

Article excerpt

Competing risks survival analysis is used to investigate tax and zoning policy impacts on residential, commercial, and industrial development timing in a rapidly growing Midwestern county. Industrial development appears both to precede and occur concurrently with residential development, while commercial development follows other types. Although residences appear to locate away from industrial land, zoning decisions favoring industry may attract rather than deter residential development within a jurisdiction. Regions with higher infrastructure taxes experience development later. Because school taxes fund local public goods important to homeowners, they have little influence on residential timing, but strong influences on industrial and commercial timing.

Key Words: land use change, land use policy, survival models

As economic growth in the 1990s boomed, large areas of agricultural and other undeveloped land converted rapidly to developed uses. While development outside a central city can benefit the local and regional economy (Gordon and Richardson, 2000), many authors argue there are negative impacts of rapid suburbanization, including inefficient use of land or other resources, reduced environmental quality, and congestion, among other impacts (see, for example, Hamilton and Roell, 1982; Kahn, 2000; Brueckner, 2000; Plantinga and Miller, 2001).

Concern with externalities has led policy makers to question whether existing policies inadvertently cause land to change more quickly, and whether alternative policies could slow land use change at the suburban fringe. Given the many policies available-land taxes, zoning restrictions, impact and development fees, direct land use controls, and growth boundaries-it is useful to examine how existing policies have affected land use change, and whether stricter policies could alter the timing of converting agricultural land to developed uses.

Within the literature, many theoretical studies have explored how tax policies are likely to affect the timing of land use change (e.g., Bentick, 1979; Anderson, 1986,1993; Turnbull, 1988a,b;Capozza and Li, 1994;McFarlane, 1999). Fewer studies have explored the influence of zoning on timing of land use change, although Irwin and Bockstael (2002) show land use change in one parcel can influence the timing of changes in nearby parcels. Thus, zoning policies designed to limit specific types of uses in one location can influence the timing of change on neighboring parcels.

Alternatively, Fujita, Thisse, and Zenou (1997) and Fujita, Krugman, and Venables ( 1999) argue that industrial and commercial developments outside of cities can spur positive feedbacks, potentially by raising relative real wages, and attracting further residential development. Not only can taxes influence development timing, but the type of development occurring in an area can influence the land around it.

In this study, we first present a theoretical analysis to assess how property tax millage rate and zoning policies potentially influence timing of land conversions from agricultural to residential use. An empirical analysis is then conducted using competing risks survival analysis to explore the potential effects of a range of factors on the timing of commercial, industrial, and residential developments. The empirical model examines the way certain explanatory variables influence the time to conversion for agricultural land parcels over 10 years within a fast-growing Midwestern county. The model is used to examine changes in development timing of residential, commercial, or industrial land under alternative assumptions about tax millage rates and zoning in homogeneous tax districts.

Only a few studies to date have used parcel-level data to analyze development timing (e.g., Irwin and Bockstael, 2002; Irwin, Bell, and Geoghegan, 2003), although some studies have used aggregate metropolitan-area data to explore the effects of land use regulations on residential development (e. …

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