Zoning, TDRs and the density of development

Abstract

Many communities on the urban fringe are implementing a range of policies to preserve farmland and open space, cluster residential development, and guide development to areas with existing infrastructure. These efforts are an attempt to control overall growth and the concomitant loss in open space and also to counter a trend toward the so-called large lot development that often takes place in these areas. Planners have argued that policies to manage density are the most important local policy focus for urban areas in the coming years.It is possible that large lot development and sprawl are themselves the result of government policy. Most local governments use zoning to establish minimum acreage requirements for each residential dwelling unit; in ex-urban localities, these limits are often quite high. Developers might build a subdivision with average lot sizes greater than the minimum but they cannot by law go below it. Some researchers have argued, however, that the spatial patterns of development are simply the natural result of household preferences and market forces.In this paper, we address the question of whether zoning limits are the primary cause of lowdensity, sprawling development or whether market forces tend to dictate this outcome. If zoning limits account for low-density development in at least some cases, how would development patterns be different if there had been no such rules? We begin by constructing a simple model of the developer decision about the density of new development. The subdivision is the unit of observation, and developers must weigh both demand and cost considerations in choosing density, in addition to complying with zoning restrictions that vary across parcels. We apply the model using parcel-level data from a region where zoning rules vary but are exogenous to the period under study. Calvert County, Maryland, near Washington, DC, is an historically rural county that has experienced rapid growth in recent years. The county has a transferable development rights (TDRs) program that has led to a great deal of variability in the intensity of development across properties. We are able to not only examine the extent to which zoning has contributed to large lot development but also to determine the economic forces that underlie density decisions. Finally, we are able to forecast how density would have been different in the absence of zoning rules by estimating a Tobit equation that is censored for the observations constrained by zoning.

The evolution of urban sprawl: Evidence of spatial heterogeneity and increasing land fragmentation

“…Because roads follow development and development follows roads (47), a positive estimate is consistent with concentrated development attracting roads as well as roads spurring concentrated development. Likewise, although zoning affects the pattern and likelihood of development (48,49), zoning changes are also responsive to the land market (50). Here we find a result that is consistent with minimum lot size increasing fragmentation, but it's unclear whether this result would hold once the endogeneity of zoning is controlled.…”

The dynamic effects of open-space conservation policies on residential development density

“…Fourth, while the parameter estimates for most parcel-specific characteristics are significantly different from zero, many of the lake-specific characteristics do not significantly impact the probability of subdivision or the expected number of new parcels created upon subdivision. 20 22 On the other hand, if parcel frontage is a complement to open space, then an increase in protected open space may reduce or have no effect on both the probability of subdivision and the number of parcels created upon subdivision.…”

Densification without Growth Management? Evidence from Local Land Development and Housing Trends in Charlotte, North Carolina, USA

“…Profits accrued from developing a site are a function of the potential revenue, minus the costs associated with developing the site where revenue is contingent upon the number of lots built, the total size of the development site, as well as other natural amenities, surrounding land uses and accessibility. Costs to the developer stem from the number of lots, the price of land (or the size of the development), the cost of providing infrastructure to the site, and the shape of the parcel to be subdivided [27].…”