Pay or Waive: An Economic Assessment of Property Owner Compensation Laws in the U. S. Public Deposited

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This is a pre-copy-editing, author-produced PDF of an article accepted for publication in Review of Environmental Economics and Policy, following peer review. The published article is copyrighted by the Author(s) and published by Oxford University Press on behalf of the Association of Environmental and Resource Economists. The definitive publisher-authenticated version is available online at:


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  • Land-use regulations are contentious everywhere because of their potential negative effects on private property values. In recent years, “pay or waive” compensation legislation has been passed in a number of U.S. states, requiring governments to compensate property owners for losses due to land-use regulations or grant exemptions from the regulations in lieu of compensation. We provide an overview of the compensation statutes in six U.S. states, discuss the economic issues raised by the statutes, and examine the effects of the statutes in practice. Although these laws require that “just compensation” be estimated accurately and consistently, measuring the effects of land-use regulations on property values is extremely challenging in practice. We find that rather than providing relief to property owners unfairly burdened by land-use regulations, the compensation statutes appear primarily to discourage local governments from developing and implementing land-use regulations.
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  • Grout, C., Plantinga, A. J., & Jaeger, W. K. (2014). Pay or Waive: An Economic Assessment of Property Owner Compensation Laws in the United States. Review of Environmental Economics and Policy, 8(1), 103-119. doi:10.1093/reep/ret019
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  • 8
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  • 1
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