Land use policy and property value Public Deposited

http://ir.library.oregonstate.edu/concern/graduate_thesis_or_dissertations/12579v40b

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  • A plethora of land use policies are implemented at the local, state, and federal levels to influence the manner in which land is utilized. The distribution of the costs and benefits associated with implementing such land use policies always has been, and will continue to be, a source of contention. The three essays presented in this dissertation explore two types of land use policies: state and local-level land use regulations that restrict the use of land and incentives for voluntary conservation. The first essay addresses the economic issues that arise from the adoption of state-level compensation legislation, which requires a government entity to pay compensation to a property owner when the value of his property has been reduced by the enactment of a land use regulation. An assumption implicit to the idea of compensation is that effect of a land use regulation on a property's value is observable and can be accurately estimated. This assumption is problematic due to the complex interaction of land use regulations and land use decisions, and the market's anticipation of both future regulation and potential payments of compensation. Supposing that the price effects of regulation could be accurately estimated, the scope of compensation statutes is too narrow to consistently identify and appropriately compensate landowners who have been most heavily burdened by land use regulation. Economists investigating the effect of land use regulation on property value have typically estimated hedonic property value models with regulations included as exogenous regressors. This approach is likely to be invalid if parcel characteristics that determine property values also influence the government's decision about how to implement regulations. The second essay uses Regression Discontinuity Design (RDD) to study the effect of the Portland, Oregon, Urban Growth Boundary (UGB) on property values. RDD provides an unbiased estimate of the treatment effect under relatively mild conditions and is well-suited to our application because the UGB defines a sharp treatment threshold. We find a price differential on the western and southern sides of the Portland metropolitan area ranging from $30,000 to at least $140,000, but no price differential on the eastern side. Voter support for Measure 37, a compensation statute approved by Oregon voters in 2004, was fueled by price differences such as these among parcels subject to different regulations, but one must be careful not to view current price differentials as evidence that regulations have reduced property values. The third essay considers an incentive mechanism designed to encourage spatially coordinated land conservation: the agglomeration bonus. The primary weakness of the agglomeration bonus as it has been represented in the literature is that it requires landowners to coordinate land use decisions amongst each other, potentially resulting in coordination failure. The functionality of the agglomeration bonus is improved by allowing landowners' enrollment decisions to be conditional on surrounding patterns of enrollment. Under a conditional agglomeration bonus, a landowner's enrollment decision is determined entirely by his own private costs and benefits, eliminating the potential for coordination failure.
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  • description.provenance : Approved for entry into archive by Julie Kurtz(julie.kurtz@oregonstate.edu) on 2010-09-01T16:04:37Z (GMT) No. of bitstreams: 1 Dissertation Cyrus Grout 8-18-2010.pdf: 1590716 bytes, checksum: 29a44d2c3796a966f09eb91a530b8446 (MD5)
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