ABSTRACT
JunJie Wu Introduction This chapter describes land-use changes and regulations in five western states of the United States (Oregon, California, Idaho, Nevada, and Washington). There is a significant variation in the degree of government involvement in land-use planning and regulations in these five western states. State and local governments in Oregon and Washington are actively involved in land-use planning and regulation, while governments in Nevada and Idaho impose few land-use regulations. State and local governments in California are moderately involved in land-use planning and regulations. Thus, the study region offers an excellent ‘laboratory’ to study the effect of land-use regulations on land-use changes. However, to my knowledge, there is no economic study that provides a comprehensive survey of local land regulations at the regional or national level. While the federal government monitors trends in land-use conversions, state and local governments impose most land-use controls. The federal government has yet to articulate anything close to a clear vision of land-use policy (Daniels 1999). Despite the fact that land-use regulations are largely a local issue, relatively few studies have focused on local land-use regulations because of a lack of data. Those that do focus on land-use policies tend to be case studies of specific programs in specific areas. For example, Henderson (1991) compares the effectiveness of zoning laws, price regulation, and the shifting of fiscal burdens between existing residents and developers. He finds that traditional instruments, such as zoning, are not efficient. In a world of perfect certainty, price controls and creative fiscal arrangements produce efficient outcomes. With uncertainty over future prices, only by restructuring fiscal arrangements can the community efficiently control the developer. McMillen and McDonald (1993) examine the circumstances under which land-use zoning can increase land values and find that a necessary condition for the assignment of a block exclusively to residential use to increase land values is that residential land values rise as the proportion of the block that is in residential use increases. Their empirical results imply that the land-use zoning system could not have brought about a general increase in land values. Kline and Alig (1999)
analyze Oregon’s land-use planning program with regard to how effective it has been in protecting forests and farmland from development. Daniels (1998) examines the purchase of development rights as a tool of farmland protection in Lancaster County, Pennsylvania. The Proceedings of the 1998 National Conference on the Performance of State Programs for Farmland Retention, held in Columbus, Ohio, provide a review and evaluation of current farmland retention programs in several states (Libby et al. 1998). Daniels and Bowers (1997) describe the many challenges in farmland protection and explain how to create a package of techniques to meet those challenges. Other examples that focus on local regulations include Pfeffer and Lapping (1994), who examine programs based on the exchange of development rights in the northeastern United States, and Lang and Hornburg (1997), who analyze urban growth management in Portland, Oregon. A common characteristic of these studies is that they focus on a specific program in a specific region. However, because many regulations share common objectives and are implemented simultaneously, it is difficult to isolate the effect of a specific program on land development. Economic studies on land use along the rural-urban fringe are also limited, despite the fact that the accelerated loss of farmland and open space to development has generated strong public support for growth management in the U.S. In the 1998-2000 U.S. elections, hundreds of local and statewide initiatives for growth management were put on ballots, and a majority of these initiatives were passed. These reactions were hardly surprising given the strong sentiment against sprawl. It is claimed that sprawl is ugly, that it eats up farmland, reduces amenities and open space, increases public service costs and taxes, causes traffic jams, increases urban runoff and flooding, and reduces wildlife habitat and water quality. Sprawl is even blamed for causing obesity, apathy, and antisocial behavior. In stark contrast to this emotionally-charged indictment of sprawl, many economists believe that urban spatial patterns are a result of a market process that allocates land between urban and agricultural uses. For example, Brueckner (2000) argues that urban spatial expansion is mostly benign. After all, people like big houses, large yards, proximity to amenities, the convenience of shopping malls, and other benefits associated with sprawl. Thus, to a large extent, sprawl is a result of consumer choices. The stakes are high in this debate on the costs and benefits of urban sprawl. Policy measures designed to curb urban sprawl will ultimately affect a key element of American lifestyle, the consumption of a large amount of living space at affordable prices (Brueckner 2000). To fully understand the costs and benefits of urban sprawl and the nature of any anti-sprawl policy, we must first understand the causes of urban sprawl. Despite the importance of this issue, there is no convincing economic theory for explaining fragmented, leapfrog development in the rural-urban fringe. Mills (1981) examines sprawl in a monocentric city and attributes it to landowner decisions to preserve a ring of undeveloped land for future use. The Mills study, however, does not capture the complexity of urban sprawl and the phenomena that has been characterized as ‘an economic system gone awry.’ Brueckner (2000) argues that urban spatial expansion results mainly
from a growing population, rising income, and falling commuting costs, as has been discussed in earlier chapters. However, as with other studies on urban spatial structures, he does not provide an explanation for leapfrog development in the rural-urban fringe. Landis (1995) and Landis and Zhang (1998) develop empirical models to predict land development at the individual parcel level based on economic and/or location variables, but do not explain the endogenous process of the formation of urban spatial structure. Below, we first describe the land-use changes in the five western states examined, followed by a discussion of land-use regulations in the region. Results on the interactions between land-use changes and regulations in the five western states are then presented. The last section contains concluding remarks. Data The data on land-use regulations used in this study were obtained from a comprehensive survey of local land-use regulations conducted at Oregon State University between August and October of 1999. The survey was sent to all county land-use planning directors in five western states. Respondents were asked to report whether or not a particular type of land-use regulation (29 in all) was in use in their counties, and to evaluate the effectiveness of each of the regulations. The survey was conducted following Dillman’s Total Design Method (Dillman 1978). The questionnaire was designed after an extensive literature review and was pre-tested by a few selected county land-use planning directors. The questionnaire was revised based on their comments, and the revised questionnaire was sent to all county land-use planning directors in five western states. Two postcard reminders were sent to those who did not respond by two and four weeks. Telephone calls were made to those who did not respond. The overall response rate was 69 per cent. Counties of Washington had the highest response rate (87 per cent), followed by Oregon (78 per cent), Nevada (65 per cent), California (60 per cent), and Idaho (57 per cent). There were a total of 194 counties in the five western states. The data on land use were taken from the 1982 and 1992 National Resource Inventories (NRI). The NRI collected land-use data at 800,000 randomly selected sites across the continental United States and divided land use into eleven major categories (cultivated cropland, non-cultivated cropland, pastureland, rangeland, forestland, urban and built-up land, and five other categories). In this study, cultivated cropland, non-cultivated cropland, pastureland, and rangeland are categorized as farmland, and urban and built-up land is categorized as developed land. The NRI recorded land use at each site in 1982 and 1992. By comparing the land use in 1982 and 1992 at each NRI site, we estimate land-use changes over that period. Each NRI site is assigned a weight (called the expansion factor) to reflect the acreage it represents. The sampling design of the NRI ensures that inferences at the national, regional, state, and sub-state levels are made in a statistically reliable manner.
