Influence of Zoning Regulations on Land and Housing Prices.
Author(s):
Peterson, George E.
Publication Date:
7/1/1974
Performing Organization(s):
Urban Institute Washington, DC
Availability:
Available from: Urban Institute, 2100 M Street, NW, Washington, DC 20037.
Notes:
Working paper no. 1207-24. CP
Descriptors:
Zoning. Zoning regulations. Housing costs. Property value appreciation.
Abstract:
The conclusion of well - known studies of the effects of zoning on property values is that zoning rules have little influence. This conclusion, however, is attributable to an excessively aggregated view of how housing markets work; once the separate effects of zoning are carefully distinguished, zoning rules are shown to have substantial effects on market prices. In principle, zoning rules should affect housing values through "land - use constraint" effects, "externality" effects, and "fiscal" effects, but the relative importance of these price effects should differ for different classes of properties. Empirical estimates of the effects of zoning regulations on single - family home values are based on an analysis of the prices of 1,498 single - family homes in 9 suburban towns of the Boston, Mass., area. The nine towns are Bedford, Belmont, Concord, Lincoln, Reading, Stoneham, Wakefield, Wellesley, and Weston. The sample comprises all of the single-family homes in thse towns which were sold during 1971, except in the two larger towns of Belmont and Wellesley, where random street sampling was used to include approximately 50 percent of the homes transferred in that year. A separate sample includes 68 vacant land sales within the same towns. Direct price effects after control for neighborhood variables proved substantial. A large, 50 year - old frame house, for example, is worth $2,200 or 8 percent more if it is located in an area that permits conversions to two - family use than if it is in an area zoned for single - family homes only. Basically, the net effect on property values of more restrictive zoning is clearly negative. Diagrams, tables, footnotes, and 15 references are supplied.
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