Addressing Growth and Sprawl: Review of Current Research Prepared for the: National Public Policy Education Conference September 21-24, 2003 Salt Lake City, Utah Stephan J. Goetz, Ph.D. Director, The Northeast Regional Center for Rural Development and Professor of Agricultural and Regional Economics, Penn State University

Presentation Outline 1. Land Use Trends and Issues 2. Determinants (consumer choices) 3. Consequences (how do we draw attention to the issues?) 4. Possible Solutions to Land Use Problems 5. On-Going Research The Northeast Regional Center for Rural Development

1. Some Key Land Use Trends and Issues… Land on the urban fringe is cheaper, valued highly by homebuyers (a private benefit) Land on the urban fringe is cheaper, valued highly by homebuyers (a private benefit) Farmers sell land when the amount offered exceeds profits from agriculture plus non- pecuniary benefits (this raises many questions) Farmers sell land when the amount offered exceeds profits from agriculture plus non- pecuniary benefits (this raises many questions) Current residential development is widely perceived to have negative public impacts Current residential development is widely perceived to have negative public impacts Major concern over irreversibility Major concern over irreversibility The Northeast Regional Center for Rural Development

Developed Land: Top Ten States Rank Acres of Developed Land in 1997 Pct Non-Federal Land that was Developed Land in 1997 Total Acres of Land Developed, TexasCaliforniaFloridaPennsylvaniaGeorgia North Carolina OhioMichigan New York Illinois New Jersey Rhode Island MassachusettsConnecticut Puerto Rico MarylandDelawareFloridaPennsylvaniaOhioTexasGeorgiaFloridaCaliforniaPennsylvania North Carolina TennesseeOhioMichigan South Carolina

Source: Jill Schwartz, 2003, AFT

Another key land use trend… Second or seasonal homes are an increasingly important rural land use Second or seasonal homes are an increasingly important rural land use In some areas long-time residents are being driven out by newcomers, as local property values escalate (gentrification) In some areas long-time residents are being driven out by newcomers, as local property values escalate (gentrification) Trend driven by baby boomers, who are retiring into non-traditional areas? Trend driven by baby boomers, who are retiring into non-traditional areas? Accelerating since 9/11 and stock market retraction? Accelerating since 9/11 and stock market retraction? The Northeast Regional Center for Rural Development

2.Determinants or drivers of current land use patterns… Household/population numbers, growing incomes Changing tastes and preferences (open space) Societal trends (single-person households) Technological change Farm profitability, niche markets Urban decay Community planning (lack thereof) Federal, state and local laws; home rule The Northeast Regional Center for Rural Development

Determinants of new home construction, Bars show standardized estimates from a linear regression equation. Northeast US counties only. *Statistically different from zero The Northeast Regional Center for Rural Development

3.Consequences of current land uses/lifestyle choices (hypotheses) Growing traffic congestion Growing traffic congestion Population health Population health Environmental effects Environmental effects Social and economic effects Social and economic effects Housing values Housing values The Northeast Regional Center for Rural Development

Possible health consequences of current land use patterns Increasing levels of pollution (EPA) – suspended particles (soot) Growing incidence of asthma in small children Atlanta Olympics – natural experiment Cancer risk rate map Growing incidence of obesity, diabetes The Northeast Regional Center for Rural Development

Reduction in selected variables during the 1996 Olympics, Atlanta, GA, in percent Source: Friedman et al., 2001 (CDC/JAMA)

Impact of residential choice on mode of transport of school children Percent of school age children walking to school as a function of distance between home and school

Impact of residential choice on weight (obesity) Residents of “most sprawling” community weigh 6.3 lbs more than residents of Manhattan, NY (the most dense or least-sprawling place); Reid Ewing Residents of “most sprawling” community weigh 6.3 lbs more than residents of Manhattan, NY (the most dense or least-sprawling place); Reid Ewing

Economic impacts of agriculture (as a type of land use) Underestimated? Underestimated? Source: The Northeast Center/E. Tavernier, 2002 Source: The Northeast Center/E. Tavernier, 2002 CT NJ NY PA Output Value Added Employ- ment Agriculture Sector Multipliers State

How land use affects housing values R. Ready and C. Abdalla, Berks County,PA Study (funded by The Northeast Center), June 2003 R. Ready and C. Abdalla, Berks County,PA Study (funded by The Northeast Center), June 2003 –Examines impacts of alternative land uses on housing values (incl. open space) Elena Irwin, Land Economics, Nov Elena Irwin, Land Economics, Nov –Permanent preservation of open space yields a premium on home values

The Northeast Regional Center for Rural Development …but, is housing development also economic development? Do counties that issue building permits at faster rates relative to the existing stock of homes also experience faster per capita income growth over time?

Per Capita Income Growth vs. Building Permit Rate ( ): All Northeast Counties The Northeast Regional Center for Rural Development

Per Capita Income Growth vs. Building Permit Rate: Suburbs (Non-Metro Adjacent Counties) The Northeast Regional Center for Rural Development

Per Capita Income Growth vs. Building Permit Rate: Remote Rural Counties (non-metro non- adjacent) The Northeast Regional Center for Rural Development

4. Possible “solutions” to sprawl Outlaw sprawl; enforce “smart growth” Outlaw sprawl; enforce “smart growth” Use European model of property rights Use European model of property rights Raise gas taxes, stop new highway construction Raise gas taxes, stop new highway construction Eliminate home rule Eliminate home rule Use incentive payments and/or regulations Use incentive payments and/or regulations Multi-functionality: Make green payments Multi-functionality: Make green payments …in practice, the first four options may not be feasible The Northeast Regional Center for Rural Development

5.On-Going Research Determinants of new home construction (nation-wide) Determinants of new home construction (nation-wide) Second home locations and their impacts Second home locations and their impacts Trade, land use and the environment workshop (2004) Trade, land use and the environment workshop (2004) The future viability of agriculture The future viability of agriculture

What are Society’s Objectives for How Land is Used? What are Society’s Objectives for How Land is Used? –Protect acres of farmland, food supply? –Protect farm families? –Provide rural employment? –Provide environmental benefits, scenic vistas? –Maintain/improve health of the population? –Encourage/support home ownership? Confusion abounds with regard to … what, where, and how to save or to use land resources. Paul W. Barkley

What are homebuyers’ residential preferences and how do they compare with actual residential choices available? What are homebuyers’ residential preferences and how do they compare with actual residential choices available? What is driving suburbanization? What is driving suburbanization? –Search for better schools? –Desire for green space? –Low-maintenance, newer, bigger homes? –Urban decay, crime, poverty? –Desire to drive more (SUVs)?

What are the full benefits and costs of alternative patterns of development? Who benefits, who loses from land preservation programs? Which public policy objectives can be met by different portfolios of land use policies?

Summary

Traffic Patterns/ Congestion Environmental Consequences (air, land, water) Health Impacts Data sets Fiscal Impacts Economic Impacts (consumer well-being) Households Preferences Incomes Numbers Technological change Niche markets Farm profitability Economic vitality Urban decay Federal subsidies Institutions/laws Geography Other Social Impacts Determinants and Impacts of Alternative Land Uses The Northeast Regional Center for Rural Development Benefits and Costs of Alternative Patterns of Development Pattern of Development Ecosystem Impacts Determinants of Land Use Changing Land Use

Other Resources from The Northeast Center Land Use Annual Research Workshop Proceedings Land Use Annual Research Workshop Proceedings –2001: Orlando, Fl –2002: Camp Hill, PA –2003: Manchester, NH Special Issue of Agricultural and Resource Economics Review (April 2003) Special Issue of Agricultural and Resource Economics Review (April 2003)