SPACE AND TIME: A COMPETING RISKS ANALYSIS OF THE IMPACT OF PROPERTY TAXES AND ZONING RESTRICTIONS ON RESIDENTIAL DEVELOPMENT

Property taxes and zoning restrictions are prevalent tools for managing land use. We combine microlevel data on residential subdivision development from the Baltimore, Maryland, metro area from 1994 to 2007 with a competing risks model to examine how both policies influence the density and timing of...

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Bibliographic Details
Published in:International economic review (Philadelphia) 2019-08, Vol.60 (3), p.1097-1130
Main Authors: Wrenn, Douglas H., Klaiber, H. Allen
Format: Article
Language:English
Subjects:
Competing risks models
Density
Economic theory
Housing developments
Land subdivision
Land use
Property
Property taxes
Taxation
Zoning
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Summary:Property taxes and zoning restrictions are prevalent tools for managing land use. We combine microlevel data on residential subdivision development from the Baltimore, Maryland, metro area from 1994 to 2007 with a competing risks model to examine how both policies influence the density and timing of residential development. Consistent with theory, we demonstrate that the impact of both policies on optimal density and timing depends on whether density and time are substitutes or complements in the profit function. Our results have important implications as they provide key empirical insights into how property taxes and zoning interact to influence development patterns.
ISSN:0020-6598
1468-2354
DOI:10.1111/iere.12380