Source: UNIVERSITY OF TENNESSEE submitted to NRP
LAND USE CHANGE AND ITS IMPACT ON TENNESSEE'S NATURAL RESOURCES AND ENVIRONMENT
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
COMPLETE
Funding Source
HATCH
Reporting Frequency
Annual
Accession No.
0204050
Grant No.
(N/A)
Cumulative Award Amt.
(N/A)
Proposal No.
(N/A)
Multistate No.
(N/A)
Project Start Date
May 1, 2005
Project End Date
Sep 30, 2009
Grant Year
(N/A)
Program Code
[(N/A)]- (N/A)
Recipient Organization
UNIVERSITY OF TENNESSEE
2621 MORGAN CIR
KNOXVILLE,TN 37996-4540
Performing Department
Agricultural & Resource Economics
Non Technical Summary
Sustained economic growth, coupled with population and income growths, have brought about rapid changes in land use and created tremendous pressures for land use planning. These pressures have been present in the Southeast and have resulted in conflicts between development and preservation's interests. Theoretical and empirical research across a variety of disciplines has fostered a greater understanding of the importance of landscape-scale views of environmental and natural resource issues. There is both a need and an opportunity for comprehensive analyses of land use change. This project will assess detailed projections of development and density patterns and their estimated effects on environmental and natural resource conditions under different policy scenarios to forecast the effects of local policy decisions, including direct land use planning and regulation, such as zoning, and more indirect land use policies such as the provision or expansion of public infrastructure or other public services for some selected areas in Tennessee. The quantification of the effects of economic, locational, and geological features on residential development and density patterns should help decision-makers establish a land use development pattern that makes the most efficient and feasible use of existing infrastructure and public services. It also provides a guideline for new developments that maintain or enhance the quality of the study area.
Animal Health Component
80%
Research Effort Categories
Basic
20%
Applied
80%
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
1120399206033%
1310120209033%
6050530209034%
Knowledge Area
605 - Natural Resource and Environmental Economics; 112 - Watershed Protection and Management; 131 - Alternative Uses of Land;

Subject Of Investigation
0120 - Land; 0399 - Watersheds and river basins, general; 0530 - Parks and urban green space;

Field Of Science
2090 - Statistics, econometrics, and biometrics; 2060 - Geography;
Goals / Objectives
The project has two phases. The primary goal of the first phase is to project the likely density of land development at an individual parcel level. This will involve the creation of a model to predict and map spatial patterns of land use change for some selected areas in Tennessee in which both metropolitan and non-metropolitan areas will be represented. More specifically, this project will use parcel-level and census-block group level data and the Geographic Information System (GIS) to measure empirically the effects of socioeconomic and geographic characteristics on land conversion. In order to predict land conversion decisions by parcel owners who face market conditions, we will estimate a model that predicts the value of land in alternative uses. We can use these predictions to estimate the probability of a given parcel being converted, conditional upon its value in alternative uses (e.g., agriculture, forest, or residential) and its cost of conversion using an agent-based microeconomic modeling of land use change. Given the model's predictions of the likelihood of development and density of development using the parcel-based land development of the past and predicted value of land in alternative uses, we can simulate predicted patterns of development under different land use policy scenarios. The main goal of the second phase of the research is to link the predicted land use patterns to impacts on the natural resource base and environmental quality. Our project aims to integrate dynamics of land use and ecosystems (including water quality, water quantity, air quality, and wildlife habitat). We will examine quantitative, spatially explicit and dynamic linkages between land use and ecosystem structure and function. By doing so, we will quantify effects of various combinations of environmental stressors on ecosystems and how effects change with scale. We will also investigate what are the useful ways to measure changes in the total value of the landscape including both market and non-market components and the effectiveness of land use policy options toward increasing total value. The proposed objectives will be achieved by integrating results from the first phase land use projection and the second phase ecosystem model that is designed to simulate a variety of ecosystem types. The ecosystem model is designed to incorporate ecological processes that determine water quality, water quantity, air quality, and wildlife habitat.
Project Methods
The model used to project land use change will be an extension of an existing model that estimates the probability of land development of individual parcels as a function of parcel-level attributes (Bockstael, 1996). The existing model assumes that the likelihood of a parcel being developed for residential use is a function of the expected economic returns to development. Since these expected returns cannot be known with certainty, they are estimated using a hedonic model of land values. Thus, the first stage of the model uses a range of attributes associated with each parcel, such as its location relative to the central business district (CBD) and/or an environmental amenities, to estimate the value of the parcel after it has been developed. This value serves as a proxy for the expected returns to development for each parcel. In the second stage, the model predicts development as a function of these predicted land values. We will extend this model in two ways. First, we will convert the model from a two-stage model to a three-stage model to predict not only the likelihood that a parcel will be developed, but also, the likely density of that development (measured in number of housing units per acre). Second, the effect of spatial and temporal dependency will be analyzed. That is, whether or not (and how densely) neighboring parcels have been developed is likely to affect the likelihood that a parcel will be developed (and how densely it will be developed). In the first stage, we will employ a hedonic model to estimate residential land value. We will also develop a simple function for predicting the value of land in alternative uses (i.e., agricultural and forest) as a function of quality of the soil, its slope, and its erosiveness and flooding potential, proximity to various geographical features, and preferences of both buyers and sellers of land. We use these estimated values as proxies for the expected return to development in both the second and third stages. The second phase of the project will use these projections to estimate the effect of land use change on Tennessee's environmental and natural resources under different policy scenarios. Spatially explicit models that link land use changes and these changes to environmental changes under different policy scenarios will be developed for evaluating the impacts of existing and proposed policies. By establishing and quantifying these linkages, the model will elucidate the environmental and economic trade-offs of governmental policies that impact environmental quality including water quality and quantity, air quality, forests, and habitat. The spatially explicit models integrate ecosystem processes and human decisions across spatial and temporal scales. This will be accomplished with a grid of landscape cells in which land cover satellite data is superimposed on parcel-level land use data, each containing an ecological unit model, that are connected via fluxes of water, air, sediments, and habitats across a landscape. The causality of the ecological unit model will begin with the projected land use change from the first phase of the project.

Progress 05/01/05 to 09/30/09

Outputs
OUTPUTS: My research during the reporting period (January 1, 2009-December 31, 2009) is focused on the area of spatial modeling of land use change and causes of spatial variations in economic development. Specifically, I evaluated a land value tax as a potential policy tool to moderate sprawling development in Nashville, TN, the nation's most sprawling metropolitan community with a population of one million or more. To achieve this objective, the hypothesis is empirically tested that a land value tax encourages more development closer to preexisting development than farther from preexisting development. Specifically, the marginal effects of a land value tax on the probability of land development is hypothesized to be greater in areas around preexisting development than in areas more distant from preexisting development. The findings show that the marginal effects of a land value tax on the probability of developing parcels that neighbored previously developed parcels was greater than the probability of developing parcels that did not neighbor previously developed parcels. PARTICIPANTS: Not relevant to this project. TARGET AUDIENCES: Not relevant to this project. PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
The quantitative estimates produced by my research focusing on spatial modeling of land use are uniquely suited to those policy makers as they consider new and alternative tools, i.e., land value taxation, as a policy solution to moderate sprawl development. The results from my research also provide guidelines for new land development that maintains or enhances the quality of local communities. The methods and procedures developed in the researches could be used by policy makers in other areas where similar data are available.

Publications

  • Cho, S., Kim, S.G., and Roberts, R.K. 2009. Measuring the Effects of a Land Value Tax on Land Development. Applied Spatial Analysis and Policy 3, available online.
  • Cho, S., Lambert, D.M., Roberts, R.K., and Kim, S.G. 2009. Demand for Open Space and Urban Sprawl: The Case of Knox County, Tennessee. In Progress in Spatial Analysis: Theory and Computation, and Thematic Applications (Eds) A. Paez, J. Le Gallo, R. Buliung, S. Dall'Erba, pp. 205-231. Springer, Berlin.
  • Cho, S., Lambert, D.M., Roberts, R.K., and Kim, S.G. 2009. Moderating Urban Sprawl: Is there a Balance between Shared Open Space and Housing Parcel Size Journal of Economic Geography 10, available online.


Progress 01/01/08 to 12/31/08

Outputs
OUTPUTS: Project I: I have worked on a new method that estimates an optimal distance over which households value open space. I used a sequence of hedonic housing price regressions to determine open space amenity value. The iterative approach establishes an optimal distance over which households value open space. Project 2: I have worked on a project that analyzes temporal and spatial variations in environmental amenities of the Southern Appalachian Highlands in 1990 and 2000. Project 3: I have worked on a project that uses a land value tax to stimulate demand for open space in a metropolitan area. Effects of a hypothetical land value tax are estimated by comparing predicted housing prices and open-space demand under alternative land value taxation scenarios. PARTICIPANTS: Nothing significant to report during this reporting period. TARGET AUDIENCES: Nothing significant to report during this reporting period. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
This information from Project 1 helps prioritize open space preservation decisions where open space value is difficult to objectively quantify. The approach suggested here is also suitable for open space valuation in other markets. The information from Project 2 identifies target forests to be preserved for potential use of the site-selection process for the voluntary acquisition types of policies such as conservation easements. Ex ante results from Project 3 suggest that the policy effects of a land value tax are spatially heterogeneous with respect to open space levels and housing prices. Therefore, a land value tax with a sliding scale may be useful for targeting locations to mitigate the potentially negative effects of sprawl by encouraging open space preservation.

Publications

  • Cho, S., Poudyal, N.C., and Lambert, D. M. 2008. "Estimating Spatially Varying Effects of Urban Growth Boundaries on Land Development and Land Value." Land Use Policy 25:320-329.
  • Cho, S., Yen, S.T., Bowker, J.M., and Newman, D.H. 2008. "Modeling Willingness to Pay for Land Conservation Easements: Treatment of Zero and Protest Bids with Application and Policy Implications." Journal of Agricultural and Applied Economics 40:267-285.
  • Poudyal, N.C., Cho, S., Strickland, J.D., and Hodges, D.G. 2008. "ocio-Demographic and Market Forces of Land Use Change in Northern Cumberland Plateau, Tennessee." International Journal of Ecological Economics & Statistics 10:53-62.
  • Cho, S., Poudyal, N.C., and Roberts, R.K. 2008. "Spatial Analysis of the Amenity Value of Green Open Space." Ecological Economics 66:403-416.


Progress 01/01/07 to 12/31/07

Outputs
Research was conducted under the three theme areas: Enhancement of Property Values in Proximity to Open Space, Value of Time and Goods used in Relation to Open Space, and Cost Benefit Analysis of Developing versus Protecting Open Space. The following summarizes the research findings from each theme area. Two studies were conducted under the theme area of Enhancement of Property Values in Proximity to Open Space; one focusing on premiums resulting from proximity to amenities such as water bodies and parks and the other focusing on valuation of open space with regard to its spatial configuration. Results from the former study suggest that natural and constructed amenities are valuable attributes in housing demand and positively impact sales prices. Empirical evidence from the study focusing on the valuation of open space with regard to its spatial configuration shows that the amenity values of different open space features vary according to the degree of urbanization. One study was conducted under the theme area of Value of Time and Goods used in Relation to Open Space. The objective of this research was to analyze the relationship between the effects of open space and lot size on residential housing prices, focusing particularly on how this relationship changes over space and time. The temporal dynamics of the values attributable to open space and lot size were analyzed by applying the hedonic model to housing transactions from two time periods. Results shows that the marginal values of lower housing density and increased proximities to greenways, parks and water bodies were not only positive and significant, but also increased between the 1989-1991 and 1999-2001 time periods. One study was conducted under the theme area of Cost Benefit Analysis of Developing Versus Protecting Open Space. This research investigated a potential mechanism to moderate urban sprawl by managing the spatial growth of communities using local land use policies. Spatial growth of a city is measured by household's distance to a central business district (CBD). Lot size is used as an example of a controllable factor because policies designed to preserve open space (i.e., maximum lot size) often focus on reducing residential lot size, presumably because open space is viewed as a substitute for large residential lots. The relationships between lot size as a controllable policy tool, open-space demand, and distance to the CBD as a measure of spatial growth of communities were used to develop a strategy to moderate urban sprawl.

Impacts
Estimates of the value of proximity to water bodies and parks should prove useful as input into future debates about public initiatives to protect open space, whether through ballot measures or other means. The estimated values for individual sources of these amenities can be used for budget decisions regarding resource management or in prioritizing specific water resources and parks to be protected. For example, assessing the added value of a given local park to proximal homes and the resulting tax revenues could prove useful to planners trying to justify maintenance expenditures in increasingly tight times. Quantitative estimates of the relative values of residential lot size and open space are essential to making informed policy and planning decisions regarding zoning, urban growth boundaries, government purchase of land for parks, and similar initiatives. The spatial heterogeneity of the relationship between lot size and distance to the CBD highlights the need to develop policy at the local level. Maximum lot size at the district level is a policy that can be adopted. For instance, Knox County, TN does not have a district identified for land use policy other than the Traditional Neighborhood Development District which was established to foster the development of comprehensively planned and pedestrian-oriented neighborhoods developed prior to the 1940s. Establishing a targeted district for a maximum lot-size restriction would encourage more households to want to move closer to the CBD. This greater willingness to move closer to the CBD would likely drive more new residential development closer to the CBD, discouraging sprawl development. This finding is noteworthy in the sense that with only a simple maximum lot size restriction within a designated district, the sprawl pattern of development can be mitigated significantly without other complementary strategies.

Publications

  • Cho, S., and R.K. Roberts, 2007. Cure for Urban Sprawl: Measuring the Ratio of Marginal Implicit Prices of Density-to-Lot-Size. Review of Agricultural Economics, 29:572-579.
  • Cho, S., N.C. Poudyal, and R.K. Roberts, 2007. Spatial Analysis of the Amenity Value of Green Open Space. Ecological Economics, 61. Available online November 7.


Progress 01/01/06 to 12/31/06

Outputs
A simultaneous-equations model was estimated to examine the determinants of and interactions between land development and land value in Knox County, Tennessee. The effects of urban growth boundary in Knoxville and Knox County on the prices of homes were estimated using a hedonic price approach. Findings suggest that the line drawn for the UGB adoption has been affecting the housing market. The values households' place on neighborhood density and the size of single-family housing lots were estimated using locally weighted regression in a hedonic housing-pricing framework. We show that households who are willing to pay more for open space in the neighborhood are willing to compromise lot size and vice versa. The forecasting accuracy of alternative submarket assumptions was investigated. We found that the accuracy of hedonic model applied in a priori submarket structures based on knowledge and understanding of the local housing market are better than other alternative models of systematic clustering techniques. Particularly, forecasting accuracy of expert-defined submarket, using a priori information from realtors who deal with real estate market of the areas on a daily basis, performed significantly better than other models. The spatial variation in amenity values of both quantity and quality of green open space in the housing market was determined. We developed a model to measure the values households place on characteristics of different kinds of open green space. We found empirical evidence that different features of open space have different amenity values across locations. The spatial differences in the marginal values of housing density and their implications for housing development projects in Knox County, Tennessee were determined. The values households place on neighborhood density were measured using locally weighted regression in a hedonic housing-price framework. The neighborhood housing density coefficient in the global model confirms the positive and significant value of lower neighborhood density. The county-level characteristics that serve as drivers of creative employment throughout the Southern US were identified. We found that higher per capita income, greater infrastructure investments and the rural nature of a county tended to promote creative employment density, while higher scores on a natural amenity index had the opposite effect. The effects of urban sprawl on bodyweight and physical exercise and the gender differences in such effects were investigated using a three-regime switching regression model governed by the exercise level. Contrary to common belief, exercise comes as a higher priority among men in more sprawling areas than in less sprawling areas, whereas sprawl was not a factor in women's decision to exercise.

Impacts
Results suggest that growth drivers play out in distinctive ways in areas of urban and rural-urban interfaces. As these distinctively different growth drivers have formed different real estate submarkets, there is a need for different land management schemes over urban and rural-urban interface areas. Spatial variation in the ratio of marginal implicit prices of density-to-lot-size identifies the areas where the marginal value for housing density to lot size is high. Understanding the linkage between neighborhood density and lot size at specific locations can lead to "smart growth" policies that are more appropriate for site-specific conditions. A diverse landscape with fragmented forest patches was more highly valued in sprawled areas because it resulted in a combination of convenience and privacy amenities. In contrast, larger blocks of forest were more highly valued in areas dominated by impervious surfaces and buildings with little vegetation in compact, high-density urban surroundings. In addition, complex and more natural forest patch boundaries were valued higher in the urban core where green space was scarce. Alternatively, open space with smooth and man-made boundaries had a significant premium in sprawling areas where green space was relatively abundant. We were able to identify and map clusters of rural counties where the marginal effects of these variables on creative employment density were greatest. These findings should help rural communities to promote creative employment growth as a means of furthering rural economic development.

Publications

  • Cho, S., Bowker, J.M. and Park, W.M. 2006. Measuring the Contribution of Water and Green Space to Housing Values: An Application and Comparison of Spatially-weighted Hedonic Models. J. Ag. Res. Econ. 31:485-507.
  • Cho, S., Clark, C.D. and Park, W.M. 2006. Two Dimensions of the Spatial Distribution of Housing: Dependency and Heterogeneity across Tennessee's Six Metropolitan Statistical Areas. J. Ag. Appl. Econ. 38:299-316.
  • Cho, S., Chen, Z., Yen, S.T. and Eastwood, D.B. 2006. Estimating Effects of an Urban Growth Boundary on Land Development. J. Ag. Appl. Econ. 38: 287-298.
  • Cho, S., English, B.C. and Roberts, R.K. 2006. Spatial Analysis of Housing Growth. Rev. Reg. Studies 35:311-335.
  • Cho, S., Chen, Z., Yen, S.T. and Eastwood, D.B. 2006. The Effects of Urban Sprawl on Body Mass Index: Where People Live Does Matter? Consumer Interests Annual 52:159-169.
  • Cho, S., Chen, Z., Yen, S.T. and English, B.C. 2006. Spatial variation of output-input Elasticities: Evidence from Chinese county-level agricultural production data. Electronic Proceedings for The Chinese Economists Society 2006 Meeting, Governing Rapid Growth in China: Efficiency, Equity and Institutions. July 2-4, 2006, Shanghai, China. http://www.econ.shufe.edu.cn/ces/paper/ces_pdf/8/8-1.pdf.
  • Neelam C. P., Cho, S.H. and Hodges, D.G. 2006. A Discrete Choice Model of Forest land Conversion. Proceedings for 86th Annual National Conference of the Society of American Foresters. October 25-29, 2006, Pittsburgh, PA.
  • Cho, S., Bowker, J.M. and Park, W.M. 2006. Measuring the Contribution of Water and Green Space Amenities to Housing Values: An Application and Comparison of Spatially-weighted Hedonic Models. Res. Ag. Appl. Econ. Selected paper, Annual Meeting of the American Agricultural Economics Association. July 23-26, 2006, Long Beach, CA. Published in(http://agecon.lib.umn.edu/cgi-bin/pdf_view.pl?paperid=21878&ftype= .pdf)


Progress 01/01/05 to 12/31/05

Outputs
Effects of urban growth boundary (UGB) on land development and property values were investigated by examining the relationship among time of the adoption, location of UGB in Knoxville/Knox County, Tennessee, and the probabilities of land development. This was achieved with the use of a land parcel data set in an eight-year period starting from four years before the UGB was initiated in January 2001. The UGB of Knox County has been successful in urban revitalization within the city boundary and in discouragement of urban sprawl. After correction of spatial autocorrelation, estimated housing price during the four post-UGB years was higher than that of the pre-UGB era. Influences of proximity to water bodies and parks on residential housing values in Knox County, Tennessee, were estimated using the hedonic price approach. Values for proximity to water bodies and parks were estimated and local estimates for individual sources of each amenity were generated. Estimates of the value of proximity to water bodies and parks should prove useful as input to future debates about public initiatives to protect open space. Public attitudes towards conservation easements in rural communities were examined using the survey conducted in Macon County, North Carolina. Factors influencing public support for conservation easements were identified and tested. Homeowners who were indecisive about supporting, but did not oppose conservation easements were more likely to support the program once informed of relevant environmental issues.

Impacts
Policy makers should be aware that Urban Growth Boundary tools can be effective in discouraging urban sprawl. The value of having parks and water bodies close-by should help in making decisions about providing such amenities.

Publications

  • Cho, S., Wu, J. and Alig, R. 2005. Land Development under Regulation: A Comparison between the East and West Sides of the Cascade Range in Oregon, Washington, and California. Review of Urban and Regional Development Studies. 17:1-17. March.
  • Cho, S., Newman, D.H. and Bowker, J.M. 2005. Public Attitudes toward Conservation Easements in Rural Communities. 16th Annual Southern Appalachian Man and the Biosphere. Cherokee, NC (November 2005), 34. Abstract.
  • Cho, S. and Newman, D.H. 2005. Spatial Analysis of Rural Land Development. Forest Policy and Economics. 7:732-744. August.
  • Cho, S., Newman, D.H and Bowker, J.M. 2005. Measuring Rural Home Owners' Willingness to Pay for Land Conservation Easements. Forest Policy and Economics. 7:757-770. August.
  • Cho, S., Newman, D.H. and Wear, D.N. 2005. Community Choices and Housing Demands: A Spatial Analysis of the Southern Appalachian Highlands. Housing Studies. 20:549-569. July.
  • Cho, S., Clark, C.D. and Park, W.M. 2005. Projecting the Pattern and Density of Development at the Rural-Urban Interface. Research in Agricultural and Applied Economics. Selected paper, Annual Meeting of the American Agricultural Economics Association. Province, RI (July 2005). On-line publication. (http://agecon.lib.umn.edu/cgi-bin/pdf_view.pl?paperid=16153&ftype=.p df)
  • Cho, S., Clark, C.D., Park, W.M. and Young, A. 2005. Spatial Dependency and Heterogeneity of Housing Density in Tennessee's Six Metropolitan Statistical Areas. Conference Proceedings, Emerging Issues Along Urban/Rural Interfaces: Linking Science and Society. Atlanta, GA (March 2005): 242-253.