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Discomfort zone

Zoning laws can sometimes be used in backhanded ways, for instance, by tacking a noise ordinance on to the existing zoning code that would prohibit heavy, industrial noise like what would be emitted from gas drilling operations—and voilà! No fracking.

But even in its more mundane manifestations, zoning laws can have (perhaps) unintended, albeit foreseeable, consequences.

In an earlier post, we linked to a blog by a fellow Dryden resident who pointed out some potential problems with the proposed update to the town zoning ordinance.  At his blog, Economics, my dear Watson, Dr. Watson has unearthed some additional interesting information:

...A new article in the American Journal of Agricultural Economics by Liu and Lynch (an ungated version here) asks "Do Zoning Regulations Rob Rural Landowners' Equity."

They find that if you own agricultural land, there is no effect. On the surface, it appears that non-agricultural land loses 50% of its value, but at least half of that comes from being in an area that is considering down-zoning. Once you account for political decision making (endogeneity), down-zoning reduces non-agricultural land values by 20-28%...

Do read the whole thing.  Probably many people have had the uncomfortable feeling that this was so, but the journal article provides some empirical evidence to support what had previously been largely anecdotal.

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