The Effect of Recreation Communities on Local Land Prices: The Case of Beech Mountain

Abstract

beyond differs from previous land booms in that it has involved the entry-in-force of large recreation communities. These communities, often multi-million dollar enterprises containing thousands of acres, offer vacation homesites accompanied by facilities ranging from ski slopes to golf courses. The presence of one such community encourages others to locate nearby. Subdividers of recreation land and buyers of isolated vacation homesites then may follow suit. Local residents and casual analysts have attributed increases in land prices to the establishment of these resorts. They then connect these increases with increasing property taxes, increased tax burdens on the poor, increased difficulties in farm expansion, and increases in the start-up costs of new young farmers. Yet, the author is aware of few, if any, rigorous micro-empirical studies testing the link between resorts and area land prices. This paper, therefore, examines the impact of a recreation community on the price of land in the surrounding area. It draws mainly on the urban land price literature and on the reservoir impact literature. The first section presents the model. The second section describes the case study area and the data used to test the model. The third section examines the result of the regression analysis. Finally, the last section summarizes the paper and presents some conclusions.