The Sale of Development Rights and Zoning in the Preservation of Open Space: Lindahl Equilibrium and a Case Study

Abstract

The decade of the 1970's found urban Americans bemoaning urban sprawl and clamoring for the preservation of open green spaces in our ever-growing megalopolises. The last half of the decade, especially, witnessed a land boom in areas such as Southern California, with prices for land and housing rising at rates high enough to result in property tax revolts and large-scale conversion of open space and agricultural land to residential and commercial use. According to the U.S. Department of Agriculture, during the ten-year period from 1967 to 1977, an area the size of Vermont, New Hampshire, Massachusetts, Rhode Island, Connecticut, New Jersey, and Delaware combined, was expropriated from the U.S. agricultural land base. One million acres of America's prime farmlands are urbanized each year, while an additional two million acres of lesser quality agricultural land are lost to nonagricultural conversion.1 Although this may not be much when one considers the size of the cropland base, which is 400 million acres, it is large in relation to the 50 million acres of high potential cropland left.2 This rapid development has led to concern about: