Rural Land Market Research Articles

Towards a theory of the American rural residential land market

Since the late 1960s there has been a notable acceleration in America in the demand for rural residential land within commuting range of urban and suburban employment and service opportunities. American rural residential households do not seem to purchase acreage tracts primarily for their ‘productive’, or resource value, however. Instead, they purchase rural land for its ‘consumptive’ or residential value, as its value is primarily derived from the bundle of residential attributes associated with it. Over time, rural land within commuting range of metropolitan areas becomes underproductive and idled — a situation which precedes urban sprawl. Rural residential development has thus become a focus of debate on the effects and inefficiencies associated with urban sprawl. Yet, not enough is known about the nature of the rural residential land market. It is argued that American rural residential households are different from their suburban and urban counterparts for at least three reasons. First, they are distinguishable for their pursuit of self-sufficiency, self-expression, and the cultural status that a rural residential lifestyle offers. Second, they seek low cost rural jurisdictions in order to afford more housing and land than they could afford in higher cost urban and suburban locations. Third, they value distance from the city center colinearly with externalities such as pollution, crime, overcrowding, and noise associated with central city areas. In the latter sense, American rural residential households value land more highly the farther away it is from the city center, but discount land value the farther away it is from the boundary of urban development. In light of these considerations, this paper (a) reviews the literature describing the motivations of American rural residential households, (b) poses a theory of the American rural residential land market, (c) applies the theory to a case study, and (d) offers implications of the theory to planning efforts aimed at preserving resource land and containing urban sprawl.

A Case Study of Rural Land Prices at the Urban Fringe Including Subjective Buyer Expectations

It well known that the (present) value of rural land dependent upon anticipated future net benefits appropriately discounted. In his Principles of Economics in the late 1890s, Marshall noted that the capital value of land is the actuarial 'discounted' value of all the net incomes which it likely to afford (1898, p. 718-emphasis added). Modern researchers like Harris and Nehring (1976), Lee and Rask (1976), Melichar (1979), Reinsel and Reinsel (1979), and many others readily acknowledge the importance of expectations in their theoretic models. Nevertheless, expectations apparently have been incorporated in only one cross-sectional, econometric analysis of land values. Reynolds and Timmons (1969) included two variables in their empirical study to proxy future expectations: expected capital gains and expected net farm income. These variables were calculated as a weighted average of historical returns. No empirical analyses using actual market transactions have incorporated variables to quantify the role of expectations based on the subjective beliefs of the land market participants. The role of subjective expectations especially important in a rapidly developing county where much of the growth in the form of relatively small residential lots scattered throughout the urban fringe. In such counties, there are many speculators in the urban fringe land market. In an area with fewer speculators, less demand for building sites, and a lower probability of conversion, expectations may not be quite as important. Nevertheless, subjective expectations should be a significant determinant of price variations in any rural land market via their impact on an-

The Land Market beyond the Urban Fringe

Landownership changes in rural areas beyond the urban fringe open the way for shifts to residential landuse. Sellers, buyers, and local government are the chief participants in the rural-urban conversion process in three landuse zones. Their roles are analyzed in the standard metropolitan statistical area of Rochester, Minnesota. CHARACTERISTICS of rural areas in the United States are changing. Houses stand where crops once grew, and the countryside now has more converts to country living than bona fide farmers. The principal landuse change consists of low-density residential construction when people move to areas with a mixture of residential and traditional rural activities. Studies of the landuse changes on the margins of cities are numerous, but there are few examinations of changing ownership, which is a fundamental issue in the conversion process.1 Changes in landownership almost always precede alterations in landuse. Rural landowners play a pivotal role in the process because they decide how their property will be used or when it will be sold for someone else to use. Buyers and sellers of rural property are the actors in the land market who set the course for changes in the human settlement pattern. This study describes the actors in a land market beyond the urban fringe of a small metropolitan region. The analysis sustains some popular notions about the movement of people to the countryside and corrects some misconceptions about persons who have been selling land beyond the urban fringe. The recent housing boom in rural areas calls for an analysis of landowners beyond the urban fringe. In the past, farmers bought and sold most of the property exchanged in the rural land market. Recently, nontraditional owners have been buying smaller parcels at higher prices than farmers have paid.2 Many new landowners consider their property to be a consumptive * The Center for Urban and Regional Affairs, University of Minnesota, provided the funding for this research. I thank John Fraser Hart and James M. Shumway for suggestions that improved this article. 1 Edward J. Kaiser, Robert W. Massie, Shirley F. Weiss, and John E. Smith, Predicting the Behavior of Predevelopment Landowners on the Urban Fringe, Journal of American Institute of Planners, Vol. 34, 1968, pp. 328-333; Ann Louise Strong, Factors Affecting Tenure on the Urban Fringe, Land-Use Controls Quarterly, Vol. 3, 1969, pp. 1-25; John Fraser Hart, Urban Encroachment on Rural Areas, Geographical Review, Vol. 66, 1976, pp. 1-17; Kathryn A. Zeimetz, Elizabeth Dillon, Ernest E. Hardy, and Robert C. Otte, Dynamics of Land Use in Fast Growth Areas, Economic Research Service Report No. 325 (Washington, D.C.: Government Printing Office, 1976); National Agricultural Lands Study, Final Report (Washington, D.C.: Government Printing Office, 1981), p. 96; Frank J. Popper, Why We Should Care about Who Owns the Land, American Land Forum Magazine, Vol. 2, 1981, pp. 1519; and H. James Brown, Robyn Swaim Phillips, and Neal A. Roberts, Land Markets at the Urban Fringe, Journal of American Planning Association, Vol. 47, 1981, pp. 131-144. 2 Robert G. Healy and James L. Short, The Market for Rural Land: Trends, Issues, Policies (Washington, D.C.: Conservation Foundation, 1981). * DR. PYLE completed this article when she was an assistant professor of geography at the University of Kentucky, Lexington, Kentucky 40506. This content downloaded from 157.55.39.147 on Sun, 07 Aug 2016 05:32:07 UTC All use subject to http://about.jstor.org/terms LAND MARKET BEYOND URBAN FRINGE rather than a productive good. Private buyers and sellers are not the only actors in the rural land market. The role of government must also be considered because landuse regulations imposed by authorities affect the decisions of individuals who participate in the land market.

The Changing Rural Landscape

Demographers find that the fastest population growth is in nonmetropolitan countries, where manufacturing, highway, housing, and shopping pressures are changing the rural economy and stability. At the same time, the need for food, wood, water, and recreation is increasing. Conservations and policymakers need to understand the changing rural land market because development decisions can be irreversible. Government data and studies in six different rural areas are used to identify three national trends: a rise in rural land prices, a broadening of land-purchase motives, and increases in the size of farm units. The higher value placed on rural land makes farming less attractive, but the land market differs from other commodities because it varies by type as well as region. Major issues seen in the six counties include land use, ownership and the structure of ownership, and the socio-economic impacts of changing ownership. 25 references, 4 figures, 1 table. (DCK)

Factors Affecting Land Prices in a Rural New Jersey County

Much attention has been given in recent years to the conversion of substantial amounts of rural land to urban uses. A variety of policies designed to encourage the retention of rural open space have been either proposed or implemented by many state and local governments. Because the decision to convert land to urban uses is generally a private decision in response to market forces, an understanding of these market forces should facilitate better policy development and implementation. This paper reports on a research project designed to explore the forces affecting rural land prices in areas where the rural land market is significantly influenced by the demand for land for urban or suburban uses. Publicly available data on transfers of rural land were analyzed, using a multiple regression model, to both identify and quantify the importance of factors affecting rural land prices.

Impact of Water Recreational Development on Rural Property Values

AbstractPublic investment in water‐based recreation facilities is made to increase the recreation potential of an area and to improve the economic resource base of the area. Estimates of the impact of one such investment on the structure of the land market and on property values were made for a rural area in Pennsylvania. The findings of the study support the general hypothesis that investment in water‐based recreation facilities does significantly influence the value of rural property and the structure of the rural land market. Property characteristics and subdivision activity on surrounding properties had to be considered in addition to distance from the recreational development to measure the impact of this public investment.

Land Tenure and Land Monopoly in New Zealand: I

Previous articleNext article FreeLand Tenure and Land Monopoly in New Zealand: IWilliam Downie StewartWilliam Downie Stewart Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Journal of Political Economy Volume 17, Number 2Feb., 1909 Article DOIhttps://doi.org/10.1086/251495 Views: 97Total views on this site Citations: 4Citations are reported from Crossref Copyright 1909 The University of Chicago PressPDF download Crossref reports the following articles citing this article:Maurie J. Cohen Reforming local public finance to reduce resource consumption: the sustainability case for graduated property taxation, Sustainability Science 14, no.22 (Jul 2018): 289–301.https://doi.org/10.1007/s11625-018-0598-6Brian D. Varian British Capital and Merchandise Exports, 1870-1913: The Bilateral Case of New Zealand, Australian Economic History Review 57, no.22 (Nov 2016): 239–262.https://doi.org/10.1111/aehr.12128Ann Brower, Philip Meguire, Alba DeParte Does tenure review in New Zealand's South Island give rise to rents?, New Zealand Economic Papers 46, no.22 (Aug 2012): 143–158.https://doi.org/10.1080/00779954.2011.608247DAVID GREASLEY, LES OXLEY The pastoral boom, the rural land market, and long swings in New Zealand economic growth, 1873-1939 1, The Economic History Review 62, no.22 (May 2009): 324–349.https://doi.org/10.1111/j.1468-0289.2008.00440.x