Forthcoming Journal of Urban Economics

I analyze a model of residential location choice where people derive utility from their proximity to open space. When people have such landscape preferences then (1), equilibrium residential devel-opment is mixed with undeveloped land (2), equilibrium land price gradients depend sensitively on how land markets are organized, are not generally monotonic, and may or may not reflect the value of open-space, and (3), dynamic equilibria generally have the property that more remote areas are developed before more central areas. Finally, when compared to optimal development, equilibrium development houses too many residents, too close together, and remote areas are developed too soon. These results imply that equilibrium development may not be sprawling enough and that policies to encourage infill development are not welfare improving