1 The Political Economy of Downzoning

Abstract: Local governments at the urban fringe are increasingly “downzoning”. Downzoning is the exercise of police power to reduce the legally permitted density on undeveloped land in a community. This practice is typically challenged by those who perceive the action to limit their market opportunities (e.g., farmers and developers), but supported by others who perceive positive benefits (e.g., environmentalists, conservationists, and homeowners). Proponents may prefer downzoning as a supplement to other preservation techniques, based on concerns over the growing public costs of land acquisition and the perceived urgency to act to manage growth. This paper conceptualizes the public decision-making process that leads to downzoning, specifies an analogous empirical public choice model, and tests its efficacy using a New Jersey case study. The probability of downzoning is found to increase with the amount of open space that remains to be protected, declining farm population, recent growth in non-farm population and land values, and the presence of alternative growth management tools. Results suggest that decision-makers choose downzoning due to concerns over the affordability of other preservation options, such as purchase of development rights programs. Given the direction of causal factors, the prevalence of downzoning is expected to increase as the ability of communities to affor