Three essays on the effectiveness of Oregon's land-use planning system : economic analysis with quasi-experimental methods

Graduation date: 2012Oregon's land use planning system is often recognized as having been successful in its goals of limiting urban sprawl and protecting resource lands from development. However, it is difficult to quantify the impact of these regulations, because we cannot observe what would have happened in the absence of land use planning. The three essays in this dissertation explore the effects of Oregon's land use planning regulations on development patterns in the state, and also examine how the land use regulations are administered at the local level.\ud The first essay in this dissertation asks if Oregon’s land use regulations have successfully restricted sprawl outside of urban areas. Urban containment policies, including Urban Growth Boundaries (UGBs), are a common tool used by city planners to promote compact development. We analyze how well UGBs do in containing development using fine-scale GIS data on cities in Oregon. Earlier studies on UGBs yield mixed results, with some authors finding no effects of UGBs on housing market variables and urbanization rates and others finding significant effects. A challenge in measuring these effects is that the location of the UGB is unlikely to be an exogenous determinant of a land parcel's value for development. The panel structure of our dataset allows us to estimate the UGB's effect on the probability of development using a difference-in-difference estimator. This estimator controls for time-invariant unobservable variables and common temporal effects among parcels, thereby mitigating the potential for biased estimates due to the endogeneity of the UGB's location. We also pursue a novel approach to controlling for time-varying factors inspired by regression discontinuity design. We find that UGBs are effective in containing development in many of the Oregon cities we examine, although there are some cities in which development rates are the same inside and outside of the UGB. Our results show that we would greatly overstate the effects of the UGBs were we to evaluate cross-sectional differences in development rates, as is common in previous studies.\ud Besides the creation of UGBs, another goal of Oregon's land use regulations is to encourage citizen involvement in the planning process. The second essay in this dissertation examines the use of voter annexation as a form of citizen involvement. More specifically, this paper addresses the following two questions. First, does voter annexation cause changes in city demographics and characteristics? Second, assuming that a city votes for amendments and annexations to the UGB and city limits, what factors impact the outcome of the vote? We analyze the first question using the method of propensity score matching, which has not previously been used to explore this topic. This allows us to account for the endogeneity that stems from the fact that cities with certain characteristics may be more likely to use voter annexation in the first place. The second question, which is only evaluated for cities that employ voter annexation, is analyzed with the use of the logit model. Oregon's land use regulations must be approved at the state level, but are administered locally. Therefore, unlike past studies, we are able to isolate specific differences in the way the program is administered, and are not evaluating the stringency of the program itself. Previous studies have found that voter-approved annexation causes developers to provide more public goods and increase the scale of development, thereby shifting community demographics. Once a land use decision is on the ballot, it is also noted that cities that are whiter, wealthier, and more liberal are more likely to pass referenda that promote preservation and restrict development. For the first question, we compare specific demographic indicators between the two groups of cities. Contrary to the results of previous studies, we find no effect of voter annexation on these indicators. Our results for the second question indicate that the characteristics of the voting process itself impact the outcome more than community characteristics, which also differs from the results of previous analyses. \ud The third essay in this dissertation is an extension of the first essay, and focuses on the impact of Oregon's land use regulations on the protection of land in riparian corridors and land that has been designated for exclusive farm use (EFU). Riparian corridors are protected with the use of Oregon Goal 5, which focuses on development of natural resource lands inside of UGBs, while EFU land is protected with the use of Oregon Goal 3, which focuses on protection of agricultural land at the county level. The LCT dataset that was used in the first essay is also used in this essay. EFU land by definition has no probability of development in the initial period. Land located in riparian corridors may also face different initial levels of protection than other land. We deal with this endogeneity, and also account for location inside or outside of a UGB, with the use of the difference -in-difference-in-differences estimator. This is an approach that has not been used to explore the effect of Oregon's land use regulations on these land categories. Most of the past studies that have examined the impact of land use planning on development of agricultural land in Oregon have relied on analysis of general trends and indicators, and have concluded that land use regulations have been successful in protecting this land. Previous research on riparian zone protection has focused on protection of aquatic wildlife, and for the most part has not examined the protection of riparian corridors inside of UGBs. The limited studies that have studied the effect of these regulations in UGBs have determined them to be effective in slowing, but not stopping, development in these areas. Overall, we find that Oregon's land use regulations have been successful in protecting both county level agricultural land and riparian corridors located inside of UGBs from development. It is less clear whether these regulations have protected riparian corridors located inside of UGBs from other anthropogenic uses