Urban Growth Boundaries and Development Density

• In Event: Impacts of Local Land Use Policies

Abstract

Cities with growing populations often face a tension between meeting housing demand and the concern that building more housing will decrease the amount of open space, reduce agricultural land, and generally lead to urban sprawl. Nowhere is this truer than in the northwestern US. Seven of the ten fastest growing micropolitan areas are in the northwest. A concern among existing residents is that new housing negatively impacts the preservation of agricultural land and open space.

Urban Growth Boundaries (UGB) are among the set of regulatory tools used by municipalities to influence local land use patterns. UGB policies typically set a boundary that encircles the municipality. New development outside of this boundary is restricted. The location of the boundary can expand over time to accommodate population growth. UGB policies are controversial, in part, because their impact is difficult to assess. Cities typically choose whether to adopt a UGB policy and can endogenously select the location of the boundary. Moreover, the existing literature has been constrained by data limitations that generally make construction of a geographically precise, longitudinal land development database infeasible.

In this paper, we use 75 years of detailed land development data (more than one million unique land parcels) to estimate the causal effect of 178 distinct UGBs on urban spatial form. Our analysis is designed to estimate the impacts of UGBs on land development at both the extensive (total amount of developed land) and intensive (development density) margins. By leveraging a long panel dataset of land development observations, we avoid the selection concerns that can lead to a biased treatment effect estimate when a city endogenously decides if and when to implement a UGB policy.

We implement three main research designs. First, we use a historical, descriptive fixed effects model to confirm key predictions of the canonical urban economics Muth-Mills model when there is no UGB policy, and to show how the spatial development pattern predicted by the Muth-Mills model differs under a UGB policy. Second, our geographic regression discontinuity model provides causal estimates for how a UGB policy affects land development near to the boundary at the rural-urban fringe. Third, we estimate a bunching estimator to evaluate how the policy affects development farther away from the boundary and closer to the city center. Together, the three research designs provide short, medium, and long-run estimates for how a UGB policy affects the spatial pattern of development throughout an urban area and in the surrounding countryside. Extensions to our core analysis include estimates for how a UGB policy affects the total amount of regional development and population growth, home prices, and the amount of existing agricultural land.

Author

• Daniel Bigelow, Oregon State University
  Presenting Author