Empirical Analysis of Pricing Structure of Toll Facilities Based on Social Costs of Driving by Vehicle Class and Its Effects on Traffic, Toll Revenue,
This study develops an analytical method to obtain toll rates for thirteen vehicle classes for seven
toll facilities in Maryland, taking into account various social costs of driving automobiles. The
model is comprised of two parts: (1) an equilibrium model to obtain non-peak period tolls that
incorporates capital and maintenance costs of toll facilities, vehicle emission costs, and
operating/maintenance costs incurred to vehicles due to uneven road surface, and (2) a model to
estimate optimal congestion tolls for three facilities that currently experience congestion. The
models are not a simple forward-moving model, but instead take into account the feedback
effects of revised toll rates on traffic volume and social costs of driving.
The analysis results show some expected results in the estimated tolls and their effects on
vehicle traffic, toll revenue, emission, and ESAL. While congestion tolls clearly show positive
effects across three facilities, results related to estimated non-peak period tolls and their effects
are not consistent across all facilities, depending on the relative magnitude of each social cost
factor as well as the relative levels of current tolls. Results from the sensitivity analysis
generally support the main results. These results reveal a lack of clear pattern in the current toll
structure in relation to vehicle classes among facilities, and indicate possible cross-subsidies
among facilities as well as among vehicle classes. Further research is warranted in order to
achieve road pricing schemes that are more efficient and equitable.
Maryland is often referred to as the birthplace of smart growth, a movement in land use planning that contributed to what is now referred to as sustainability planning, sustainable development, and sustainable communities. Maryland adopted a Smart Growth Program in 1997 with the primary purposes being to use incentives to (1) direct growth into areas already developed and having public facilities, and (2) reduce the conversion of farm, forest, and resource land to urban uses.
The National Center for Smart Growth Research and Education at the University of Maryland was established in 2000 in large part because of Maryland’s leadership in the field of smart growth. Its mission is to provide research and leadership training on smart growth and related land use issues in Maryland and in metropolitan regions around the nation. Thus, a key focus of the Center’s research is Maryland’s Smart Growth Program: where is it effective, and how can it be improved?
This report provides some indicators (also called performance measures) that suggest answers to those questions. The term “suggest” is important: (1) there are many limitations of any assessment based on indicators, no matter how well developed, and (2) the indicator assessment reported here is only in its preliminary stages. Understanding the limitations of indicators is critical to interpreting their significance. Thus, Section 2 and Appendix B of this report discuss in some detail data, methods, and limitations.
Researchers and policymakers acknowledge those limitations, but that acknowledgement does not slack their desire for indicators that say something concrete about whether desired outcomes are being achieved, and at what cost in direct expenditures and spillover effects; and about directions for policy that would increase the desired outcomes, reduce the costs, or both. Sections 3 and 4 address those issues.
Section 3 reports indicators for six categories of issues. Population and employment growth drive development. That development is the immediate concern of the two thrusts of the Maryland Smart Growth Program: it puts pressure on the natural areas that the Program wants to protect, and it can occur in development patterns that not only eliminate and vitiate those natural areas, but also are inefficient from the perspective of providing transportation and other infrastructure and, ultimately housing (and other buildings). Some of the key findings:
- Population. The population growth rate in Maryland approximately equals the national average. The indicators give no direct, rigorous, or even casual evidence that the Smart Growth Program either increased or decreased the amount or composition of population growth statewide.
- Employment. Employment and other measures of economic activity have consistently grown over the last two decades in Maryland and all its regions. From 2000 to 2009, Maryland had the 13th highest annualized rate of job growth (1.0%) among the 50 states. Indicator data allow the conclusion that the Smart Growth Program did not stop economic growth, but they do not allow a conclusion about whether the Program increased or decreased that growth from what it would have been in the absence of the Program.
- Transportation. For most measures of transportation performance that are standardized, Maryland looks like other states: VMT, congestion, and car ownership have risen consistently over time. Maryland has higher transit ridership than most states, some of which may be attributable to the Smart Growth Program but most of which is attributable to Maryland’s proximity to Washington, D.C. and its own historical investments in transit (especially in Baltimore and in suburban Maryland) that pre-date the Program.
- Development patterns. Urban development continued in Maryland at densities lower than several comparison states from 1990 to 2000. Most of that growth has not been infill of urban areas: the predominant form of urban development in Maryland remains suburban. Three-fourths of the new single-family acres were developed outside PFAs since 1997. Indicators of Smart Growth in Maryland NCSGRE January 2011 Page 3 While this indicator has shown some improvement in recent years, the share of parcels developed outside PFAs continues to demonstrate an increase over time. Despite increases in density for the state as a whole (which is inevitable if there is any population growth), a substantial amount of Maryland’s new growth has been occurring in the exurban areas of the state. The share of population that lives within a half-mile of rail transit stations, however, has generally risen over time.
- Housing. Although the single-family share of new housing construction has fallen recently, the single-family share of housing in Maryland is high for a highly urbanized state. Housing prices have inflated faster in Maryland than most other states the last few decades, clearly raising questions of affordability, which varies across the state.
- Natural areas. The trends for acres of farm and forest land have been steadily downward in Maryland and the U.S. for a long time, but data suggest that rate of decline is decreasing. Maryland and its counties have protected well over 1.3 million acres of land. There is still, however, a substantial amount and percent of critical land that is not protected. Measures of air quality are mainly stable or improving, yet measures of water quality demonstrate poor conditions in watersheds across the state.
If the indicators here are leaning in any direction, it is that Maryland has not made substantial progress toward improving its performance in many of the areas pertaining to smart growth. There are, however, reasons to qualify a direct conclusion like that one:
- Without the kind of research design that goes well beyond the reporting of indicators into statistical controls for multiple explanatory variables, there is no solid way to rebut the hypothesis that what the Maryland Smart Growth Program did was to prevent many indicators from getting much worse than they are.
- Things take time. Many changes in technology, social attitudes, prices, and the built environment occur slowly. Indicators of Smart Growth in Maryland NCSGRE January 2011 Page 4
- If it is too early to expect to see much by way of results (e.g., changes to trends) then perhaps indicators of outcomes should be supplemented by indicators of inputs: of efforts made to stimulate future change (i.e., the number and strength of policies to change the patterns and effects of growth).
A Joint Travel Demand and Environmental Model to Incorporate Emission Pricing for Large Transportation Networks
Emission reduction strategies are gaining greater attention to support the national objective for a sustainable and green transportation system. A large percent of emission contribution arises from transportation modes are primarily from auto and truck travel. Reductions in highway travel require prudent planning strategies and modeling user’s response to planner’s policies. Modeling planning goals and user’s response is a challenging task. In this paper the authors present a joint travel demand and environmental model to incorporate vehicle emission pricing (VEP) as a strategy for emission reduction. First, the travel demand model determines the destination, mode and route choice of the user’s in response to the VEP strategy set by the planner. Second, the emission model provides NOx, VOC, and CO2 estimates at a very detailed level. A Base-case and three models are proposed to incorporate VEP in a multimodal transportation network. The objective function of the Base-case is the minimization of Total System Travel Time (TST), and the models are designed with the objective of minimizing of Total System Emission (TSE). User Equilibrium method is used for travel to model user responses and solved by Frank Wolfe algorithm. The Base-case represents “do-nothing” conditions and the three models address the interactions between planner’s perspectives and user responses to VEP strategies. The proposed model is applied to Montgomery County’s (located in the Washington DC-Baltimore region) multimodal transportation network. The case study results show that VEP can be used as a tool for emission reduction in transportation planning and policy.
Ground level ozone remains a serious problem in the United States. Because ozone non-attainment is a summer problem, episodic rather than continuous controls of ozone precursors are possible. We evaluate the costs and effectiveness of an episodic scheme that requires people to buy permits in order to drive on high ozone days. We estimate the demand function for permits based on a survey of 1,300 households in the Washington, DC metropolitan area. Assuming that all vehicle owners comply with the scheme, the permit program would reduce VOCs by 50 tons and NOx by 42 tons per Code Red day at a permit price of $75. Allowing for non-compliance by 15% of respondents reduces the effectiveness of the scheme to 39 tons of VOCs and 33 tons of NOx per day. The cost per ozone season of achieving these reductions is approximately $9 million (2008 USD). This compares favorably with permanent methods of reducing VOCs that cost $645 per ton per year.
This paper presents a study of recent urban growth patterns in the state of Maryland, which is known as a leader in the current smart growth movement. Five research questions are addressed in this study. First, what have been the trends in urban growth and land use in Maryland for the past 30 years? Second, to what extent have recent urban development patterns in Maryland matched the typical characterization of sprawl? Third, how have the intensity of urban land uses and the physical forms of urban growth in this state varied among its counties? Fourth, have the smart growth initiatives, especially the “Smart Growth Area Act,” significantly affected urban development patterns? Fifth, does the effectiveness of smart growth initiatives vary significantly across local jurisdictions? To answer these research questions, we measure, analyze, and model urban development patterns in Maryland using land use and land cover (LULC) and demographic data for 1973, 1992, 1997, 2000, and 2002. By calculating several important indicators of urban development patterns, we find that for the past three decades population densities have continued to decrease for the state as a whole. However, this trend has slowed since 1997, when the state implemented the smart growth programs. The land conversion rate has somewhat decreased, which indicates that smart growth initiatives have helped, in a limited way, curtail the growing demand for urban land and residential space. Further, we find that the patterns of urban growth and land use have generally become slightly less fragmented and more continuous since 1997. Additionally, we find significant variations in urban development patterns among local jurisdictions. In general, higher densities, higher levels of compactness, and lower levels of fragmentation are observed in the more urbanized counties. Moreover, by estimating a series of logit models of land conversion, we find that Maryland’s “Smart Growth Area Act” has generally increased the probability of land use change from non-urban to urban for areas designated as “Priority Funding Areas.” The effectiveness of this program, however, varies significantly across the counties. We discuss the implications of these findings and identify the directions for future research.
Spring of 2007 will mark the 10th anniversary of the passage of Maryland’s Smart Growth and Neighborhood Conservation Initiative; an effort designed to discourage sprawl development, foster more compact communities, protect the best remaining farms and open space in the state, and save taxpayers from the growing cost of providing services and infrastructure to serve far-flung development. Almost before its various provisions took effect in 1997 and 1998, the Maryland initiative generated interest and acclaim across the country. It received numerous awards and became the principal legacy of the program’s primary architect, former Governor Parris N. Glen- dening. Governors in other states, such as New Jersey, Colorado and Massachusetts, instituted their own “smart growth” proposals, often modeled after portions of the Maryland program. Even the popularity and wide usage of the now omnipresent phrase “smart growth” can be attributed in large part to the Maryland program.
But, what has been the effect of Maryland’s Smart Growth pro- gram? Looking at it some ten years later, has it worked? Did it accomplish what it was designed to do? What have been the strengths and weaknesses of the Maryland approach, and how can lessons from the Maryland experience be used to offer a new set of policymakers in Maryland, as well as elsewhere in the nation, practical suggestions on how to make smart growth smarter?
Presented at “Planning Reform in the New Century,” Washington University Law School, St. Louis, Mo, December, 2004
In the days following the 2004 presidential election there was much consternation in Democratic circles. George Bush won again; the Republicans picked up seats in the House and Senate; and the Republican majority seemed to have grown in depth and strength. Pundits and progressives were already wondering--could the Democrats ever recapture the hearts of an American public now apparently obsessed with security, morality, and personal charm.
Among academic and professional planners there was similar concern. Although John Kerry had never been a champion of smart growth, it was clear that the prospects for smarter growth were far greater in an administration headed by Kerry than one headed by Bush. Smart growth had not fully disappeared in the federal agenda in the first Bush administration, but the momentum had clearly waned. Further, the discussion in the planning chat-rooms and list serves focused on the blue and red maps, which made clear that Republicans dominated not only the central and southern states but also the rural and suburban areas of most every state in the union. The subject line of one long conversation on the PLANET list serve was “sprawling Republicans” which conveyed the alarm: the new American majority was deeply rooted in urban sprawl.
In the wake of these political events, it is reasonable to ask: can smart growth survive another term of President Bush? If so, what must be done to regain the momentum and capture the favor of an ever-growing conservative majority? In this period of national reflection, therefore, I consider the state of smart growth and its prospects for the near- term future. I start with a brief history of its evolution, continue with an examination of recent trends, and follow with an assessment of whether smart growth will change those trends. I conclude with recommendations for how smart growth might adapt to the new political realities.
Today's Vision, Tomorrow's Reality: Summary Report of the Reality Check Plus Growth Visioning Exercises
"Reality Check Plus” was the name given to a series of growth visioning exercises that were held in four different regions in Maryland in late spring 2006. The events were designed to help elected officials, government leaders, business executives, civic organizations, environmentalists and everyday Marylanders become more aware of the level and pace of growth that is projected to come to Maryland by 2030 – and to ask them think about the potential challenges and consequences Marylanders will face as a result of such dramatic change. It also was designed to encourage citizens and elected officials to think about ways to address growth issues on a regional or even statewide basis.
Determinants and Effects on Property Values of Participation in Voluntary Cleanup Programs: The Case of Colorado
State Voluntary Cleanup Programs (VCPs) were established starting in the 1990s to encourage the environmental remediation and redevelopment of contaminated properties. These programs typically offer liability relief, subsidies and other regulatory incentives in exchange for site cleanup. This paper asks three questions: First, what type of properties are attracted to voluntary cleanup programs? Second, what is the interaction between these state programs and other incentives for remediation and economic development, such as Enterprise Zone and Brownfield Zone designations? Third, what is the effect of participation in the VCP on property values?
We use data from Colorado’s VCP to answer these questions. We find that most of the properties enrolled in this program were not previously listed on EPA’s contaminated site registries, and that most applicants seek to obtain directly a “no further action” determination without undergoing remediation. The main determinants of participation are the size of the parcel and whether the surrounding land use is primarily residential, while other incentives have little effect. Properties with confirmed contamination sell at a 47% discount relative to comparable uncontaminated parcels, and participation tends to raise the property price, but this latter effect is not statistically significant.
Taken together, these findings suggest that the participating properties are those with high development potential, and hint at the possibility that owners or developers may be seeking to obtain a clean bill of health from the State with only minimal or no cleanup efforts. Were these findings confirmed with data from other states, they would raise doubts about the effectiveness of voluntary programs in encouraging remediation and their usefulness in reversing some of the undesired effects of the Superfund legislation.
The contemporary pattern of urban development in industrialized countries is increasingly taking the form of low density, decentralized residential and commercial development. In the Chesapeake Bay watershed, which is located within the mid-Atlantic region of the United States, dispersed development patterns have been linked to habitat fragmentation and declining water quality. Our objectives were to document how this urbanization process has expanded throughout the watershed and to explore how lands comprising the natural resource base, particularly forests, have been replaced by a matrix of the built environment.
The Fruits of Growth Management in the Sunshine State: An Examination of Urban Form in Orange County, Florida
The state of Florida is nationally recognized as a leader in urban growth management. In 1972, Florida’s legislature passed a host of statutes aimed at addressing the increasingly apparent strains on the natural environment caused by then uncontrolled development. The Florida Environmental Land and Water Management Act of 1972 was based on the American Law Institute Model Land Development Code, and created a new regulatory process for “developments of regional impact” (DRIs) in those jurisdictions with local land use controls (FLA. STAT. §§ 380.06, 380.012 et seq.). It also provided for designation of environmentally sensitive “areas of critical state concern,” which entailed stringent state oversight of development (FLA. STAT. § 380.05). Other legislation passed that year include the Florida Water Resources Act of 1972, which created regional water management districts, and the Land Conservation Act of 1972, which authorized the Governor and Cabinet to buy environmentally endangered lands and land for outdoor recreational use (FLA. STAT. §§ 373.013 et seq., 259.01 et seq.).
Specifically related to land use planning, the Florida State Comprehensive Planning Act of 1972 required the Governor to prepare a State Comprehensive Plan, which would articulate goals and policies to guide Florida’s future growth following enactment by the legislature (FLA. STAT. § 186.001 et seq.)
What Are the Effects of Contamination Risks on Commercial and Industrial Properties? Evidence from Baltimore, Maryland
Using the hedonic pricing approach, we investigate how the information released on public registries of contaminated and potentially contaminated sites affects nearby commercial and industrial properties in Baltimore, Maryland. We find that commercial and industrial properties are virtually unaffected by proximity to a site with a history of contamination. Knowing that the site is no longer considered contaminated does not have a rebound effect on property prices either.
We also find that urban economic development policies, such as Empowerment Zones and Enterprise Zones, have little effect on property values. In sum, brownfield properties in Baltimore are not particularly attractive investments for developers, and there is little potential for self-sustaining cleanup based on appropriate fiscal incentives, such as Tax Increment Financing. It is doubtful that “one size fits all” measures to encourage the cleanup of contaminated sites can be successful in this context.
Hydro-Ecologic Responses to Land Use in Small Urbanizing Watersheds Within the Chesapeake Bay Watershed
Urbanization in the Chesapeake Bay watershed is having dramatic impacts on the streams and rivers that feed the Bay. Increasing imperviousness has led to higher peak flows and lower base flows. The movement of pollutants and other materials to receiving waters has increased and stream water temperatures have risen. These changes alter the structure and functioning of reivers, streams, and associated riparian corridors and result in changes in ecosystem services.
We define a hydrologic disturbance index that indicates varying degrees of disturbance on a reach-by-reach basis, dependent on the aggregate amount of urbanization upstream of each reach. For current conditions this index is more variable than for future conditions, because current land use in the study watershed is more variable, containing mixtures of urban, agricultural, and forested land. In contrast, future land use is projected to be more uniformly urban, leading to a less variable but greater overall degree of hydrologic disturbance.
Two effects of urbanization on fish are explored through ecological modeling: effects of streambed disturbance on food availability and effects of stream temperature on spawning. We tabulate food availability as a function of bed-mobility for 30 different fish species. We show that additional stress occurs with additional urbanization of the watershed. We show that the urban-related increase in stream temperatures may cause several warm-water species to gain opportunities to spawn in some cases. However, combining food availability and spawning day availability into a single index reveals highly stressful conditions for all fish species under the fully developed scenario.
Increasing awareness about the problems brought on by urban sprawl has led to proactive measures to guide future development. Such efforts have largely been grouped under the term, Smart Growth. Although not widely recognized as such, the smart in Smart Growth implies an optimization of some quantity or objective while undertaking new forms of urban development. To illustrate a formal, quantitative framework for Smart Growth, this study develops definitions of optimal development from the perspectives of four different types of stakeholders: a government planner, a land developer, a hydrologist, and a conservationist subject to certain developmental constraints. Four different objective functions are posed that are consistent with each of these stakeholders’ perspectives. We illustrate the differences in consequences on future development given these different objective functions in a stylized representation for Montgomery County, Maryland. Solutions to Smart Growth from the individual perspectives vary considerably. Trade-off tables are presented which illustrate the consequences experienced by each stakeholder depending on the viewpoint that has been optimized. Although couched in the context of an illustrative example, this study emphasizes the need to apply rigorous, quantitative tools in a meaningful framework to address Smart Growth. The result is a tool that a range of parties can use to plan future development in ways that are environmentally and fiscally responsible and economically viable.
This study examines the role that land contamination plays in hindering central city redevelopment. We tracked all sales, the selling price, existence of contamination, location, and length of time on the market in one industrial area of approximately 5,580 acres in Southwest Baltimore. The results indicate that after the mid 1990s, contaminated parcels are selling and the market has adjusted to contamination by lowering sales prices. Over the decade 45 parcels with either confirmed or historical reasons to suspect contamination sold. Interviews with owners and brokers of the parcels on the market for two years or more indicate that outdated parcel sizes, inadequate roads for modern truck access, outdated and aging infrastructure, incompatible land uses, and high asking prices are the most significant barriers to the redevelopment of industrial central city districts.
This study tracks the remediation history and redevelopment on three brownfield sites in Baltimore, Maryland. The sites are Camden Crossing, Highland Marine Terminal, and Crown, Cork, and Seal. The first project, Camden Crossing, promises to turn previously industrial property into a town house development. Highland Marine Terminal and Crown, Cork, and Seal were industrial sites transformed into warehouse space. The proposed residential, Camden Crossing, project has met with continuous impediments and delays, and is now running more than eight years behind schedule. The two industry to warehouse sites can be characterized as successful, with profitable enterprises now operating on both. The factors that appear to compress risk and contribute to successful brownfield redevelopments are continuous industrial use, a strong market for the final use, and quick movement through the Phase I and Phase II testing, Maryland Department of the Environment approvals, and reuse. The continuous industrial use means that cleanup standards are not as stringent as for residential use, thereby speeding cleanup and lowering remdiation costs. Moreover, an uncertain market for the final product increases risk. For example, the warehouse market in Baltimore is much stronger than the residential market. The weak residential market in combination with stringent cleanup standards undermines the profitability of Camden Crossing. Finally, the delays in Camden Crossing have both resulted in and been further aggravated by changes in the Maryland Department of the Environment staff. Over the eight years the project has been under discussion, the Maryland Department of the Environment has revised and made cleanup standards more strict.
Prepared for Presentation at the International Workshop on Urban Growth Management: New Approaches to Land Management for Sustainable Urban Regions University of Tokyo, Tokyo, Japan, 29-31 October 2001
Smart growth is a term rising rapidly in use and ambiguity. The origin of the term is uncertain, though some credit Harriet Tregoning, former Director of the Development, Community and Environmental Division of the U.S. Environmental Protection Agency (USEPA) and now the smart growth Czar in the cabinet of Maryland’s Governor Glendening. Even if fiction, this story has a certain allure, since the USEPA and the State of Maryland have done much to make smart growth an agenda item of many states, local governments, and interest groups. Despite its popularity, however, the concept of smart growth remains ephemeral. Much has been written about smart growth in the popular press and newsletters of advocacy organizations, both pro and con, but little has been written about it in the academic literature (early contributions include Burchell et al. 2000, Downs 2001, and Nelson 2001). As the newly appointed Director of Research for the National Center for Smart Growth Research and Education at the University of Maryland, it will be my job to do just that -- not just with papers of my own, but with papers written by scholars with a variety of disciplinary backgrounds. This paper, therefore, represents a first step towards that end. But my goals for this paper are more ambitious; they include the articulation of an agenda for research on smart growth. This is a formidable task, since the ambiguity of the term leaves little in the realm of land use to eliminate as beyond the scope of the subject. To narrow my scope, therefore, I ignore all discussions about what constitutes urban sprawl and whether sprawl, however defined, is good or bad. Instead, I focus my analysis on smart growth policies adopted by the State of Maryland.
As in many countries around the world, concerns about contemporary urban development patterns and their effects on the natural and social environment are high and rising in the United States. Though these concerns are not new, the recent period of sustained economic growth has led to both rapid urban expansion and falling relative concerns about other problems like crime, unemployment, and government deficits. Urban sprawl is now a major public policy issue (U.S. Office of Technology Assessment 1995, U.S. General Accounting Office (GAO) 1999, GAO 2000).
How to address -- even define -- the problem, however, remains unresolved and contentious. Some view urban sprawl as a major threat to environmental quality, fiscal stability, and human health. Those with this point of view support policy reforms sometimes called smart growth, new urbanism, and sustainable development (Ewing 1997, Smart Growth Network 2002). To others, sprawl is simply the result of increases in population, rising real incomes, and the expression of consumer demands (Brueckner 1999). To those with this point of view, there is little evidence that urban sprawl has adverse social or environmental consequences or warrants a policy response (Gordon and Richardson 1997, Urban Futures 2002). In a nation rich in land resources and steeped in traditions of private property rights, this view is not easily dismissed.
More than 110 state and local governments have implemented agricultural land preservation programs to permanently preserve farmland. Assigning a value to the development rights to determine the cost of acquiring an easement on farm properties is difficult and can be costly. Data was collected on 409 preservation transactions from three Maryland counties and supplemented with farm-level spatial data via GIS. A hedonic price analysis is conducted to determine the marginal return to different farm characteristics using a spatial econometric model to correct for spatial correlation. Parcel characteristics such as distance to city and town, number of acres, prime soils and current land-use explain 80 percent of the variation in easement values. As expected, characteristics perform least well in explaining easement values in transfer of development right programs. This information can help formulate policy decisions and selection criteria to maximize the preservation of the agricultural economy and/or maximize public preferences. A supply curve is constructed using simulations that determine nonparticipant parcels’ easement values. To preserve the remaining eligible acres in the three counties, $167 million would be needed. This method can support programs choosing to use a point system rather than the more costly and difficult-to-apply standard appraisal methods.
Using a Studio Course for Provision of Smart Growth Technical Assistance: The University of Marylandís 1999 Community Planning Studio in Perryville, M
As a faculty member in the University of Maryland’s Urban Studies and Planning Program, in early 1999 I decided to have my summer, community planning studio course focus on the challenges facing one of Maryland’s smaller jurisdictions at it attempted to comply with its planning mandates and grow in a manner consistent with the state’s Smart Growth program. The resulting 2 summer studio course, entitled “What’s Smart Growth for Perryville?”, proved to be a rich learning experience for the students and a valuable resource for the town. This chapter focuses on how the 1999 summer studio course provided smart-growth related technical assistance to the Town of Perryville. It will provide a brief profile of the studio course and of Perryville; discuss how the students approached the study; summarize the major findings and recommendations of the final studio report; critically analyze the degree to which the report has since been utilized by the town; highlight the students’ reactions to the studio experience; and discuss the lessons learned from the studio and the studio’s potential transferability.
Local and state governmental entities have implemented transfer of development rights (TDR) and purchase of development rights or purchase of agricultural conservation easements (PDR/PACE) programs to permanently preserve farmland throughout the United States (AFT (American Farmland Trust) 2001a; AFT, 2001b; AFT, 2001c). In each of these programs, the sale of development rights results in an easement attached to the title of the land which restricts the current and all future owners from converting the parcel to residential, commercial, or industrial uses. The value of the land in alternative uses affects an owner’s willingness to participate in these programs as well as the program costs. Thus, information on the value that the private market places on parcel characteristics is important in determining participation behavior and payment levels. In addition, knowledge of the marginal contributions of different parcel characteristics to both private market prices and easement values can help program administrators decide which easement purchases can maximize society’s benefit at the lowest cost.
Lynch and Lovell (2002) found that the agricultural land preservation programs in three Maryland counties (Calvert, Howard and Carroll counties) paid higher per acre easement values for farmland close to the nearest employment center, smaller farms, and farms with a high percent of prime soils, and paid lower values for farms with a high percent of cropland. The importance of certain land characteristics on the easement values was affected by the type of agricultural preservation program (TDR or PDR/PACE) that had enrolled the farm. In an analysis of whether or not the easement restrictions affected the preserved parcels’ market price, Nickerson and Lynch (2001) examined private market sales prices for 200 farmland parcels in the same Maryland counties (Howard, Carroll, and Calvert). They found that the private market paid higher prices per acre for farmland close to the nearest employment center, smaller farms, non-forested parcels, and those parcels in Calvert and Howard counties. They found that prime soils were not important in determining the parcel price in the private market. Comparing the results of these two studies, we find both similarities and differences in the effect of different characteristics on easement values and private market prices for agricultural land.
This chapter explores these similarities and differences by investigating whether the private land market pays similar values for parcel characteristics or whether the preservation programs design payment schemes that are not market-driven. Analyzing a spatially explicit dataset of 2,592 arm’s-length transactions, we also correct for possible spatial correlation that might occur due to the proximity of the observations to one another. We also include parcels that are no longer in an agricultural use. By examining the local market for land, we can determine if the easement value indicated by the supply curve of eligible land to be preserved based on the easement programs’ payments is comparable to the prices received by recently sold local land.