Monday, February 13, 2006
Carolyn A. Dehring (University of Georgia - Department of Insurance, Legal Studies, Real Estate) and Melissa Lind (University of Texas at Arlington) have posted Residential Land Use Controls and Land Values: Zoning and Covenant Interactions on SSRN. Here's the abstract:
Residential land use in urban areas can be constrained by zoning or restrictive covenants. When covenants and zoning exist simultaneously, covenants can facilitate an efficient allocation of high restriction and low restriction residential land. However, covenants cannot remedy deadweight loss resulting from zoning that over allocates land to high restriction use. We examine subdivided, vacant residential lot sales from two residential zones which differ in both minimum lot size and the minimum square feet of house. Our findings of a negative price effect from covenant use in the more restricted zone suggest that developers over-supply private restrictions.
[Comments are held for approval, so there will be some delay in posting]