Grantee Research Project Results
2001 Progress Report: Designing Incentives that Strengthen Local Capacity for Land Development with Open Space and Healthy Ecosystems: Environmental Impact Fees
EPA Grant Number: R828629Title: Designing Incentives that Strengthen Local Capacity for Land Development with Open Space and Healthy Ecosystems: Environmental Impact Fees
Investigators: Swallow, Stephen K.
Institution: University of Rhode Island
EPA Project Officer: Hahn, Intaek
Project Period: January 1, 2001 through February 1, 2003 (Extended to December 31, 2004)
Project Period Covered by this Report: January 1, 2001 through February 1, 2002
Project Amount: $103,821
RFA: Market Mechanisms and Incentives for Environmental Management (2000) RFA Text | Recipients Lists
Research Category: Environmental Justice
Objective:
The purpose of this research project is to develop a theoretical framework for using impact fees to cause land markets to recognize the value of open space and undeveloped lands. These open spaces are valued because they enhance the quality of life for communities near the fringe of urbanization. The objectives of this research project include: (1) evaluating the impact-fee concept as an incentive for land developers to compensate for losses of open space, rural amenities, and associated ecosystems; (2) evaluating obstacles to and advantages of an impact-fee incentive system in relation to alternative market or incentive-based approaches for local management of land use; and (3) evaluating the role of financing of open-space conservation in affecting municipal incentives for conservation and the performance of impact fees.
Progress Summary:
The first year of work concentrated on identifying a link between the values of open-space conservation and the calculation of environmental-impact fees that would recognize this value. This work included initiating a literature review of hedonic valuation literature relating the value of real estate (usually residential property) to the proximity of the real estate to undeveloped ecosystem areas. Preliminary results indicate that available hedonic studies are not well suited as a foundation for the estimation of impact fees. The weakness in hedonic studies relates, in part, to their original research objectives that have a focus that is more narrow than necessary to capture the impact of land conversion on a community's quality of life. For example, some of the better hedonic studies identify changes in residential real estate values with distance from undeveloped and conserved land, but not the acreage of undeveloped land nearby. Moreover, hedonic studies may omit the value of open space that is not captured in the real estate market transaction. A potentially promising aspect of some hedonic studies may be the ability to identify a differential value for acres of undeveloped-unpreserved land and undeveloped-preserved land.
In another research area of this project, we initiated the development of contingent choice (contingent valuation or stated preference) models that could be used as the foundation for calculating impact fees. A working paper that develops a numerical illustration from stated-preference data for Richmond, RI, was initiated (about 40 percent was completed by December 2001). A key aspect of that paper is its discussion of the distinction between the value of maintaining an undeveloped landscape and the value of providing public access (for passive recreation) to that landscape. A base impact fee can be established from willingness-to-pay estimates of the value of preserving land parcels (such as through municipal purchases of development rights programs). However, stated-preference data may enable the calculation of impact fees through a "mitigation" approach. For example, a municipality may look to replace undeveloped land that a developer plans to convert with undeveloped land that can be preserved while enabling public access. The cost of purchasing replacement property (or its development rights) may be used as a foundation for the impact fee, thereby avoiding the reliance of impact-fee calculations on willingness-to-pay estimates based on stated-preference data.
A limitation of the numerical examples being developed in the working paper is that the available stated-preference data do not relate directly to the acreage of land conservation under consideration. Although the working paper will be sufficient to establish several basic aspects of the impact-fee calculation, future work will be needed to identify additional sources of stated-preference data that may have fewer limitations in application to the impact-fee concept. Future work also will evaluate more fully the role of public access in the foundations for impact fees.
Future Activities:
Although the partially completed working paper initiated during this preliminary phase of the project will be sufficient to establish several basic aspects of the impact-fee calculation, future work will be done to identify additional sources of stated-preference data that may have fewer limitations in application to the impact-fee concept. In particular, data that may relate to acreages of land conservation would be helpful (and may become available soon). Future work also will evaluate more fully the role of public access in the foundations for impact fees.
Journal Articles:
No journal articles submitted with this report: View all 4 publications for this projectSupplemental Keywords:
community-based, sustainable development, Rhode Island, RI, Northeast, willingness to pay, open space., RFA, Scientific Discipline, Economic, Social, & Behavioral Science Research Program, Ecosystem Protection/Environmental Exposure & Risk, Ecosystem/Assessment/Indicators, Ecosystem Protection, Economics, Ecology and Ecosystems, Urban and Regional Planning, Market mechanisms, environmental quality, financial mechanisms, mathematical model, urbanization, ecological exposure, healthy ecosystems, municipal incentives, sustainable development, incentives, decision making, land use planners, conservation, community based, land management practices, environmental impact fees, ecosystem health, ecological benefits, environmental economics, land management, land useProgress and Final Reports:
Original AbstractThe perspectives, information and conclusions conveyed in research project abstracts, progress reports, final reports, journal abstracts and journal publications convey the viewpoints of the principal investigator and may not represent the views and policies of ORD and EPA. Conclusions drawn by the principal investigators have not been reviewed by the Agency.