Property Value Capitalization and Municipal Open Space Referenda

This paper first develops a theory of demand for land conservation in the presence of price effects due to both amenity-creation and housing supply-restriction. Three hypotheses designed to distinguish demand for amenities from homeowner rent-seeking are based upon (1) renters, (2) the quality of another locally provided good, schools, and (3) spatial autocorrelation of funding across municipalities. Econometric results suggest an observable degree of demand for open space measures is nonenvironmental in motivation. Efficiency and policy implications are discussed, along with a recommendation for benefit-cost analysis capable of separating nonrival amenities from other interests to certify open space measures.