How Have Land-use Regulations Affected Property Values in Oregon?

This study examines the ways in which land-use regulations in general and Oregon’s land-use planning system in particular may affect property values. The study is focused on Oregon, but it is framed within the broader context of research in economics. Our analysis of Oregon land value data finds no evidence of a generalized reduction in value caused by Oregon’s land-use regulations, a result that is consistent with economic theory and with other research in the economics field.
Economists recognize three potential effects of land-use regulations on land values: restriction effects, amenity effects, and scarcity effects. The first effect likely will be negative for restricted properties, but in many cases amenity and/or scarcity effects have a positive and potentially offsetting effect. As a result, and despite the widespread belief that most land-use regulations have negative effects on property values, the opposite may be true in many cases.

William K. Jaeger and Andrew J. Plantinga

Oregon State University

June 2007

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