Development Rights and the Differential Assessment of Agricultural Land

Fractional Valuation of Farmland is Ineffective for Preserving Open Space and Subsidizes Speculation

Robert A. Blewett, Julia I. Lane

Research output: Contribution to journalArticle

Abstract

Abstract. The relative fiscal efficacy of using differential assessment as a means of preserving agricultural land is examined. A simple model of land use and land rent determination is developed and tested. An implication is that differential assessment merely delays or retards, but does not prevent, the conversion of land to developed uses. Differential assessment is viewed as a tax expenditure, or special tax reduction, that in essence leases development rights, Landowners are also shown to be overcompensated for the development rights implicitly acquired by the public sector. The fee simple purchase of development rights or regulatory control over the use of development rights can be employed to preserve farm land at a lower fiscal cost.

Original languageEnglish (US)
Pages (from-to)195-205
Number of pages11
JournalAmerican Journal of Economics and Sociology
Volume47
Issue number2
DOIs
StatePublished - 1988

Fingerprint

speculation
tax reduction
taxes
rent
fee
purchase
public sector
farm
expenditures
land use
Open space
Farmland
Speculation
costs
Fiscal

ASJC Scopus subject areas

  • Sociology and Political Science
  • Economics and Econometrics

Cite this

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abstract = "Abstract. The relative fiscal efficacy of using differential assessment as a means of preserving agricultural land is examined. A simple model of land use and land rent determination is developed and tested. An implication is that differential assessment merely delays or retards, but does not prevent, the conversion of land to developed uses. Differential assessment is viewed as a tax expenditure, or special tax reduction, that in essence leases development rights, Landowners are also shown to be overcompensated for the development rights implicitly acquired by the public sector. The fee simple purchase of development rights or regulatory control over the use of development rights can be employed to preserve farm land at a lower fiscal cost.",
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