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Big yards or green space? Buying patterns suggest homebuyers prefer their open space to be close to home.

Article Excerpt
In many communities, particularly those on the urban-rural fringe, most housing is located in subdivisions. Increasingly, those developments are subject to "clustering" rules in which houses must be located on a portion of the total land and the remainder is left as open space. In some communities, the zoning law mandates clustering; in others, clustering is recommended but not required.

This open space may be undisturbed forest or pastureland, or it may include recreation facilities and trails. In some communities, the open space may remain in agricultural use as grazing or cropland.

Proponents of clustering requirements argue that undeveloped areas convey value, not only to the residents of the subdivisions themselves, but also to the broader community by preserving more of the aesthetic and rural character of the community and improving environmental quality through habitat protection or water pollution reduction in the region. In communities on the urban-rural fringe, clustering residential developments may be one option in the local government's "toolkit" for maintaining an agricultural base and curbing sprawl.

Open space may provide benefits to subdivision residents, but clustering means that those residents are living in a higher-density setting compared to conventional subdivisions, with neighboring houses in closer proximity to one another. Although the external benefits from the preserved forest, recreation area, or other kind of open space may be positive, it is unclear whether those benefits offset the loss experienced by smaller lots and higher density.

That trade off is the focus of our study. We use data on subdivision house sales occurring over the period 1981-2001 in a county on the fringe of the Washington, D.C., metropolitan area: Calvert County, Md. We examine how households value adjacency to open space and more open space in the subdivision, as well as how readily they will trade off those amenities with their own private lot space.

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We find that private acreage positively affects prices, but so does subdivision open space. Most interesting, we find that subdivision open space does substitute for private lot size, but the magnitude of the effect is small. Finally, having a lot that is adjacent to subdivision open space appears to enhance the value of a house, particularly if the open space is not too steeply sloped. However, we find no evidence of...

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