Urban encroachment, forest regrowth and land-use institutions: Does zoning matter?

As concern grows regarding urban sprawl and forest and agricultural land preservation, the effectiveness of land-use policies in shaping land-use change warrants further study. We evaluate the impact of county-level zoning laws, the most predominant land use policy in the USA, and land rents on the relative amounts of forest, agricultural, and developed land, while controlling for demographic information and taxation rates. Over the past decades, southern Indiana has experienced forest regrowth on private lands, but this regrowth has declined in recent years with increased conversion of open space for urban residential development. We develop a model of land-use shares in 40 southern Indiana counties based on the net benefits to agriculture, forestland, and urban uses using a maximum likelihood estimation of a Dirichlet distribution. We find agricultural land rent and indicators of land productivity are the most important predictors of the proportion of agriculture and urban uses. Forest use is better explained by shifting regional economic structure and hilly terrain. Counties with a greater proportion of their work force in the service sectors have a greater proportion of land forested. Finally, to some extent zoning may protect agricultural land in the region, although land rents, land characteristics, and population are strong predictors of the ratio of agriculture to urban use.