Capitalization and proximity to agricultural and natural lands: Evidence from Delaware

This paper offers an applied study assessing the price impacts of proximity to open space in a residential property market. Data are collected in an urban-influenced region of Delaware, USA, which has experienced rapid population growth—an 85 percent increase in number of households and 92 percent increase in population between Census 1990 and Census 2000—but also maintains substantial agricultural land use. In agreement with previous literature the results show the protection of agricultural and natural lands is capitalized into the value of neighboring properties. Surprisingly however, in this rapidly growing region the open space that is not protected from development offers no distinguishable effect on property values. This is likely because in a rapidly developing region all unprotected land is seen as potentially developable.

► This paper assesses the price impacts of proximity to open space. ► The study region has experienced rapid population growth. ► The protection of agricultural and natural lands is capitalized into the value of neighboring properties. ► Open space that is not protected from development is not capitalized into property values. ► This is likely because in a rapidly developing region all unprotected land is seen as potentially developable.