COMPUTATIONAL SOCIAL SCIENCE

Department of Computational Social Science Seminar Abstract

Friday, December 2 - 3:00 p.m.
Center for Social Complexity Suite
Third Floor, Research Hall

Title: Policy Analysis with an Economic Agent-Based Model of Land and Housing Markets on the Urban Fringe

Margaret Walls
Senior Fellow and Thomas Klutznick Chair
Resources for the Future

Virginia McConnell
Professor, Department of Economics,
University of Maryland Baltimore County
and Senior Fellow, Resources for the Future

Abstract: In this seminar, we will present an economic agent-based model of housing and land markets and discuss findings from several papers that use the model to evaluate alternative land use and anti-sprawl policies (Magliocca et al. 2011a, b; 2012; Walls et al. 2011). The model incorporates the actions of heterogeneous housing consumers, developers, and farmer/landowners who make economic decisions in land and housing markets in an urban fringe community. The model allows for population growth and simulates the evolution of land use patterns and prices over a 20-year time period. We analyze minimum lot size zoning regulations and development impact fees with the model, showing the policies’ impacts on spatial patterns of development, types and numbers of houses built, land prices, and housing prices. Many of the results are consistent with key findings from traditional urban economics, but some more nuanced policy implications are also revealed. As one example, the model highlights the countervailing influences of minimum lot size restrictions on land prices – undeveloped land is less valuable per acre but the supply restriction drives up bid prices. As another, the model reveals a dampening effect on prices from changes in the types of houses built in response to zoning restrictions and development fees.

References:

Magliocca, Nicholas, Virginia McConnell, Margaret Walls, and Elena Safirova. 2012. Zoning on the Urban Fringe: Results from a New Approach to Modeling Land and Housing Markets. Regional Science and Urban Economics 42: 198-210.

Magliocca, Nicholas, Virginia McConnell, and Margaret Walls. 2011a. Explaining Sprawl with an Economic Agent-Based Model of Exurban Land and Housing Markets. Resources for the Future Discussion Paper 11-33.

Magliocca, Nicholas, Elena Safirova, Virginia McConnell, and Margaret Walls. 2011b. An Economic Agent-Based Model of Coupled Housing and Land Markets (CHALMS). Computers, Environment, and Urban Systems 35(3): 183-191.

Walls, Margaret, Virginia McConnell, and Nicholas Magliocca. 2011. How Do Development Impact Fees Affect Land and Housing Prices and Spatial Patterns of Land Use on the Urban Fringe? Paper presented at the Association of Environmental and Resource Economists conference, Seattle, WA, June 9.