Land Use Changes: Economic, Social, and Environmental Impacts JunJie Wu JEL Classifications.' Q24, Q28 Major land-use changes have occurred in the United Land use change, however, does not come without States during the past 25 years. The total area of cropland, costs (see Table 1).Conversion of farmland and forests to pastureland and rangeland decreased by 76 million acres urban development reduces the amount of lands available in the lower 48 states from 1982 to 2003, while the to- for food and timber production. Soil erosion, salinization, tal area of developed land increased by 36 million acres or desertification, and other soil degradations associated with 48%. What are the potential economic, social, and envi- intensive agriculture and deforestation reduce the qual- ronmental impacts ofland use changes? How does land use ity of land resources and future agricultural productivity change affect agriculture and rural communities? What are (Lubowski et al. 2006). the important economic and environmental implications Urbanization presents many challenges for farmers for commodity production and trade, water and soil con- on the urban fringe. Conflicts with nonfarm neighbors servation, open space preservation, and other policy issues? and vandalism, such as destruction of crops and damage This article addresses some of these issues and their policy to farm equipment, are major concerns of farmers at the implications. urban fringe (Lisansky, 1986). Neighboring farmers of- Socioeconomic Impacts ten cooperate in production activities, including equip- ment sharing, land renting, custom work, and irrigation Land is one of three major factors of production in classical system development. These benefits will disappear when economics (along with labor and capital) and an essential neighboring farms are converted to development. Farmers input for housing and food production. Thus, land use is may no longer be able to benefit from information shar- the backbone of agricultural economies and it provides ing and formal and informal business relationships among substantial economic and social benefits. Land use change neighboring farms. Urbanization may also cause the "im- is necessary and essential for economic development and permanence syndrome" (i.e., a lack of confidence in the social progress. Table 1. Socioeconomic Impacts of Land-Use Changes • Conversion offarmland and forests to urban development reduces the amount of land available for food and timber production • Soil erosion, salinization, desertification, and other soil degradations associated with agricultural production and deforestation reduce land quality and agricultural productivity • Conversions offarmland and forests to urban development reduce the amount of open space and environmental amenities for local residents • Urban development reduces the "critical mass" of farmland necessary for the economic survival of local agricultural economies • Urban development patterns not only affect the lives of individuals, but also the ways in which society is organized • Urban development has encroached upon some rural communities to such an extent that the community's identify has been lost • suburbanization intensifies income segregation and economic disparities among communities • Excessive land use control, however, may hinder the function of market forces • Land use regulations that aim at curbing land development will raise housing prices, making housing less affordable to middle- and low-income house- holds • Land use regulation must strike a balance between private property rights and the public interest ©1999-2008 CHOICES.All rights reserved. Articles may be reproduced or electronically distributed as long as attribution to Choices and the Agricultural & Applied Economics Association is maintained. Choices subscriptions are free and can be obtained through http://www.choicesmagazine.org. 6 CHOICES 4th Quarter 2008·23(4) stability and long-run profitability other areas, the lack of opportunities support the linkage between land use of farming), leading to a reduction in has turned once-viable communities regulation and housing affordability. investment in new technology or ma- into ghost towns. Urban sprawl in- Two recent Harvard University stud- chinery, or idling of farmland (Lopez, tensifies income segregation and eco- ies found that land use regulation Adelaja, and Andrews, 1988). nomic disparities between urban and reduces housing affordability in the As urbanization intensifies, agri- suburban communities (Wu, 2006). Greater Boston Area (Glaeser and cultural and nonagricultural land use Cities tend to gain lower-income res- Ward 2006; Glaeser and Gyourko conflicts become more severe. This idents and lose upper-income popu- 2002). Cho, Wu and Boggess (2003) may lead to an increase in local or- lation. Between 1969 and 1998, the analyzed the causes and consequences dinances designed to force farmers to share of low-income families in cen- of land use regulations across coun- pay for some of the negative impacts tral cities grew from 21.9% to 25.5% ties in five western states and found generated by agriculture. As the near- compared with a decline from 18.3% that land use regulation increased av- est input suppliers close because of to 16.6% for high-income house- erage housing prices between 1.3 and insufficient demand for farm inputs, holds (U.S. Department of Housing 4.7%, depending on the intensity of a farmer may have to pay more for and Urban Development 2000). The land use regulations in a county. change in income mix led to a smaller inputs or spend more time to obtain Land use control must strike a equipment repairs (Lynch and Car- tax base and the need for more social balance between private property penter, 2003). Competition for labor services in urban communities. rights and the public interest. Oregon from nonagricultural sectors may Suburbanization brings urban and ballot measures 37 and 49 highlight raise farmers' labor costs. When the rural people and problems together. the difficulty and controversy of the total amount of farmland falls below Most land areas are rural, most wa- balancing act. In an attempt to pro- a critical mass, the local agricultural tersheds are in rural places, and most tect private property rights from reg- economy may collapse as all agricul- of the atmosphere exists above rural ulatory taking, Oregon voters passed tural supporting sectors disappear. space. Urbanites and agencies have Measure 37 in 2004. Measure 37 Urbanization also presents impor- legitimate concerns about the use and provides that the government must condition of rural natural resources, rant opportunities to farmers. The compensate the owner of private real emergence of a new customer base just as rural populations have legiti- property when a land use regulation provides farmers new opportunities mate concerns about urban-based reduces its "fair market value". In lieu for selling higher value crops. For ex- pressures on the natural world. These of compensation, the government ample, Lopez, Adelaja, and Andrews shared interests in the natural envi- may choose to "remove, modify or (1988) found that vegetable produc- ronment have important economic, not apply" the regulation. Measure 37 ers tend to receive higher prices in social, and political implications, was ruled unconstitutional by a lower urbanized areas. The explosion of which may profoundly impact society court, but was upheld by the Oregon nurseries, vegetable farms, vineyards, in the future. State Supreme Court. By Ocrober and other high-value crop industries In response to the increasing ur- 19, 2007, 6,814 claims had been in many suburban areas illustrates banization, many local governments filed, requesting almost $20 billion in how quickly agricultural economies have imposed strict land use control. compensation (Oregon Department of Land Conservation and Develop- can evolve. Many farmers have shown Some of the efforts have been quite remarkable adaptability in adjust- successful in slowing down develop- ment 2007). In an effort to reverse ing their enterprises to take advan- ment. For example, Wu and Cho or modify Measure 37, Oregon vot- tage of new economic opportunities (2007) found that local land use reg- ers approved Measure 49 on Nov. at the urban fringe. They farm more ulations reduced land development 6, 2007 to "ensure that Oregon law intensively in areas with high popula- by 10% in the five western states provides just compensation for un- fair burdens while retaining Oregon's tion density (Lockeretz 1988). More between 1982 and 1997, with the than half the value of total U.S. farm largest percent reduction occurring protection for farm and forest land production is derived from counties in Washington (13.0%), followed by uses and the state's water resources" facing urbanization pressure (Larson, Oregon (12.6%), California (9.5%), (ODLCD, 2008). Measure 49 es- Findeis, and Smith 2001). Idaho (4.7%), and Nevada (2.8%). sentially modifies Measure 37 by re- placing "waivers" of regulations with Urbanization has changed ru- A potential consequence of land use authorizations to establish a limited ral communities in many places. In regulation is higher housing prices, number of home sites. some rural areas, urban sprawl has which make housing less affordable encroached to such an extent that the to middle- and low-income house- In sum, land use change provides community itself has been lost. In holds. There is sufficient evidence to many economic and social benefits, 4th Quarter