border effects in suburban land use

Click here to load reader

Post on 25-Feb-2016

43 views

Category:

Documents

0 download

Embed Size (px)

DESCRIPTION

Border Effects in Suburban Land Use. Benoy Jacob University of Colorado – Denver Daniel McMILLEN University of Illinois at Urbana-Champaign. Incentives for Non-Residential Land Use in Suburban Chicago. Suburbs rely heavily on the property tax for revenue (approx. 30%) - PowerPoint PPT Presentation

TRANSCRIPT

Border Effects in Suburban Land Use

Border Effects in Suburban Land Use

Benoy JacobUniversity of Colorado Denver

Daniel McMILLENUniversity of Illinois at Urbana-ChampaignIncentives for Non-Residential Land Use in Suburban ChicagoSuburbs rely heavily on the property tax for revenue (approx. 30%)Cook County has a classification system. Tax rates are the same for all classes, but assessment rates differ. Current official assessment rates are 25% for commercial/industrial properties and 10% for Class 2 (6 units or fewer) residential. There is no homestead exemption for non-residential properties. Results: effective tax rates are about 3 times as high on average for non-residential.1% point of the states 6.25% sales tax revenue is returned to the jurisdiction in which the sale takes placeLocation Decisions within SuburbsAccess to the transportation network:Highways and major roadsRail lines, mainly for industrial land useMetra StationsIncentives to locate firms near suburban borders if there are negative externalities associated with non-residential land use.Do incentives vary by assessed value? Low-priced industrial properties may be particularly likely to be at border locations if they are more likely than high-priced properties to generate negative externalities.Data and EmpiricsAll land parcels in suburban Cook County, 2003 assessment file.Is the density of non-residential land use higher relative to residential land use near suburban borders? Also, relative to Chicago.Multinomial Logit model of land use commercial, industrial, relative to Class 2 residential. Controls for access to transportation and municipal fixed effects. Regressions of assessed values for 2003 on proximity to suburban borders.Evanston

Evanston Parcels (16,163 parcels)

Commercial (601) and Industrial (148) Parcels

Central Street Metra Stop

Industrial Uses:GarageStoreLaundry

Some Other Large Suburbs

90 Cities with at least 10 parcels in each land use

Kernel Densities 1

Kernel Densities 2

Kernel Densities 3

Descriptive StatisticsVariableCommercialIndustrialClass 2Observations25,01911,575524,987Distance from Municipal Line0.3040.2470.299Within 1/16 Mile of Municipal Line0.2080.1620.1061/16 1/8 Mile from Municipal Line0.1240.1870.158Distance from Major Street0.6300.6290.759Within 1/16 Mile of Major Street0.0540.0120.0071/16 1/8 Mile from Major Street0.0800.0420.027Distance from Metra Station1.4391.6631.596Distance from Chicago City Line3.6423.2194.528Distance from Highway1.7001.4991.832Distance from Rail Line0.6610.4280.872Distance from Quarter Section Boundary0.0910.1140.119Assessed Value19.293189.938211.208Log of Assessed Value9.66310.76811.271Multinomial Logit Results: Class 2 BaseCom.FixedEffectsInd.FixedEffectsWithin 1/16 Mile of Municipal Line0.466(0.017)0.485(0.018)0.604(0.027)0.569(0.029)1/16 1/8 Mile from Municipal Line-0.118(0.020)-0.108(0.021)0.375(0.025)0.314(0.027)Within 1/16 Mile of Major Street2.079(0.035)2.091(0.036)0.352(0.088)0.175(0.094)1/16 1/8 Mile from Major Street1.114(0.026)1.132(0.027)0.198(0.048)0.154(0.051)Distance from Metra Station0.008(0.007)-0.150(0.014)0.277(0.007)0.473(0.022)Distance from Chicago City Line-0.047(0.002)-0.130(0.009)-0.045(0.004)-0.406(0.015)Distance from Highway0.016(0.006)-0.020(0.011)-0.093(0.009)-0.296(0.019)Distance from Rail Line-0.450(0.013)-0.358(0.019)-1.999(0.030)-2.307(0.036)Distance from Quarter Section Boundary-13.011(0.155)-13.111(0.156)-1.804(0.206)-2.091(0.214)Log Assessed Value Regressions: FE for 90 CitiesVariableClass 2CommercialIndustrialWithin 1/16 Mile of Municipal Line0.059 (0.003)-0.003 (0.022)-0.223 (0.036)1/16 1/8 Mile from Municipal Line0.040(0.003)0.161(0.026)0.103(0.032)Within 1/16 Mile of Major Street-0.087(0.011)-0.081(0.038)-0.164(0.112)1/16 1/8 Mile from Major Street-0.063(0.006)-0.026(0.031)-0.095(0.061)Distance from Metra Station-0.015(0.002)0.047(0.018)0.299(0.027)Distance from Chicago City Line0.032(0.001)0.125(0.011)-0.004(0.018)Distance from Highway-0.012(0.001)-0.083(0.013)-0.067(0.021)Distance from Rail Line0.101(0.002)0.443(0.022)-0.033(0.035)Distance from Quarter Section Boundary0.155(0.019)1.131(0.184)1.663(0.251)R20.3370.3060.303Number of observations524,98725,01911,757Spline Predicted Values

ConclusionsParcels near municipal borders are significantly more likely to be in commercial or industrial use.

Assessed values of properties near municipal borders tend to be much lower for non-residential properties relative to the interior of a municipality.

Borders have a significant influence on the pattern of land use in the Chicago area.

0.0 0.5 1.0 1.5

0.0

1.0

2.0

3.0

Suburbs

Distance from City Line

Den

sity

ResidentialCommercialIndustrial

0 1 2 3 4 5 6 7

0.0

0.2

0.4

0.6

Chicago

Distance from City Line

Den

sity

ResidentialCommercialIndustrial

0 2 4 6 8

0.0

0.2

0.4

Suburbs

Distance from Metra Stop

Den

sity

ResidentialCommercialIndustrial

0 1 2 3 4

0.0

0.2

0.4

0.6

Chicago

Distance from Metra Stop

Den

sity

ResidentialCommercialIndustrial

0 2 4 6

0.0

0.2

0.4

Suburbs

Distance from Highway

Den

sity

ResidentialCommercialIndustrial

0 1 2 3 4

0.0

0.2

0.4

0.6

Chicago

Distance from Highway

Den

sity

ResidentialCommercialIndustrial

0 1 2 3 4

0.0

1.0

2.0

Suburbs

Distance from Rail Line

Den

sity

ResidentialCommercialIndustrial

0.0 0.5 1.0 1.5 2.0

01

23

4

Chicago

Distance from Rail Line

Den

sity

ResidentialCommercialIndustrial

0.0 0.5 1.0 1.5 2.0 2.5 3.0

0.0

0.4

0.8

1.2

Suburbs

Distance from Major Street

Den

sity

ResidentialCommercialIndustrial

0.00 0.02 0.04 0.06 0.08 0.10

020

6010

0

Chicago

Distance from Major Street

Den

sity

ResidentialCommercialIndustrial

0.00 0.05 0.10 0.15 0.20 0.25

02

46

8Suburbs

Distance from Quarter Section Boundary

Den

sity

ResidentialCommercialIndustrial

0.00 0.05 0.10 0.15 0.20 0.25

02

46

810

Chicago

Distance from Quarter Section Boundary

Den

sity

ResidentialCommercialIndustrial

0.0 0.2 0.4 0.6 0.8

9.2

9.4

9.6

9.8

10.0

Distance from City Line

Log

of A

sses

sed

Valu

e

Class 2CommercialIndustrial