Measuring the interzonal price differential of land under varying landuse controls

Abstract

This thesis was centred around two main research themes. The first was the investigation of the relationship between land value and zoning. As land changes its zoning, does this effect a value change? If so how does this occur and what is a way of measuring the quantum of such a change? The second was the research of the effects of heritage conservation overlays on land value. If Heritage Conservation Area (HCA) overlays are a manifestation of zoning then their effects on land value should be measurable and quantifiable.

The thesis begins by investigating the literature available on zoning and the various landuse models on "rent gap"; "bid rent" and Actor Network Theorem. It then compares these to the empirical rezoning and planning data obtained from some twenty case studies of land parcels in NSW, which had all undergone land-value change. The data is used to derive the Empirical Value Change Equation, an equation that describes the connection between any two zones and the resulting value-change post planning and zoning transformation. The thesis also documents original research in a comparative analysis between land (and house) values inside and outside two HCAs in Sydney.

The thesis found a definite relationship between zoning and land value, connected to the land's ability to generate income or capital or both in a permanent way, able to rely on by the market. The product generated must also be marketable. The HCA research found definitively that HCAs had no measurable effect on land value and were therefore not a true manifestation of zoning. Zoning change was also found to be bi-directional, with the land diminishing in value if zoned from a "Higher-and-Better" use to a lesser use.