The effect of coastal land use restrictions on housing prices: A repeat sale analysis

Abstract In 1986, the Critical Areas Commission of the state of Maryland established a set of land use restrictions that limit residential development on land abutting the Chesapeake Bay. In this paper 1 estimate the effect of these restrictions on housing prices in one county on the Bay. I use a repeat sale analysis—inferring the effect of restrictions by observing price changes on houses that sold both before and after the restrictions were enacted. Housing prices in the Critical Area with water frontage increased by 46–62% due to restrictions. Housing prices in the Critical Area without frontage increased by 14–27% and prices near but not in the Critical Area increased by 13–21%.