Optimal regulation of land development through price and fiscal controls

This paper examines the effectiveness of instruments existing residents of a community might use to regulate developers of vacant land in a community. Instruments examined include zoning laws, price regulation, and the shifting of fiscal burdens between existing residents and the developer. Traditional instruments such as zoning are not efficient. In a world of perfect certainty, price controls and creative fiscal arrangements produce efficient outcomes. With uncertainty over future prices, only by restructuring fiscal arrangements can the community efficiently control the developer.