Previous studies in general confirm that land-use regulations raise housing and developed or developable land prices within a locality. Furthermore, most studies of growth controls usually conclude that controls have an undesirable effect, specifically, on the affordability of housing. A higher price for housing is not by itself necessarily undesirable, especially for homeowners. However, higher housing costs imply that the poor are adversely affected. More of their income (and the income of non-homeowners) will go toward housing. Furthermore, the poor are prevented from living in certain communities or must commute longer distances and incur higher transportation costs to work.
The SOAR Initiatives
The SOAR measures effectively mandate non-flexible zoning, or zoning that would require a relatively solid mandate of the people for change. The economics literature is replete with evidence that growth controls have spillover effects on communities in which the control is directed, and in adjacent communities that are not subject to the controls.
Although the SOAR ordinances do not directly constrain new development today, their adoption will have limiting impacts on development in the future. This is an important point because SOAR was intended as a growth control. Effectively, SOAR limits the amount of land in the county for development to the currently prevailing land-use designation. With few exceptions, buildable land cannot be increased by rezoning. Buildable land then becomes a finite resource, subject to scarcity.
However, whether that constraint is applicable now or in the not-too-distant future is irrelevant to the predictability of possible effects.
If they are not exempted, proposed development projects that require alternative land-use designation are, for the time being, dead. Values of existing commercial and residential land may rise, with the steepest increases occurring where the supply of vacant commercial and industrial land is most limited and most demanded. Over time, as vacant buildable land is developed, the supply of vacant land grows exceedingly scarce.
In a capitalist economy, scarcity is overcome by rising prices. Consequently, vacant land with zoning that enables development rises in value. Acquisition costs of that land rise, and that cost is largely capitalized into the value of structures, including commercial buildings and homes.
Values of Land, Structures
The immediate effects of inflexible zoning are neither obvious nor necessarily present. Agents in the market, however, will begin to rationally plan for probable effects one, five, 10 and 20 years hence. Decision-making today in anticipation of future impacts can result in impacts today. Hidden Creek Ranch may be one such example.
Measure T was a referendum on the development agreement between the city of Moorpark and the Hidden Creek Ranch project of 3,221 homes. The project was approved, pending formal annexation of the ranch by Moorpark. A yes vote on Measure T was a vote in favor of the development.
However, Measure T was defeated by voters Jan. 12 by a 2-1 margin. In tandem with the defeat of Measure T was the approval of Measure S, which was the local Moorpark version of SOAR. Measure S disables the city's ability to extend its sphere of influence, without a public referendum.
More obvious examples of the immediate effects of SOAR may never be known. Because of expected higher costs and the probable inability to expand in the future, a business that would have moved to Ventura County may now decide otherwise. A firm in the county that was planning to expand may now plan to expand elsewhere. A developer trying to build new office or industrial space may now choose to seek opportunities elsewhere. In all of these cases, jobs and income that would have been created will not be created in Ventura County.
To the extent that a premium on the value of agricultural or open-space lands existed because of the potential for rezoning to commercial or residential, that premium would now disappear. It has been shown elsewhere that strict agricultural zoning is capitalized into land prices. The direction of that effect varies with the characteristics of the parcel and the political setting in which zoning is adopted. However, the potential for rezoning of agricultural land to alternative residential or commercial use, which (in Ventura County) is higher valued, produces a positive premium on farmland. Under SOAR, that premium disappears.
Effectively, the value of agricultural land falls and the value of vacant buildable commercial, industrial and residential land rises.