Explaining Sprawl with an Agent-Based Model of Exurban Land and Housing Markets

This paper develops a model of land use in a growing community on the urban fringe and uses it to explore the spatial patterns and time path of development. The model is an agent-based model (ABM) of housing and land markets that includes as agents farmer/landowners, a developer who buys land and builds houses, and consumers who purchase housing. Housing is characterized by lot size and house size. As in all ABMs, macro-scale patterns emerge from many micro-scale interactions between individual agents, which are modeled computationally. In contrast to many other ABMs, however, the fundamentals of microeconomic decisionmaking are built into the model—consumers choose houses to maximize utility; farmers compare returns from agriculture to the expected value of their land in development; and developers purchase land and build houses so as to maximize profits. Model simulations reveal some aspects of sprawl such as “leapfrog” development, yet also confirm some results from traditional urban economic models, such as declining density and rent (land price) gradients. Sensitivity analyses on the utility function parameters, the distribution of agricultural productivity, and the travel costs highlight the importance of the economic features of the model.

Communities across the United States have implemented a variety of programs and policies to combat sprawl, yet residential development in American exurbia remains characterized by discontinuous or “leapfrog” development and large average lot sizes.

Zoning codes that regulate minimum lot size are an important part of the local planner’s toolkit in suburban and exurban settings. They allow planners to limit high density uses, control growth, and preserve open space and farmland. Yet actual land use outcomes with these regulations are highly uncertain.

In two RFF discussion papers, Nicholas Magliocca, Virginia McConnell, Margaret Walls, and Elena Safirova explore the spatial patterns and time path of housing development in a range of settings. In one paper, “Explaining Sprawl with an Agent-Based Model of Exurban Land and Housing Markets,” the authors develop a unique agent-based model of housing and land markets and use it to study the dynamic and spatial patterns of development in a hypothetical community on the urban fringe. They examine land and housing markets in a developing region, as well as the major influences on patterns of development. In the second, “Zoning on the Urban Fringe: Results from a New Approach to Modeling,” the authors use the model to examine the effects of large-lot zoning in one region on land conversion, land prices, and the spatial configuration and density in both that region and other surrounding areas. They find that the type and stringency of zoning requirements are important: their findings suggest that a two-acre minimum lot size in one region could encourage sprawl by keeping all developing regions in low-density development, whereas larger lot size requirements in the zoned region would tend to result in more contained development elsewhere.