Borrmann, John Dylan. The impacts of the Highlands water protection and planning act on the supply of new residential housing construction. Retrieved from https://doi.org/doi:10.7282/t3-1pmc-w618
DescriptionTo preserve New Jersey’s natural resources, the state passed the Highlands Water Protection and Planning Act (Highlands Act) and established the Highlands Council to oversee development in the region. The legislation preserved of 415,000 acres and established a transfer of development rights (TDR) program to compensate landowners in the Preservation Area for any loss of property value as well as incentivize communities in the Planning Area to become voluntary receiving zones. In this work, we attempt to determine if the policy suppressed regional growth by comparing the average new housing starts before and after the treatment period. We compared municipalities in Mid-Atlantic Highlands of New Jersey to both municipalities in NY, CT, and PA and to those municipalities in the surrounding New Jersey area. We used a two period panel data set for before and after the treatment period and three separate models including an Ordinary Least Squares, Fixed Effects, and a Difference-in-Difference model. The models indicate with only a modest statistical confidence that the Highlands Act had suppressed development in the Preservation Area. Additionally, the models showed no indication that development was accelerated in the Planning Area or in the surrounding New Jersey municipalities.