The Opportunity Cost of Coastal Land-Use Controls: An Empirical Analysis

For more than a decade demographers have been documenting the migration of the U.S. population from interior to coastal states. A belief that this trend will persist has led to concern about increased housing and commercial development in coastal areas. Added development brings water pollution and reduces the natural cover of the coastline. Many states have responded to this trend with land-use controls that limit new residential and commercial development on land adjacent to coastal water. Controls such as these have essentially three economic efficiency effects. First, on the positive side, is the preservation of coastal open space and reduction of water pollutants-benefits enjoyed by residents and visitors. Second, and on the negative side, is decreased residential and commercial proximity to the coast-fewer households and businesses can locate near the