Lesson 5: The Economics of Land Use

Lesson Overview

This lesson is designed to illustrate the challenges that have to be addressed whenever there is a change in land use zoning. For example, when land that has previously been used for agriculture is rezoned to commercial or residential use, many factors come into play before the zoning change is approved. When certain aspects of the land being rezoned have particular characteristics – e.g., it may have been a brownfield (site where chemicals seeped into the land) or an endangered species habitat – laws and regulations apply that must be adhered to when land use is changed. This lesson, by way of the proposed building of a new elementary school, demonstrates how challenging some of the issues faced can be and whether the community feels this school should or should not be built.

Key Terms & Economic Concepts

Choice	Land Use Regulations	Economic Growth
Long Run	Expected Marginal Benefit	Opportunity Cost
Expected Marginal Cost	Short Run	Incentives
Tradeoffs

Objectives

Students will be able to:

• Describe how scarcity forces choices, and every choice results in costs and beenfits
• Explain that resource management decisions are made by people acting alone or in groups
• Describe the impact that changes in rules and laws have in altering incentives and decisions
• Compare decisions made with varying incentives
• Identify the relative costs and benefits or various rules and laws
• Explain why people value things differently
• Identify the expected marginal cost and expected marginal benefit to various groups related to economic development
• Note the uncertainty related to economic development

Time Required

1 class period (50 minutes)

Materials

• Presentation Slides for Lesson 5
• Handout 1: Land Map – 1 per group of 5-7 students
• Handout 2: Instructions for The School Siting Committee – 1 per group of 5-7 students
• Handout 3: Land Use Key – 1 per group of 5-7 students
  • NOTE: Handouts 1-3 can be stapled together for each group
• Handout 4: School Footprint – Copy on clear acetate/transparency sheet and cut out. 1 school footprint per group of 5-7 students.  
• Handout 5: Role Cards – 1 copy, cut apart into separate role cards.
• Handout 6: Description of Current Land Use & Regulations – 1 per group of 5-7 students
• Handout 7: Simulation Debrief – 1 per group of 5-7 students
  • NOTE: Handouts 6 & 7 can be stapled together for each group
• Visual 1: Land Map
• Visual 2: School Footprint
• Visual 3: Simulation Debrief
• Laser Pointer

Lesson 5 Key Ideas

1. In making economic development decisions in a community people must determine what is important, what they value, and what are the expected costs and expected benefits of the project.
2. People in a community value things differently and consensus must be reached for projects to move forward.
3. Development decisions may have short and/or long run impacts on a community.
4. Incentives may be offered to encourage economic development.
5. The recipient of economic development incentives may or may not stay located in a specific area for the long run.
6. Trade-offs involve costs, both monetary and non-monetary.
7. Environmental laws and regulations play an important role in economic development.
8. Environmental laws and regulations may alter decision making.
9. Economic development is not usually a quick procedure.
10. Alternative economic development plans might be available, but not doable due to funds or timing.