Economic Analysis of Conservation Developments in Western North Carolina

Abstract

The growth rate in western North Carolina has risen 20% in the past 10 years. This drastic increase has led to an alarming rate of development causing the degradation of many of the natural habitats that are native to western North Carolina. In order to curb some of this degradation development needs to become more sustainable towards the environment. Conservation developments, which are housing developments that place environmental protection as their first priority, are one way to become more sustainable. The economic analysis is done for developers and for society to try and show the economic benefits associated with conservation developments. A cost comparison is done on two different developments, a hedonic pricing model is used to evaluate price premiums and an evaluation of carbon benefits are all used as part of the analysis.

The results indicate that it is cheaper to build conservation developments and they sell for a 39% price premium. Unfortunately, conservation developments do not gain as much profit as conventional developments due to the difference in housing density. Even with the addition of carbon sequestration values, which are greater in conservation developments, the profits are still less. It is important for conservation developments to be supported in this area since they are much more sensitive to the too often degraded landscape.