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STRATEGIC GROWTH AND RURAL CONSERVATION PROGRAM <br />Draft (10.1.2007) <br />Value. The median land value per acre of recently developed parcels near-urban <br />areas is double that of recently developed rural parcels, $32,000 per acre compared to <br />$14,000 per acre (Table 2-2). This finding confirms that there are different housing <br />markets in the two areas, and that the SGRC Program will need to take into account <br />the inherent differences in land value when setting formulas to convert developable <br />acres from the rural areas to the near-urban areas. <br />The reason for using land value per acre, rather than simple land value or total value <br />per acre, is to assess the parcels on a level playing field, without taking into account the <br />size of the parcel, or the size or value of the house itself. . <br />Moreover, data in Table 2-2 show that the range and standard deviation of land values <br />in the near-urban areas is nearly four times that of the rural areas, indicating strong <br />fluctuations in value in the near-urban areas. Large differences in value are significant <br />when considering that the SGRC Program must take into account differences in land <br />value to correctly set formulas that will result in appropriate economic incentives. <br />To further investigate how much distance from a municipality influences land value, we <br />ran across-correlation between distance, parcel size, land value and total (land + <br />building) value per acre (Table 2-3). A value close to one in the table indicates that the <br />two variables are strongly influence each other, while a valve of less than 0.5 indicates <br />that the two variables are largely independent. A negative valve indicates that when <br />one variable increases, the other decreases. For example, land value per acre is <br />correlated with total value per acre very strongly, with a value of 0.95, indicating that <br />when land value is high, total valve is very likely to be high. The correlation values <br />between distance from municipal boundary and land value per acre and parcel size <br />do not show a strong correlation. This indicates that the variables are largely <br />independent, and land value is based on additional factors. <br />Table 2-3. Cross-Correlation of Key Variables for Recently Developed Parcels <br />Table 2-2. Land Value Statistics for Near-Urban vs. Rural Areas <br />