land value, and more open space amenity would spill over community boundaries.
Moreover, we can predict that the net social value of open space and the capacity of the
property tax increment could be even lower when open space is located near to the
boundary of a local jurisdiction because more of the positive externality would arise
outside the community’s territory.
Based on the simulation, we can derive two general results. If local residents
desire the public open space like a community park, and do care about the size and
accessibility of such open space, central location is more likely to generate higher social
value and improve the capacity of tax increment financing for public investment in open
space. Second, exhausting the capacity of tax increment financing to provide the
maximum possible amount of open space may not be socially desirable and may even
decrease the net social value of open space although such investment may not impose
extra fiscal burden on local town government.
Effect of the Distribution of Open Space
Very often local policy-makers must decide between providing one large tract
versus several small pieces of open space. We simulate this distribution effect in this
subsection. Theoretically, the spatial distribution of open space can be a continuous
function of spatial location, but in real world it is more likely to be discrete. Here we
only consider several typical discrete cases with circular open space that are of policy
concern. We first focus on two circular open space with equal areas and simulate the
effect of location and the distance between them. More specifically, we examine how the
net value of community land and property tax increment change with the interdistance
between open space for three different locations: diagonal, x axis, and y axis. To
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