Author: Jaime Alvayay and John S. Baen

Start Page: 153
End Page: 166
Volume: 5
Issue Number: 1
Year: 1990
Publication: Journal of Real Estate Research

Abstract: Because most of the services that natural wetlands provide are nonexclusive, the economic value of these services is not capitalized into their market price. Because land markets tend to favor development of natural wetlands without recognizing the opportunity cost of natural wetland services forgone, the federal government has deemed it necessary to regulate wetland development. Enforcement of these regulations increases the cost and risk of wetland development, thereby reducing the market price of wetlands. Appraisers who value wetlands must consider the effect of these regulations on wetland values or face the possibility of liability claims and costly litigation.