In the model referenced in the beginning of Section 3.1, RESI chose to use a log-log model with data from 2002 to 2012. For the model in Section 3.2, RESI included more jurisdiction specific variables and ran a linear-linear based model. The choice between the change in model occurred because over time there are more changes and the relationship may not be as directly observed between the independent variables and the dependent variable. In the short term with more jurisdiction specific variables, the relationship can be denoted on a more direct relationship. In the short term retailers would have less ability to change major underlying costs such as employment, but in the long term these underlying costs may indirectly affect their margins. The long-term basis allows RESI to capture underlying changes such as costs from rack prices, tax changes, and population effects on retailers’ margins. The short-term model allowed RESI to look at specific variables across gas stations within jurisdictions and across jurisdictions with minimal change.
In the model described in Section 3.2, RESI chose to review margin in its linear form with variables since time was not a consideration. As discussed in Appendix A.3, RESI found that there was a moderate to low correlation between rack and margin and, therefore, rack could be an independent variable within the model.
In this model, new variables were introduced such as cup, permit, cup_zone, nonconform, and difference, given the granular data within a one-year period. The addition of the land planning variables allowed for review of the gas prices if jurisdictions where stations were located had more or fewer zones that permitted gas stations (outright or through a conditional use permit) and if the gas station was located in a zone with more barriers to entry what would be the effect on the margins.
The variable difference was added to show the competition among retailers. RESI stated in Appendix A.1 that the assumption was made that competitor prices were known. If this full information is disclosed, then retailers would be able to compete with prices on a daily and weekly basis.
Although Howard County does not contain any incorporated areas, a variable was added to represent Columbia, Maryland. Columbia is an unincorporated community with a population of 99,615 residents.51 Columbia’s New Town District, comprises approximately 9 percent of the total land area in Howard County. Gas stations, like other conditional uses, require approval as part of a development plan that stipulates additional requirements to those found in the CUP requirements in standard zoning areas (B-2, SC, M-1, M-2, or PEC Districts). The additional requirements may contribute to additional barriers to entry than those in traditional CUP zone areas.
Appendix B—Summary of County Zoning Regulations
What follows is a summary of the way gas stations are regulated in each of the eight study area jurisdictions. The figures come from the analysis portrayed in Figure 8.
B.1 Howard County
Gas stations are prohibited in residential zones in each jurisdiction. Gas stations are permitted conditionally in six districts, which cover 35 square miles, or 14.0 percent of the county. They are prohibited in 30 districts (including overlay zones), or 79.0 percent of the districts, or approximately 86 percent of the land area in the county. However, approximately 25 gas stations exist as nonconforming uses in eight districts.
Section 131 of the zoning ordinance outlines specific requirements for zones allowing for conditional use of a gas station, including a 20,000 square foot minimum lot size, minimum 10 feet of road frontage, and 20 percent landscaping. Howard County also regulates building materials and screening. Other uses are permitted, including car washes and convenience stores, as long as they are approved by the Hearing Authority and the lot area is increased to accommodate them. Parking and signage are also regulated. In Howard County, the New Town district, which encompasses Columbia, also permits gas stations with a conditional use permit. There are currently 17 gas stations located within a New Town district, representing 23.6 percent of all gas stations in the County.
Gas stations in Anne Arundel County are permitted as-of-right in the three mixed use districts (MCD-C3, MXD-T3, and MXD-E3) given the approval of a sketch plan, which cover three square miles or 0.8 percent of the County’s land area. In most commercial, industrial, and mixed-use districts, gas stations are permitted by special exception or conditionally. Conversely, gas stations are prohibited in the remaining 20 zoning districts (67 percent of total districts), or 24.2 percent of the County. Special Exception requirements in select commercial, industrial, and mixed-use districts stipulate minimum lot size and frontage requirements; orientation of service bays; setbacks for structures, pumps, and canopies; driveway locations; and permitted accessory uses, including convenience store operation and a repair center, and car wash.
When permitted conditionally in select commercial, industrial, and mixed-use districts, gas stations must conform to the same bulk and performance requirements as outlined for Special Exceptions, but may not include accessory uses such as a convenience store, repair center, or car wash. Gas stations are not permitted to locate at the intersection of local roads. Anne Arundel County also closely regulates signage associated with gas stations.
As in most other jurisdictions, gas stations are prohibited in residential districts in Anne Arundel County, as well as Fort Meade Areas, office districts, the Town Center district, and the Small Business district. However, a select few residential zones may have gas stations that are part of planned unit development (PUD), which allows for gas stations through special exception. Anne Arundel County’s zoning code also possesses standards for parking spaces and signage associated with gas stations and their accessory uses. While Anne Arundel permits gas stations in more districts than the other jurisdictions, their standards very closely regulate the use, bulk, and performance of gas stations.