Financial credit drives urban land-use change in the United States Kathleen Sullivan Sealey a, *, P.-M. Binder b , R. King Burch c a Coastal Ecology Laboratory, Department of Biology, University of Miami, P.O. Box 249118, Coral Gables, FL 33124, USA b College of Agriculture, Forestry and Natural Resources Management, University of Hawaii-Hilo, Hilo, HI 96720, USA c 3418 Kaimuki Avenue, Honolulu, HI 96816, USA A R T I C L E I N F O Article history: Received 15 February 2017 Received in revised form 7 December 2017 Accepted 15 January 2018 Available online 31 January 2018 Keywords: Development finance Housing finance Mortgages Landscape ecology Land-use change Sustainability A B S T R A C T Land-use change in the United States is a significant factor in environmental degradation, and occurs at a faster rate than population growth. This paper develops the hypothesis that modern financial instruments and the creation of tools that increase reliance on debt have the undesirable consequences of run-away land-use change, particularly in residential home construction. After reviewing the factors leading to increased housing development and land use change, the paper elucidates the role of modern financial instruments in driving rapid land conversion. The theory is based upon accounting of sources and uses of capital. Financial innovations, especially in credit creation and trading through global capital markets, can help explain the link between land-use change and finance. Available data from a study of modern real estate development supports the role of financial debt as the primary driver for land use change in South Florida. The mechanisms behind development financing address key policies and practices that have led to unsustainable land cover change. We encourage work on land-use change that focuses on a better understanding of the mechanisms linking land developers to financial markets, and cross-disciplinary research that recognizes linkages between financial innovations and ecological health, and that leads to the development of better policies. © 2018 Elsevier Ltd. All rights reserved. Contents 1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 2. History and consequences of land-use change in the United States regarding ecological impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 3. Changes in developer practices and financial instruments that aim to manage risk and increase profitability of short-term development loans 44 4. Conceptual model of land development in South Florida: how the system works . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 5. Concluding remarks and future research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 1. Introduction Important interrelationships exist between the natural envi- ronment and modern capital markets, about which literature is scant. Available research recognizes that economic incentives, markets, and globalization have impacts on environmental change (Clarke et al., 2006; Diaz and Rosenberg, 2008; Halkos and Tzeremes, 2011; Magliocca et al., 2012; Huang et al., 2014). Numerous studies link ecological changes to variation in factors, such as income or affluence, but specifics are lacking (Lumpkin and Pearson, 2013; Nelson et al., 2006). This paper reviews one facet of this environment and finance nexus by examining the flow of money and credit through the financial real estate development. Using the example of land development, we show the mechanism and significance of financially-induced changes in land use (Lambin et al., 2000; Ye and Wu, 2014; Sleeter et al., 2013); and how researchers have standardized frameworks for investigating land use change to better understand rapid conversion of open areas to housing development. Our purpose is not to provide a comprehensive or exact model of the urban land development process, but to create awareness of the modern financial system in the picture for ecological modeling. * Corresponding author. E-mail address: ksealey@miami.edu (K.S. Sealey). https://doi.org/10.1016/j.ancene.2018.01.002 2213-3054/© 2018 Elsevier Ltd. All rights reserved. Anthropocene 21 (2018) 42–51 Contents lists available at ScienceDirect Anthropocene journa l homepage: www.e lsevier.com/locate/ancene