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The research explores the subject of zoning effect on price value of a house in a certain designated zone. Zoning is defined as a land under planned use. This results in price value of the land. As the area of the land decreases an increase in price occurs. This research does not specify the magnitude of a certain unit by which a housing price will increase or decrease but it estimates the housing option value. This research helps the policy makers to improve long term policy decisions. This research will showcase zoning effects on housing option value for the specific zones in the city of Normal. The observations are taken for different parcels of total neighborhoods in the city of Normal. This research will use hedonic model for conducting a regression analysis on the subject. The hypothesis taken into consideration before starting the research is to prove that more 50 percent variation in the housing price is affected by the zoning characteristics. This research will try to prove the hypothesis by comparing the assessed values with the predicted values from the model.

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