Profit-maximizing land developers are hypothesized to configure subdivisions to minimize the effects of a conservation regulation on developed land values, subject to their expectations about the demand for developed building lots. This hypothesis allows development of a hedonic price model that takes account of production adjustments. The model is applied to the Maryland Forest Conservation Act, which requires developers to retain or plant trees on part of the developed land. Being exempt from the Act allows developers to gain more for the subdivisions they develop: the cost to regulated developers is about six percent of the per-acre price of developed land. The Act has significantly lowered per-acre developed land values in subdivisions with a mixture of townhouses and single-family dwellings. Costs of the Act are reduced by provisions that allow developers to plant trees offsite or to pay fees in lieu of planting.