1. Introduction
With the swift progression of urbanization and the rapid expansion of urban populations, insufficient urban space that is necessary for development has resulted in disorderly city growth, which has led to issues such as traffic congestion, less arable land and less green land [
1,
2,
3,
4,
5,
6,
7,
8]. Thus, strategies for effectively limiting disorderly urban growth have become a global issue.
Urban containment policies are basic tools of urban space growth management that are widely used to control urban sprawl, to protect open spaces and to shape the growth patterns of urban spaces. There are three main instruments of urban containment policy, namely, greenbelt, urban growth boundary (UGB) and urban service boundaries (USBs) [
9,
10,
11,
12]. A greenbelt refers to a physical area of open space, e.g., farmland, forest or other green space, that surrounds a city or metropolitan area, and it is intended to be a permanent barrier to urban expansion. In contrast to greenbelt, a UGB is not a physical space, but a dividing line drawn around an urban area to separate it from surrounding rural areas. USBs delineate the area beyond which certain urban services, such as sewer and water, will not be provided. All three aim to limit future urban growth inside a certain boundary, but the degree of restrictions on urban development declines gradually, and flexibility and complexity of implementation are incremental.
A greenbelt is an ecological urban growth management tool that is different from the UGB and USB. There are usually different kinds of animals and plants in the greenbelt that can improve the atmospheric environment, effectively reduce urban traffic noise, provide habitat of a wild animal protection area, increase bio-diversity, and so on [
13,
14,
15,
16]. Meanwhile, the sustainability of urban environments is of increasing concern [
17]. It is a necessary condition for the existence of other forms of sustainability [
18]. However, past and current urban practices overlook the environmental needs of the community, which violates the global trend to promote sustainable development in the urban areas [
19]. Thus, a greenbelt will be also an effective tool for promoting urban environmental sustainability.
It is common to use surrounding greenbelts or embedded “green wedges” to limit the expansion of large cities during development. In the late 1930s, London [
20] was the first city in the world to implement a greenbelt policy, followed by Moscow [
21], Barcelona, Berlin, Vienna, and Budapest in Europe [
22]; Boulder, Ottawa and Toronto in North America [
22]; and Seoul, Bangkok, Hong Kong and other cities in Asia.
Of the cities that have applied greenbelt policies, the Seoul metropolitan area (SMA) includes the world’s second largest greenbelt, which is also under the most stringent control. Greenbelt policy in South Korea was first known as the concept of “Restricted Development Zones” (RDZs), which was introduced by the Korean military government in the City Planning Law of 1971 and was shaped by the 1972–1981 National Comprehensive Physical Plan of 1973. Greenbelts were built in Seoul and 13 other cities from 1971 to 1987 [
23]. Seoul’s greenbelt was patterned after the greenbelt in London, with adjustments according to South Korea’s unique characteristics [
24]. The Korean government strictly prohibits any development activities within the greenbelt, and any actions by individuals and enterprises that are contrary to the regulations are severely punished by the government. Because the greenbelt policy was also strictly enforced during the military government era following Park Chung-hee’s term, the greenbelt’s boundaries hardly changed from the 1970s (the setting period) to the 1990s (the democratization period), and activities within it were strictly controlled. The greenbelt’s boundaries were established on the basis of political decision-making rather than on investigation and scientific analysis [
25], and various urban problems have emerged to the extent that deregulation pressures have arisen three decades from its initial implementation. In April 1998, the Committee for Green Belt System Improvement, which consisted of 3 greenbelt residents, 1 environmental group representative, 12 scholars, 3 government officials and 3 journalists, was established. In the following 6 months, they developed the trial of improvement plan through investigation, public opinion survey, expert consultation and on-the-spot investigation of greenbelts in the United Kingdom. In June 1999, the final version of the improvement plan was established. Based on the improvement plan, the government analyzed the urban growth patterns, population growth rate and links between the greenbelt and city of the 14 areas (7 big cities and 7 small and medium-sized cities) that implemented greenbelt policies. These cities were divided into two categories: total removal and partial adjustment. With the acceleration of urbanization and the deepening of the suburban housing crisis, in September 2001, the Korean government further confirmed the release of greenbelt areas in seven big cities with high development pressure, and some of these areas were released for development.
In total, 1491 km
2 of the whole nation’s greenbelt land (27.68%) and 134 km
2 of the SMA’s greenbelt land (8.6%) were released due to the implementation of deregulation from 2000 to 2010. The total released greenbelt area in the SMA covers approximately 134 km
2, which accounts for 8.6% of the SMA’s greenbelt. Because half of the country’s population is located in the SMA and the SMA’s greenbelt is representative of greenbelts in Korea, 134 km
2 of released greenbelt is rather meaningful, given that the SMA is subject to the heaviest restrictions in terms of military operations, the environment, and growth [
26].
Because greenbelt policies in the SMA were formulated early on, studies have made it easy to identify the advantages and disadvantages of such policies. Greenbelt deregulation in the SMA has had a profound impact on the land market, which affects urban land supplies, urban structures and greenbelt accessibility. Consequently, the price of existing land and released greenbelt areas has changed, in addition to resident commuting costs and greenbelt recreation values, which reflect the effects of the greenbelt that restricted land development before and after the application of deregulation.
This paper aims to assess the effect of the deregulation of the greenbelt on land development in the SMA. Firstly, does the deregulation of metropolitan greenbelts increase the probability of urban land development? After the deregulation, was the impact on urban land development in the city centers and land development near the boundary of Seoul and greenbelt boundaries the same? Secondly, is there heterogeneity in the land development probability in different urban areas (the southern part of the Han River and the northern part of the Han River)? To accurately explore the effects of urban containment policies on land development, we used data before the deregulation in 2000 and data after the deregulation in 2010, and adopted a particular approach, the difference-in-differences (DID) method, which treats greenbelt deregulation as a quasi-natural experiment, effectively avoiding the case in the existing research: that greenbelt policy is an exogenous variable.
The rest of the article is organized as follows. First, we review previous research concerning the impact of greenbelt policies on land development in the United States, the United Kingdom and South Korea. Next, we describe the SMA’s greenbelt, detail our research method and set the model. Third, we describe the sources and characteristics of the data. Then, we give the estimation results, make a robust test and discuss these. Finally, we offer concluding remarks.
2. Literature Review
Several scholars have studied the effects of greenbelts on land development. Most of these scholars have concluded that greenbelts have caused an increase in inland prices by strictly restricting land supplies in metropolitan areas. However, specific changes in price vary greatly.
Over the past four decades, American scholars have shown that urban containment policies (such as greenbelt policies) change land and property prices [
27,
28,
29,
30,
31]. Correll, Lillydahl, and Singell in the United States estimated the value of nearly 3200 feet of land in three greenbelts in Boulder, Colorado. Their results showed a
$4.20 decrease in the price of a residential property for every foot that it was away from a greenbelt. The average value of the properties that were adjacent to greenbelts was roughly
$54,379, which was higher than the price of areas that were 3200 feet away [
32]. Knaap evaluated greenbelt areas in Oregon; Washington; and Caracas, Venezuela, and found that greenbelts have had a significant effect on land values in both counties.
British researchers have shown that, although individuals believe that new housing only accounts for a small portion of the total housing stock, restrictive policies can increase housing prices [
33,
34,
35,
36]. Greenbelts have increased housing prices by controlling land supplies, which deeply harms the bottom of the market, as emphasized by the results of Barker’s investigation [
37,
38]. To some extent, greenbelt policies lead to land price appreciation that benefits landowners and existing landlords, and this increase places more price burdens on renters and buyers [
39]. Monk and Whitehead also stated that planning constraints such as greenbelts have reduced the rates of housing construction because of delays in land deregulation and planning approval, and because of increased development costs. As scarcity levels have increased, unit values have appreciated. Individual projects can be subject to damages and can become uneconomical, which reduces housing production. Therefore, restricted planning reduces supplies and drives prices higher [
29].
In Korea, an early econometric study by Kim et al. estimated the decrease in housing prices as a result of a relaxation of the greenbelt’s inner edge. They estimated that a 1 km outward movement of the inner edge of the greenbelt, which would add approximately 14% to Seoul’s developable land, would reduce housing prices inbound of Seoul, a subset of the City of Seoul, by 2.7%. This modest decrease in housing prices would be partly due to the relative elasticity of housing demands [
40]. Through a simulation, Kim tested the effects of deregulation on housing prices. By releasing approximately 1.2% of Seoul’s greenbelt, Seoul’s supply of residential land could be increased by 1%, assuming that all new land could be used for residential purposes [
41]. Choi argued that if greenbelts had been removed in 1987, land prices in greenbelts would have risen by an average of 32.1%, but the price of land outside the greenbelt would have fallen by 7.5%. If the price effects had occurred only within the greenbelt, land prices would have dropped by 19.2%. Son and Kim found that greenbelts, rather than natural restrictions such as mountains, are the main cause of shortages of urban land in Korea. They proposed removing greenbelts to meet the growing demand for urban land and to stabilize land prices in Seoul [
42]. Although Bae and Jun did not specifically investigate the land price effects of greenbelts in Seoul, they did indicate that these greenbelts have increased the density of the local population, caused traffic congestion and increased housing prices in the city center [
43]. Jeon and Jae Sik, through an analysis of panel data for 2000 to 2010, showed that greenbelt removal has reduced average residential sales prices more in Seoul than in Gyeonggi Province [
26]. Hee-Jae Kim and Myung-Jin Jun argued that local greenbelt policies have facilitated urban sprawl by restricting land supplies and by encouraging leapfrog development. Over the past 10 years, greenbelt deregulation has eased housing development pressures in southwestern and northeastern Seoul [
44].
The above studies have examined the effects of greenbelt policies on land development, which has great significance. Throughout these studies, researchers have focused on the supply constraining effects of greenbelts by using the hypothesis price model (HPM) and the conditional value evaluation method (CVM) in the early stage as the major empirical methods; the HPM has been used most frequently. However, the HPM method can easily lead to multiple linearity, endogeneity problems and other issues. Land development is caused by a combination of greenbelt policies and other policies. The purposes of greenbelts in each country vary, and problems such as issues of housing affordability and transportation infrastructure accessibility must be considered according to local laws. Thus, the value and the development of land parcels within and outside greenbelt are no longer exogenous factors. Previous studies have disregarded the inner relationships among land development, land prices and land use planning, and laws and regulations. Consequently, few studies have shown whether, through separating the impact of economic development or other factors, land development is influenced by greenbelt policies, let alone the specific effects. In recent studies, the greenbelt effects on land development and housing prices have been analyzed through economic models. These approaches are limited by the simplified nature of the models and by the limits of the analytical methodologies used. Thus, the conclusions of these studies are questionable.