Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/205313 
Year of Publication: 
2019
Series/Report no.: 
Tinbergen Institute Discussion Paper No. TI 2019-023/VIII
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
We measure the economic effects of urban growth boundaries or greenbelts that prohibit new construction beyond a predefined urban fringe. We focus on England, where 13% of the land area is designated as greenbelt land. Using spatial differencing, we show that the external effects of these regulations are substantial (about 15-20%) but very local. In contrast to the previous literature, we find no evidence for internal or 'own-lot' effects. We further show that supply effects are important: greenbelt policy reduces housing construction in greenbelts by about 80%, thereby increasing prices throughout the housing market by about 4%. We show that greenbelt policy implies a negative welfare cost of about £ 7.5 billion a year (0.5% of England's GDP). We further find evidence that greenbelts are no popular recreational destinations (proxied by geocoded pictures), and do not imply longer commutes or more housing CO2 emissions.
Subjects: 
housing
supply constraints
greenbelts
urban growth boundary
open space
Document Type: 
Working Paper

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