Urban containment policies and urban growth

Abstract

While there has been controversy over the negative and positive effects of urban containment policies (UCPs), little is known about their impact on urban growth with policy tightness. This paper empirically analyses UCP impacts on changes in population, employment, built-up areas, and housing values. A simultaneous equation model is estimated, with, as endogenous variables, the above changes at the city level. Both stringent containment policies (SCP), such as greenbelts and urban growth boundaries, and less stringent containment policies (LSCP), such as urban service areas, are found to have significant impacts on changes in population, employment, housing values, and city land area. SCPs have positive effects on changes in population and housing values twice as large as LSCPs, suggesting that SCPs more successfully accommodate new growth within growth boundaries and that housing values increase with the tightness of UCPs.