Analysis of Urban Land Shortages: The Case of Korean Cities

Abstract

Both natural constraints and government regulations on urban land use can cause urban land shortages, and hence higher prices of urban land and housing than otherwise. There have been attempts to investigate the differential effects of natural and contrived restrictions on land price. For w x example, Rose 10 found that natural constraints have a significant positive impact on land value while monopoly zoning power makes a smaller contribution in explaining inter-city variations in urban land price. w x On the other hand, Pollakowski and Wachter 8 analyzed the impact of land use controls measured by an index of restrictiveness of zoning and confirmed that land use regulations raise the prices of housing and developed land. To the best knowledge of the authors, however, none of the published empirical studies including the two cited above actually measure the amount of shortage of urban land at the city level. Instead, land supply variables are employed together with demand variables such as income and population size to determine their impact on land or housing prices. This study seeks to fill the gap in the literature first by developing a measure of the urban land shortagersurplus from an analysis of land price