The effects of Seoul’s greenbelt on the spatial distribution of population and employment, and on the real estate market

Abstract

This paper examines the effects of Seoul’s greenbelt on the distribution of population and employment, and on the real estate market, under the assumption of the complete relaxation of the greenbelt using the random utility-based metropolitan input–output model with an endogenous land market for the Seoul metropolitan area. Simulation results show two important consequences of the greenbelt release. First, the greenbelt release would attract more residents and jobs into greenbelt zones and reduce the population and number of firms in both the central city and outer sides of the greenbelt, thereby implying the reduction of inner city densification and of development beyond the greenbelt. Second, both residential and nonresidential space rents would have declined for the whole metropolitan area from 0.4 to 13.7% had the greenbelt been completely released in 2006, thereby indicating that Seoul’s greenbelt made a contribution to raising space rents by limiting land supply.