The impact of the urban park sunset rule on land value: The case of Yongin in Gyeonggi Province, South Korea

Abstract

Intense urbanization across the world has increased land scarcity, making it challenging to secure land for public parks and open spaces. To construct urban green space, the Korean government expropriated 904.1 km2 of private land from the 1960s onward. However, under the Urban Park Sunset Rule (UPSR), approximately 405.7 km2 of undeveloped green space sites were released and returned to their owners by 2020. This study investigates the time-varying effect of the UPSR using a two-way fixed effect panel model, covering the period from announcements of the UPSR in 2000 and 2005 to its implementation from 2015 to 2020. We found that the UPSR exerted a small positive externality on the adjacent land market. After the first UPSR announcement, the effect was negative for several years; however, released land began to exert a stronger positive externality after the second announcement, and the maximum effect was observed two years after the first implementation: a 5.71% increase in value per 100-m approach to the subject land. Before the first announcement, the effect was mainly observed within 500 m of released sites. After the second announcement, the effect was observed within the 500–1000-m zone. This study suggests that land use deregulation may generate effects in nearby areas that vary in terms of distance and magnitude in relation to the timing of announcements and implementation.