Urban containment policies and housing prices: an international comparison with implications for future research

Policies of urban containment are widely used in land-use planning and as a means of reducing urban sprawl and of preserving farmland. This paper reviews the current state of knowledge about the effects of urban-containment boundaries on house prices. It is concluded that urban containment programs do affect land prices, and that housing producers do not always respond to higher land prices by increasing the density of development. In relation to aggregate housing prices, the effects of urban containment policy depend on factors such as style of policy implementation, local housing markets, and pattern of land ownership. The demand side of the housing market may be a stronger determinant of prices than local urban containment policies. Nevertheless, it is concluded that local planners can play a significant role in relation to the severity of housing price inflation attributable to urban containment policies.