Spatial determinants of land prices: Does Auckland’s metropolitan urban limit have an effect?

Land prices within monocentric cities typically decline from the centre to the urban periphery. More complex patterns are observed in polycentric and coastal cities; discrete jumps in value can occur across zoning boundaries. Auckland (New Zealand) is a polycentric, coastal city with clear-cut zoning boundaries. Information on land price patterns within the city is important to understand the nature of development and the effects of regulation in causing discrete land valuation changes. One key zoning regulation in Auckland is a growth boundary, termed the metropolitan urban limit (MUL). We examine whether the existence of this growth limit affects land prices. We do so in the context of a model of all Auckland land values over a twelve year period, finding a strong zoning boundary effect on land prices. Specifically, after controlling for other factors, we find that land just inside the MUL boundary is valued (per hectare) at approximately 10 times land that is just outside the boundary.