Although previous studies on property value effects of land use policies have focused primarily on agricultural properties and on residential properties in close proximity to preserved areas, this paper examines for the effect on rural residential property values within the preserved area. This effect is examined in the context of Ontario's Greenbelt legislation, which prohibits urban development of rural land within a large area around the Greater Toronto Area (GTA). This preserved area includes not only agricultural properties but also a substantial amount of rural residential properties due to proximity to the GTA. With the amenity value that rural residential properties derive from the surrounding rural landscape, the imposed development restrictions that permanently preserve this open space are anticipated to increase the values of these properties. This expectation is confirmed by the results of a hedonic approach, which indicate a positive effect on the values of rural residential properties within the Greenbelt's boundary. This effect is found to be greater for properties with more surrounding open space and those that are relatively closer to the GTA. These results also provide an estimate of the property value impact of converting all surrounding developable open space to permanently preserved open space.
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