The central government in South Korea has legitimated the Act of National Land Planning Utilization to protect the national land for promoting public welfare and livelihood since 2009. Previous studies have argued that, as part of an urban and county management plan under the act, designating a special-purpose district to preserve scenery (hereafter, scenic district) is likely to cause the decrease of land value, possibly violating private properties. No empirical research, however, has examined whether designating the districts lead to the change of land value. Along this vein, this study aims at empirically investigating what effect the designation of scenic districts has on the land value around the districts.
To do this, the primary data was collected as follows. Firstly, we check the information and locations of the scenic districts, which local governments currently operate with urban areas, nature, and waterside. And then, their official land prices valuated before and after the designation were compared. Finally, 12 scenic districts were selected as our observation cases, which each district has above 25 parcels internally and externally in the same service area. The districts were categorized into their locations: mega, major, and general cities, and counties so as not to be over-weighed a certain area.
Based on the comparison results of the scenic district regulations, the three-year land values before and after designating the district was plotted. Unlikely the expectation that the changing patterns between the inside and outside of the districts will be different, the plot reveals the similar pattern of the land values. The t-test was conducted to figure out whether the differences in the values increase or decrease between the inside and outside of the districts are statistically significant or not. The results of this analysis show that the decrease and/or slowdown of the land value of scenic districts was not dramatic regardless of their locations (i.e. mega, major, and general cities) and their types (i.e. urban areas, nature, and waterside).
For further investigation, the present study adopted hierarchical regression analysis in considering a wide range of variables, including items of the Land Price Index Table, the year of designating the scenic districts in our observation cases, a dummy of designation, and types of the scenic districts. The regression model for the effect of designating the scenic districts on the increase of land values shows high levels of explanation and significance. The model shows that, while the dependent variables are significant to the level of land value, some of them are lower significant to the growth rate of land value. However, the results of analysis confirm that designating the scenic districts has negative effect on the increase of land value. Another regression model for the effect of designating the scenic districts on the increase of land values by categorizing the types of scenic districts also shows high levels of explanation and significance. The model also shows that, while dependent variables are significant to the level of land value, these are lower significant to the growth rate of land value. However, the results of analysis confirm that designating the scenic districts has negative effect on the increase of land value. The biggest negative effect shows in the scenic districts in nature followed by urban areas and by waterside in order.
Much of prior research has investigated factors determining the change of land value. In particular, many of prior research analyzed how development plans and policy in certain areas lead to the change of land value. On the one hand, the present study differentiates from and contributes to such research steam because this study investigates empirically the effect of designating the scenic districts on the growth rate of land value. The findings of this study supports the previous studies'' argument that designating the scenic districts brings about the decrease of land values involved in the districts and thus it is likely to cause the violation of private properties. Based on the results, several suggestions are made in terms of the designation of scenic districts.