The Effect of Strict Agricultural Zoning on Agricultural Land Values: The Case of Ontario's Greenbelt

In 2004, the provincial government of Ontario passed legislation that imposed a moratorium on urban development of agricultural land within a “Greenbelt” boundary. This legislation, which became known as the Greenbelt legislation, has a direct effect on over 1.8 million acres of land located near one of the larger metropolitan areas in North America: the Greater Toronto Area. We use a hedonic model to examine 7760 farmland sales and we find evidence that the Greenbelt legislation influenced farmland property prices; the effect depends on the proximity of the farmland to the Greater Toronto Area.