found that the greenbelt increased the aggregate property values of an adjacent neighborhood by $5.4 million resulting in $500,000 extra annual property tax revenue (Correll et al. 1978). The purchase price of this greenbelt was roughly $1.5 million and therefore the accrued tax revenue over three years could pay back the initial cost (Correll et al. 1978). Premiums for homes near parks can vary, and depend on several factors beyond proximity, including the size of the park, the amenities found there, and the density and land use of the surrounding neighborhood. In rural or suburban areas where supply of outdoor space is high, whether in the form of a private yard or easy access to wildlands, demand for park space is low compared to dense urban settings (Crompton 2004). Thus, residents in dense urban areas put a higher value on park proximity than residents in suburban or rural areas (Andersen and West 2006). In addition, the size and type of park are factors influencing home premiums. Large natural area parks had the largest effect on home sale prices in comparison to small urban and specialty parks (Crompton 2004, Lutzenhiser and Netusil 2001). Busy active parks or parks that are poorly maintained have been shown to decrease home values (McConnell and Walls 2005, Crompton 2004).
Hedonic pricing is a helpful method in estimating the economic value of parks; however, it is unable to provide more specific information about how much residents value certain park amenities (McConnell and Walls 2005). Another method to estimate the economic value of parks is contingent valuation (Breffle et al.1998). In this method, people are surveyed and asked how much they are willing to pay for a park or open space. In Boulder, the amount that residents were willing to collectively spend to purchase a 5.5 acre undeveloped parcel for park creation was $174,000 more than the amount that a construction company had recently paid for it (Breffle et al.1998). In general, studies using either contingent valuation or hedonic pricing show the high value of preserving parks and open space (McConnell and Walls 2005). In addition to the value that parks add to nearby real estate, parks also have other economic benefits. City parks, such as San Antonio’s Riverwalk Park or New York’s Central Park, often become important tourism draws that contribute to local businesses (Waits 2005). The availability of parks and recreational facilities can be significant factors for companies in deciding where to relocate (Crompton 2000). And, according to a 3-year Chicago Urban Forest Climate Project, increasing tree cover by 10% can lower total energy use for residential heating and cooling by 5-10% annually, saving $50-$90 per dwelling unit (McPherson 1994).
Figure 2–4. Parks provide habitat.
R2G Background
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