May 24, 2006
IMPACT OF OPEN SPACE ON PROPERTY VALUES
By: Paul Frisman, Principal Analyst
You asked if any studies have been conducted on the effect government spending on open space preservation has on neighboring property values. We could find no report specifically addressing the impact of government spending on open space, but did find a number of studies on the effect of open space preservation generally on nearby property values. We link to three reports that summarize such studies and briefly discuss their findings.
There have been a number of studies on the impact of open space preservation on the value of nearby property. Most studies have found that preserving open space land generally, but not always, increases the property value of nearby homes. The studies use a variety of methods to determine this, and consider such variables as the type, location, and use of the open space, (large rural areas or city parks; passive vs. active recreational use) and the distance between the open space property and the residential property in question.
We provide links to three reports that summarize the methodology and results of these studies: The Impact of Parks and Open Space on Property Values and the Property Tax Base, commissioned by the National Recreation and Park Association; The Value of Open Space: Evidence from Studies of Nonmarket Benefits, by Resources for the Future, a national nonprofit organization; and Economic Impacts of Protecting Rivers, Trails and Greenway Corridors, prepared for the National Park Service.
IMPACT OF PRESERVING OPEN SPACE ON PROPERTY VALUES
According to the Impact report, the economic contributions of public park land and open space are twofold: first, they often increase nearby property values (resulting in more property tax revenue to the town), and, second, the town avoids costs associated with providing municipal services to a residential development that might otherwise be located on the site.
The Impact report notes that homebuyers are generally willing to pay more for property located close to parks and open space. The Rivers, Trails and Greenways study states that the real estate industry found that 77.7% of home buyers and shoppers rated natural open space as either “essential” or “very important” in planned communities. However, this is not always the case, especially where parks are poorly maintained, noisy, or congested. The Rivers, Trails and Greenways study also notes that increases in property values depend upon the ability of developers and planners to minimize potential homeowner-park use conflicts and provide access to the open space and the views it offers.
The Impact report notes that is hard to quantify the impact of open space on property values because of the many different types and uses of open space, the various uses of the land surrounding them, and other factors. But it states that a 20% increase in value for property adjoining or fronting a passive-use park is “a reasonable starting point.” The increase is higher if the park is large, well maintained and primarily used for passive purposes, such as hiking. The increase is lower for property that abuts smaller open space tracts or open space used for active recreation, such as ball fields. Distance from the open space also plays a role. Property owners living closer to open space enjoy a greater benefit than those whose homes are further away.
Specific Property Values Findings
Among the specific studies the three reports cite are the following:
● Boulder, Colorado. This 1978 study found the average value of properties adjacent to a 1,382-acre greenbelt was 32% higher than those located 3,200 feet away. On average, there was a $4.20 decrease in the price of a home for every foot further away from the greenbelt. In one neighborhood that took more advantage of the open space in its planning, this price decreased by $10.20 for every foot further away.
● Worcester, Mass. This early 1980s study found that, on average, a house located 20 feet from a park sold for $2,675 more than a house 2,000 feet away.
● In New York, the price of land adjacent to the Adirondack Forest Preserve was about $20 per acre more than non-adjacent land in 1978, a 17.5% increase in value.
● A 1993 Maryland study found preservation of a significant tract of forest land accounted for at least 10% of the value of a house within one mile of the tract in Baltimore County and at least 15% of the value of a house within one-quarter mile.
● A study conducted in Amherst and Concord, Massachusetts, found that clustered housing with open space appreciated at a higher rate than conventionally-designed subdivisions. Clustered homes in Amherst appreciated at an average annual rate of 22%, compared to 19.5% for more conventional subdivision, a difference in average selling price of $17,100 between the two developments in 1989.
● Another study noted a correlation between the value of property in Philadelphia, Pennsylvania and its proximity to that city's 1,300-acre Pennypack Park. In 1974, the park accounted for 33% of the value of a plot of land located 40 feet away; nine percent for property located 1,000 feet away, and 4.2% for property at a distance of 2,500 feet. The study estimated a net increase in real estate value of $3.3 million directly attributable to the park.