The Impact of Parks and Open Space on Property Values and the Property Tax Base
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THE IMPACT OF PARKS AND OPEN SPACE ON PROPERTY VALUES AND THE PROPERTY TAX BASE by John L. Crompton CONTENTS Preface i Executive Summary 1 Chapter 1 The Basic Principles 5 Context of the Issue 7 The Basic Principle 9 Potential Negative Influences of Parks on Property values 12 Conclusions 14 Vehicles for Capturing Enhanced Property Increments to Pay for Park 16 Cost Excess Purchase / Condemnation 16 Spatial Assessment Districts 18 Tax-Increment Financing Districts 20 Chapter 2 The Early Empirical Studies 25 The Impact of Parks on Proximate Property Values 27 The Impact of Parkways on Proximate Property Values 34 The Impact of Playgrounds on Proximate Property Values 35 Conclusions 40 Chapter 3 The Later Empirical Studies 43 Results from Urban Studies 46 The Influence of Different Park Design and Use Characteristics 50 Findings from Non Urban Studies 55 The Impact of Large Federal or State Park or Open Space Areas on 58 the Local Tax Base Findings Not Supportive of the Proximate Principle 59 Conclusions 61 Chapter 4 The Relative Service Cost Efficiencies of Parks and Open Spaces: 65 Findings from Cost of Community Services Analyses Introduction 67 The “New” Municipal Math 69 Cost of Community Services Analysis Procedures 71 Review of Empirical Studies 75 Park and Open Space Implications 80 Conclusions 83 Chapter 5 The Evidence Relating to Greenway Trails 87 Review of Empirical Studies 91 Discussion 97 Chapter 6 The Analogous Case of Golf Courses 99 The Analogy with Parks 101 Planning and Design Strategies 102 Alternative Configurations 102 The “Windows” Principle 104 The Bottom Line 106 Appendix 1 The Three "Public" Benefits that may accrue from Park and Recreation Ser- 109 vices Appendix 2 Bibliography of Empirical Articles Addressing the Impact of Coastal or 113 Inland Waters on Proximate Property Values PREFACE There are two ways to measure the eco- tribution made by park and recreation agencies nomic value of urban parks and open spaces. through their role in attracting visitors.1 A fu- The first type of measure captures the capitali- ture publication will review the role of park zation worth of parks by measuring their im- and recreation facilities and services in encour- pact on the value of land and property in their aging businesses and retirees to relocate to a immediate catchment zone. The second type of community. These other economic contribu- measure is the economic value which residents tions are briefly described in Appendix 1. in the urban area receive from visitors, and The monograph reviews the principles and from businesses and retirees, whose decisions empirical evidence relating to the economic to come to the area are at least in part predi- impact of parks, open spaces, greenways, and cated on the availability of parks and open golf courses on property values. In the context space. However, the use of both measures will of this publication, the economic contributions provide only a minimum estimate of the eco- of public park land and open space derive from nomic value of parks and open space because two premises. First, they often increase the the measures are not able to capture some di- value of proximate properties, and the resultant mensions of the benefits these amenities pro- incremental increase in revenues that govern- vide to a whole urban area. Such benefits in- ments receive from the higher property taxes is clude air cleansing, ground water storage, flood frequently sufficient to pay the acquisition and control, elimination of waste, alleviation of development costs of the amenities. This view environmental stress and pleasing vistas. was widely articulated in the early years of the This publication focuses on the first type parks field, but in recent decades it appears to of measure and addresses the economic contri- have disappeared from the lexicon of advo- butions of parks and open space through their cates. Few park professionals today appear to impact on property values. A previous mono- espouse it, and the author has never heard it graph in this series reported the economic con- articulated by an elected official! ii PREFACE The second premise is that public expendi- tradition of the principle, and its effectiveness tures increase with development, because the in persuading decision-makers to invest in costs to a community of servicing residential parks. The later studies reviewed in Chapter 3 sub-divisions usually exceed the tax revenues tend to use more sophisticated research designs that accrue from them. Thus, the conversion of and statistical techniques to control for vari- open space to housing often results in an in- ables other than park land and open space that creased tax burden on existing residents. may influence property values, which enhances Many of the sources used in this mono- the credibility and acceptance of their findings. graph were “fugitive” documents. That is, the A corollary proposition to the positive im- material had not appeared in scientific journals pact of parks on property values is that the net or other mainstream publication outlets and, cost to a community of maintaining and servic- thus, was difficult to find and access. Much of ing parks and open space is less than the net this literature has been produced by graduate cost of maintaining and servicing residential students for theses or dissertations, land trusts, real estate development. This corollary is con- park advocacy groups, or planners and consult- sidered in Chapter 4 which reviews the princi- ants for the narrow purpose of making or ples of fiscal impact analysis and summarizes evaluating the case for parks or open space in the results from approximately 60 of them. The specific local contexts. The scientific quality of chapter consistently documents the negative this work varies widely, but the volume of ma- fiscal impacts incurred by a community when terial and the remarkable consistency of find- open space or potential parkland is usurped for ings reporting the positive impact of parks and residential development and provides strong open space on property values is sufficiently evidence of support for the corollary. striking that concerns over methodological is- The evidence relating to developments sues are unlikely to affect the conclusions ema- proximate to greenway trails is reviewed in nating from this body of literature. Chapter 5. There was some evidence that The first chapter discusses the basic prin- greenway trails had a positive impact on the ciple that explains how increases in proximate saleability and value of proximate property, but property values around a park can be sufficient the dominant sentiment was ambivalence indi- to pay for the park’s acquisition and develop- cating they had no impact on these issues. ment. A discussion of excess condemnation, The discussion in Chapter 6 indicates de- special assessment districts, and tax-increment velopers incorporate golf courses into property financing districts is included since these are developments because they have found that all financing mechanisms embracing this prin- proximate lot land values in a development ciple that have been used by communities to increase sufficiently to ensure an enhanced fund park developments. profit margin, even after the substantial costs In Chapters 2 and 3, the empirical evi- of acquisition and development of a golf dence that validates the principles described in course have been met. The high visibility and Chapter 1 is reviewed. The early studies pre- success of these golf course developments sented in Chapter 2 are likely to be considered demonstrates by analogy the probable eco- “naïve” today, because they did not use the nomic viability of community investments in statistical tools available to more contemporary park land and open space. researchers. Nevertheless, they constitute part All studies that pertained to the issues dis- of the body of knowledge in this area. They cussed in the monograph are reported, irrespec- also document the rich historical pedigree and tive of their conclusions. An effort was made PREFACE iii to be comprehensive, rather than selective, and The prime motivating force behind this to avoid the review becoming only an advo- publication was Ms. Terry Hershey, the re- cacy treatise. Thus, results from all studies that doubtable doyenne of the conservation move- were found which do not support the case ment in Texas. She heard me discuss these is- made by park and open space advocates are sues over a period of several years and invaria- included. However, there were relatively few bly commented: “When are you going to write of these. While this suggests strong empirical it all down? This is important information for support for advocates’ positions, it is recog- those of us fighting to protect the critters, open nized that there may be a lesser probability of space and parks.” Ms. Hershey is a board research which is not supportive of these posi- member of the National Recreation Founda- tions being reported in the literature. Unfortu- tion. When Dean Tice, the executive-director nately, negative findings sometimes are viewed of NRPA proposed to the Recreation Founda- as being unexciting and not as worthy of publi- tion that this monograph be funded, she enthu- cation as positive findings. siastically endorsed the proposal. So, Terry, This publication was commissioned by the thanks for all the pushing and support. National Recreation and Park Association with The author is grateful for the assistance of funding provided by the National Recreation Ms. Jennifer Dempsey and Ms. Melissa Adams Foundation. It is a component of the National with American Farmland Trust who provided Recreation and Park Association’s commit- much of the material included in Chapter 4. He ment to documenting the scientific knowledge is also very appreciative of the assistance pro- base pertaining to the contribution made by vided by Ms. Marguerite M.