How Parks and Green Spaces Improve Real Estate Values
When I ran last week’s post about Harris County’s new Edgewater Park, I got pushback from several people who feared more green spaces could bring in outsiders and create traffic woes.
Value of Green Spaces in Reducing Flood Damage
Since Harvey, hardly a day goes by that we don’t read about the value of parks and green spaces in protecting us from flooding. So I was surprised at the resistance. How many more homes would have flooded in Kingwood had it not been for greenbelts and parks along the east and west forks? Google Earth shows approximately 3200 acres currently used for golf, parks and greenbelt trails in Kingwood. When floods recede these areas usually require little more than some extra maintenance.
Even after Havey, the repair costs for all of Kingwood’s parks put together was less than one home that I know of near the river.
Plus, consider this. Had you divided those 3200 acres up into typical quarter acre lots and put a home on each, 12,800 additional homes would have flooded. Every single one. And if each suffered a quarter million dollars worth of damage, the total would have exceeded $3 billion dollars.
Kingwood and Forest Cove: 4X the Recommended Green Space
Kingwood and Forest Cove are exceptional in the amount of green space that we have per household. About 20% of our acreage is in parks, golf courses or greenbelts, something that makes us especially attractive to active, younger families with children. It’s one of our distinguishing characteristics and most attractive features.
Many cities cannot reach the minimum of 10 acres of park space per 1,000 residents recommended by the National Recreation and Park Association (NRPA). Kingwood has four times that! Truly, we were blessed by a visionary developer.
Floods Negatively Impact Price
Floods clearly affect home values in a negative way. A study of 8000 homes in a flood-prone area of North Carolina after Hurricane Floyd in 1999 confirmed this. It found that homes outside of a flood plain had a higher market value than equivalent homes inside the flood plain. Further, the price discount for homes inside the flood plain was significantly greater immediately after the hurricane.
Proximity to Parks Positively Impacts Price
But what is the correlation between home values and proximity to parks. Does the proximity help or hurt (as some people suggested)?
There’s been a fair amount of research on this subject. When I googled it, the search returned 330 million results. Seriously! I scanned the first five pages. Luckily, there seems to be consensus. The answer is, “Yes, there is a positive correlation.”
Some of the landmark studies on this subject were conducted at Texas A&M. One by John Crompton in 2001 reviewed 30 scholarly articles and found that abutting a passive-use park, such as East End, had a 20% positive impact on property values. Crompton also found that abutting active-use parks (such as ball parks or soccer fields) with large numbers of users had little discernible impact, but that properties a block or two away experienced a 10% bump.
800% Premium for Proximity to Central Park
Since Crompton’s study, mathematical analysis has become more sophisticated. The results are not as dramatic, but still positive. They often use a statistical technique called hedonic analysis that helps tell us how much of a home’s increase in value can be attributed to a particular factor, such as proximity to a park versus proximity to a park, say, downtown. Having a view of Central Park in New York City (as opposed to your neighbor’s air vent), for instance, bumps a home’s value by a whopping 800%. Furthermore, the 800% increase can be seen up to 1500 feet (about a quarter mile) from the park.
Role of Hedonic Analysis in Pricing
Hedonic analysis is particularly popular in real estate. It focuses on the things that people like most or least about property, in other words, what drives or hurts sales. It gages the influence of various pleasant and unpleasant factors on prices. For instance, proximity to the park might be visually pleasant, but noise created at the park might be unpleasant. The word “hedonic” comes from hedonism, the pursuit of pleasure. In this case, the focus on pleasure is as a component of price. The more pleasure people get from something, the higher the price it commands.
The newer studies also isolate price variance by the type of park (active-use, passive, greenbelt, near water, urban, rural, etc.).
Another review of scientific literature by Sarah Nicholls found that in Austin and Indianapolis, proximity to greenbelts accounted for 0%, 2%, 6%, 12% and 15% of average sale value. The variance resulted from different types of greenways, proximity to access points, maintenance, the beauty of vegetation, and the amount of regulation/protection.
Nicholls also found that, “In no case reviewed by this author to date has an open space been found to have a negative impact on surrounding property values.”
Nicholls concludes that it is possible, using hedonic analysis, “to place dollar values, verifiable using rigorous scientific techniques, on the economic contributions of …(green space) … amenities to local communities.”
Offsetting the Negative Influence of Harvey
As the county buys flood-damaged homes below Hamblen Road, I hope they create a greenbelt between River Grove Park and Edgewater Park. It would reduce repetitive flood losses to FEMA and the National Flood Insurance Program. It would protect the community from future development that could exacerbate flooding. And it would turn a negative into a positive impact for surrounding homeowners. The county estimates that its current greenway, which stretches from 59 to 45 along Spring Creek, could extend all the way to Tomball within four years. Connecting that trail to Kingwood’s network, could in my opinion, create the kind of high profile amenity that helps counteract any lingering negative influence of Harvey.
Personally, I can’t wait. It may be what I need to get this old bag of bones back on a bike again.
Posted by Bob Rehak on October 27, 2018
424 Days Since Hurricane Harvey