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Home » Library » An Investment that Pays: The Economic Benefits of Parks and Open Space

An Investment that Pays: The Economic Benefits of Parks and Open Space

This report reviews the literature, including case studies, dealing with the economic benefits of creating parks, preserving working land, preserving land prone to flooding, conserving ecosystem benefits, and preventing sprawl development. Parks and preserved lands boost land values and property taxes, attract residents and businesses, encourage economic development, boost the economy of surrounding areas, save money over some types of development, preserve ecosystem services, and reduce health care costs. One example given in the paper is how New York used $1.2 billion to restore and protect natural land in New York City’s watersheds, which prevented the need to build a $6-$8 billion water filtration plant.
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The following show the main benefits described in this paper, and some of the examples used.

Parks and preserved open space boost land values and property taxes:

  • In Grand Rapids, Michigan, a study of property sales from the late 1970’s through 2000 in 3 residential neighborhoods near preserved forests showed that lots bordering the preserved forests sold for 19 to 35% more than those a greater distance from the forests. During the same period, in 3 residential neighborhoods near unpreserved forests, there was no increase in property value for those lots bordering the forests in two of the neighborhoods, and a much smaller increase in the third.

Parks boost local economies by attracting residents and businesses:

  • Many businesses today are not tied to locating near specific raw materials or transportation modes. Businesses often select locations with high quality of life, such as those with parks, open space and easy outdoor access, to attract highly skilled workers.
  • Many communities actively work to attract retirees, especially affluent ones, as they often pay more in local taxes than they use in services (i.e., they don’t use the school system.) A 1998 study of retirees who moved to the Texas Lower Rio Grande Valley found that, amongst 26 reasons to relocate upon retirement, “desire to live in a more recreationally enjoyable area” and “desire to live in a place where recreation opportunities are plentiful” ranked only after “desire to get away from cold weather”.

Good parks encourage economic development:

  • In 2007, Philadelphia’s park system provided the city with revenue of $23.3 million, municipal savings of $16 million, resident savings of $1.15 billion, and a collective increase of resident wealth of $729 million. These figures included more than $1.08 billion in what economists call “direct-use value” of parks, including sporting activities, walking, picnicking, and other park visitation.

National parks and refuges benefit surrounding areas:

  • In 2006 recreational use of the National Wildlife Refuge System generated almost $1.7 billion in total economic activity, almost four times that year’s $383 million federal appropriation to the refuge system.
  • In Kane County, Utah, a comparison of the 4 years following the 1996 creation of nearby Grand Staircase-Escalante National Monument to the 4 years prior to its creation found that unemployment dropped by more than half, per-job earnings increased 13%, property values increased, and hotel-room revenues increased by about 20%.

Conservation is a money saving alternative to some development:

  • The large lot size characteristic of sprawl increases costs for water and sewer services. A 2002 study found that, with other factors held constant, an increase in lot size from 0.25 to 1 acre nearly doubles the cost to a developer for installing sewer and water service and each household then paid more for water and sewage services: $392 versus $204 annually.
  • By using an environmentally friendly design in a 677-acre development 40 miles northwest of Chicago, developers saved $1 million in infrastructure costs, and preserved 350 acres of open space within the development, including 160 acres of restored prairie, 158 acres of active farmland, 13 acres of wetlands, a 22-acre lake, a village green, and several neighborhood parks.

The ecosystem services delivered by conserved land reduce costs:

  • Ultimately, all taxpayers end up bearing the cost to rebuild after a natural disaster. Often, purchasing land for a public park or preventing development through the purchase of a conservation easement may be the most effective way to decrease risk and minimize damage from natural disaster.
  • Florida’s wetlands provide storm protection valued at $106,333 per acre per year, New York’s wetlands at $689,700 per acre per year and New Jersey’s saltwater wetlands at $208,973 per acre per year.
  • In 1989, the Environmental Protection agency ordered New York City to build a water filtration plant that would have cost between $6 and $8 billion water to construct and $300 million a year to operate. Instead, the city got the EPA’s permission to spend $1.2 billion over the first ten years to restore and protect its watersheds, letting a 2,000-square-mile forest do the work of the water-filtration plant.
  • The city of Auburn, Maine saved $30 million in capital costs and an additional $750,000 in annual operating costs by spending $570,000 to acquire and protect land in its watershed.
  • In 1974, Arcata, California considered constructing a $25 million sewage treatment plant to meet new federal wastewater standards. Fearful of the need to sprawl outward to pay for the plant and how that would impact the community, Arcata instead converted a coastal brownfield into a marsh to treat wastewater naturally. Today, not only does the Arcata Marsh and Wildlife Sanctuary process the town’s sewage over 154 acres of fresh and saltwater, marshes, tidal mudflats, and grasslands but it sustains 100 plant species, six species of fish, and 300 species of birds and mammals. It also hosts 150,000 human visitors annually and serves as a research site for students, who in turn provide technical support, data collection, and monitoring that the town could not have otherwise afforded.
  • When, over the past three decades Houston’s tree cover declined by 16%, the city lost $237 million in stormwater management services and $38 million in annual air pollution removal services.
  • In San Antonio, Texas, a 22% decline in tree cover between 1985 and 2001 is estimated to have added $17.7 million in residential energy costs each summer.

Nearby parks promote exercise and reduce health care costs:

  • 255,000 Philadelphia residents exercise in that city’s parks with enough frequency to improve their health, resulting in more than $69.4 million in health savings.
  • A study of adolescent girls found that those living closer to parks exercised more than those living farther away.

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Last modified by Nate Lotze

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