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Green space borders—a tangible benefit? Evidence from four neighbourhoods in Surrey, British Columbia, 1980–2001
ARTICLE IN PRESS
Land Use Policy 21 (2004) 129–138
Green space borders—a tangible benefit? Evidence from four neighbourhoods in Surrey, British Columbia, 1980–2001 David W. Hobdena, Gary E. Laughtonb, Katherine E. Morganc,* b
a Landwealth Applied Research, 1702–9500 Erickson Drive, Burnaby, BC, Canada V3J 1M8 Colliers International Realty Advisors Inc., 17th floor, 200 Granville Square, 200 Granville Street, Vancouver BC, Canada V6C 2R6 c O’Brien and Company, Inc., P.O. Box 10705, Bainbridge Island, WA, 98110 USA
Received 21 December 2001; received in revised form 10 October 2003; accepted 15 October 2003
Abstract A generally positive impact of parks and open spaces on nearby property values has been documented in several previous studies. This study bolsters those findings and extends the scope of empirical evidence. The statistical analysis employs mean-difference ttests on matched pairs of sales over 20 years and the location is suburban Canada. In addition, a detailed typology of green spaces, emphasizing greenway corridors, is defined. Findings support the notion that most types of green space increase the value of adjacent, single-family property and that corridors in particular have a significant positive impact on adjacent property values. However, there are exceptions with negative impacts on value and the overall range of values is less than reported elsewhere. r 2003 Elsevier Ltd. All rights reserved. Keywords: Green spaces; Parks; Open spaces; Greenways; Property values
Introduction Suburban growth has been a concern throughout North America over the last few decades. Part of this concern stems from a paradox: people desire to live in ‘the country,’ surrounded by more open, green and natural spaces (Smallwood, 1993) (this is one of the drivers of geographic growth or sprawl) but suburban development itself threatens these open spaces (Heacock, 1997; Kelly and Zieper, 2000). Along with the loss of open space, a popular trend in parks and recreational land use are greenways, a connecting corridor of green space, usually featuring a pathway for hiking, biking and other ‘linear’ recreational activities (Platt, 2000). Green space provides aesthetic, recreational, social, and environmental benefits to surrounding communities. Suburban municipalities are faced with challenges in deciding where to protect or create green space, what type it should be, and how to do it economically, politically and environmentally. The environmental benefits of habitat provision as well as air and water *Corresponding author. Tel.: +1-206-842-8995; fax: +1-206-8428717. E-mail address: [email protected] (K.E. Morgan). 0264-8377/$ - see front matter r 2003 Elsevier Ltd. All rights reserved. doi:10.1016/j.landusepol.2003.10.002
management require an entirely different assessment process and are well beyond the scope of this study. However, understanding the direct economic impacts on neighbouring properties can help with the economic and political decision-making. Other economic benefits are widely assumed, such as attraction of businesses, direct recreational and tourism spending, etc. (Kelly and Zieper, 2000; Barrette, 2001), but these assumptions are also beyond the scope of this study. In this study, we focus on measurable differences in property values between single-family lots that border green space and comparable properties that do not. Understanding the impact of green spaces on property value can help municipal planners estimate the additional property tax revenue they can expect from leaving areas undeveloped, which can offset the cost of acquisition. It can also be used to estimate the trade-off between open space uses and development density. Recent analysis has found that it is cheaper to create parks than to allow residential development (Crompton, 2000). The cost of servicing new development is higher than the tax revenue from that development, adding a further burden to existing taxpayers. An ability to point to empirical evidence of property value increases may also help win citizen support for new greenways and park space. The City of
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Surrey, in British Columbia, Canada is the subject study area, and provides a good example of the development trends discussed above. Below is a review of recent literature on green spaces and property values and how this study complements other studies. The subsequent sections describe the study area, data, analysis method, results, and conclusions. Two of the most recent studies on the impact of green spaces on property value were done in Portland, Oregon. The first, reported in two different articles (Bolitzer and Netusil, 2000; Lutzenhiser and Netusil, 2001) used hedonic pricing to estimate the property value affect within 1500 ft (457 m) of four general types of open space—public parks, private parks, cemeteries, and golf courses. Mahan et al. (2000) also focused on Portland, but looked at wetlands rather than parks. Several reports summarize a variety of literature including some from different unpublished sources (graduate theses, government and consultant studies, etc.) and give a good overview of property value studies. These reports include other assessment approaches, such as willingness to pay and opinion surveys, as well as other aspects of economic value (Crompton, 2000; Lerner and Poole, 1999; National Park Service and Rivers, 1995). Grudnitski and Do (1997) looked specifically at golf courses in Rancho Bernardo, CA. Earlier studies include Correll et al’s (1978) examination of greenbelts in Boulder, CO and Weicher and Zerbst’s (1973) investigation of parks in Columbus, OH. Open space more generally, as undeveloped land, has been examined for its influence on land value. Irwin (2002) and Irwin and Bockstael (2001) found that the premium value was in the lack of likelihood that development would take place, rather than in the specific type of open space, when they looked at residential property values near undeveloped land in Maryland. Specifically, preserved land had a larger spill-over effect than land that might be developed, regardless of whether land was agricultural or forested land. Similarly, Cheshire and Sheppard (1995) found that there was a positive impact on residential values only when there was a sufficient scarcity of open space in the town as a whole. They examined the effects of both private and publicly held undeveloped lands in two towns in England. In his 18th century proposal for Central Park in New York City, Frederick Law Olmsted put forth the idea that parks improved property values and the corollary notion that this more than justified the costs of their creation. It has taken over a 100 years for statistical methods and computer tools to assemble a substantial body of work to support this empirically. However, on intuition alone, few would argue with the assertion that Central Park has more than paid for itself with the subsequent property tax of its bordering properties. For the most part, these studies used a hedonic price method, were based in urban areas of the US, and used data from time
periods of less than 5 years. They found that park and open space proximity generally added to property value except where there were negative externalities such as traffic to a recreation facility, poor maintenance, or the presence of criminal or other ‘undesirable’ populations in the park. Crompton (2000) found few empirical studies of greenways specifically, though several studies exist that used other assessment tools. This study bolsters previous findings and extends the scope of empirical evidence in several ways. The time period covers 20 years of sales data, the location is suburban Canada, a detailed typology of green spaces is defined which emphasizes greenway corridors, and the statistical analysis employs mean-difference t-tests on matched pairs of sales.
Study area and data The City of Surrey is British Columbia’s second largest municipality in both population and area. Surrey is located approximately 25 km southeast of Vancouver and about 200 km north of Seattle, WA. It lies between the Fraser River on the north and the 49th Parallel (the US–Canada Border) on the south. Within the greater Vancouver region, Surrey has approximately 40% of the farmland, 70% of the rural residential land, and about 16% of the region’s population. The population, as of the 1996 census, was 304,477 residents. Surrey’s population growth rate from 1991 to 1996 was 24%, according to census estimates. Provincial statistics estimate the City’s population at 340,094 as of July 2000. The four study neighborhoods were chosen by the Parks, Recreation and Culture Department of the City of Surrey to be representative of the four typical neighborhood types found in the municipality. We classified green spaces in these study areas by various characteristics including pathways, major and minor easements, overhead lines, and schoolyard borders. They are further distinguished by size where the green space immediately adjacent to the subject property is less than half of the lot size, usually indicating a linear type of greenway space. A brief description of green space types is shown in Table 1. The characteristics of subject neighbourhoods are described below. Green Timbers is an established suburban neighbourhood of predominantly 15 year old, detached, singlefamily houses immediately south of the Guildford area of Surrey. The neighbourhood grew rapidly from the late 1970s to the late 1980s and has been almost fully developed for the past 10 years. Green Timbers is developed with suburban sized single-family lots ranging from 5000 to 8000 ft2 (464–743 m2). Residents are largely middle-income families with a broad ethnic background; most commute outside the City to work. The
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Table 1 Greenway characteristics Green space type
# of subject sites sharing border
A AE BOP BOPE1 BOPE2 BP BPS BPE1 Total
244 30 37 100 94 361 51 58 975
a
# of small parksa 59 27
Description of green space character Green Green Green Green Green Green Green Green
1 2 100 2 14 205
space, no improvements space with a small easement space with overhead lines and pathway space with overhead lines, pathway and minor easement space with overhead lines, pathway and major easement space with pathway space with pathway bordering on schoolyard. space with pathway and easements (minor)
‘‘Small’’ parks were designated when a park space bordering a site is less than 50% of the area of the site.
Table 2 Subject property: descriptive statistics
Year built Finished area Lot size Assessed total
N
Min
Max
Sum
Mean
975 975 975 975
1946 900 3552 CA$174,100
2000 7684 45,302 CA$852,000
2,387,450 8,917,761 CA$296,035,500
1985 2448 9146 CA$303,626
Source: Landcor Data Corporation, Landwealth Applied Research.
neighbourhood is serviced by four elementary schools, a junior secondary school, and a senior secondary school. There are several neighbourhood parks, mostly adjoining the school sites, and a 2-mile greenway corridor connecting the Green Timbers Urban Forest to the west with Bothwell Park and Tynehead Regional Park in the northeast. The greenway follows a utility corridor with overhead power lines and an underground gas pipeline. An asphalt-paved trail was developed in 1987 and is used by bikers, joggers and walkers. Huntington/Bridlewood Parkway is a suburban neighbourhood developed mostly with half-acre residential lots. The lots have been improved over the past 15 years with executive style homes. The neighbourhood is split in half, west to east, by Elgin Secondary School and Dogwood Park. The west side is composed of the Huntington Park and Bridlewood Park subdivisions; the east side is the Chantrell Park subdivision. Greenway trails and narrow parks (Huntington and Bridlewood) finger out through the subdivisions from Dogwood Park, connecting it to other major open spaces. Semiahmoo Trail North offers a mix of residential densities including townhouses (Crescent Gardens, Silver Pond Estates), suburban 5000 ft2 (464 m2) lots (Heritage Trails), half-acre (0.2 ha) lots (Elgin Park Country Estates) and 1–5 acre (0.4–2 ha) hobby farms. The area has been in transition from hobby farms to urban and suburban residential over the past 10–15 years. Semiahmoo Trail South is a suburban neighbourhood that includes a commercial corridor, several townhouse and apartment developments, and single-family residen-
tial subdivisions. Southmere Village, developed in the 1980s, includes a variety of detached and attached housing. Meridian by the Sea and Sherbrooke Estates are single-family developments. Greenway trails pass through both neighbourhoods, on roadways, abutting hobby farms, and in parks. We identified 975 single-family properties within these neighbourhoods as subject property, using current satellite and other photographs as well as Parks Department maps. Subject properties have a direct proximity to a greenway or green space, i.e. they share a border. We also identified and classified characteristics of the green spaces that border each subject property (Table 1). We matched subject properties by street address to Provincial assessment data acquired for this study. The assessment data includes an extensive array of variables that identify and inventory each property’s characteristics. Most subject properties were built in the 1980s. Subject properties represent a total of 2.4 million square feet (223,000 m2) of living area and 9 million square feet (836,000 m2) of lot area. The total assessed value of the subject properties, as of July 2000, was $300 million. A brief statistical description of the subject properties is shown in Table 2. Tables 3 and 4 show the distribution of subject properties by actual use and by study neighbourhood. Provincial assessment data acquired for this study includes a 22-year history of sales for each subject property. From June 1980 to April 2001 there were a total of 1792 qualified sales of subject property, representing approximately $363 million of sales
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volume. Table 5 shows descriptive statistics on subject property sales. The sales data is qualified so that the history of only those sales involving single-property, cash terms are included. Sales involving non-cash, nonarms-length, multi-property, or other terms not suitable for appraisal analysis are excluded. Most of the qualified sales involve improved subject property; i.e. land and buildings. Fifteen per cent of qualified sales involve vacant subject property; i.e. only the land has assessed value at the time of the sale. Table 6 shows the frequency of sale types included in the subject property sales data. The sales history begins in 1980, corresponding to the beginning of a 15-year period of house building on the subject property. Less than 5% of subject properties were built before 1980 and few were built after 1995.
Analytical method An obvious factor influencing the choice of analytic methods is that the value sought in this case is, in economic terms, an implicit price. An implicit price of a good or service is part of the total price paid for a complex good or service. The marketplace does not price ‘greenway bordering a single family property’
Table 3 Subject property: actual use type
Single dwelling Single dwelling with basement suite Total
Frequency
Per cent
933 42 975
95.7 4.3 100.0
Source: Landcor Data Corporation, Landwealth Applied Research.
because it only comes bundled with the other characteristics of single-family dwellings adjacent to a greenway. ‘Greenway border’ is not sold as a separate entity because it is an immobile feature of land use. Over many years economists have developed and adapted various statistical methods to study and measure implicit prices for the purposes of policy analysis. One common method is referred to as ‘hedonic pricing’ (Grilches, 1971, Hamilton and Schwann, 1995, Hamilton and Quayle, 1999). Another common method is referred to as ‘matched pairs’ (Schwartz and Kaplan, 1984; Dale-Johnson et al, 1985; Allen et al., 1995). These two methods offer different ways of controlling for nongreenway differences in the sample of property sales. By doing so, the effect of the greenway border on the value of adjacent property is isolated. With hedonic pricing, non-greenway differences in the sample of property sales are controlled for by means of statistical regression. An equation is specified that relates the observed characteristics of sampled property sales to the sale price of those properties. The observed characteristics typically include the quantity of each attribute that, a priori, determine the sale price of a property. These attributes usually include the type of property (e.g. detached, attached, apartment), location of property (e.g. neighbourhood, legal plan), time of sale, mass characteristics (e.g. lot area, building area, number of bathrooms) and momentum characteristics (e.g. age of improvements). One or more measures of the variables under study, in this case greenway border, are added to the equation, and the coefficients of the equation are estimated by regression analysis. Estimated coefficients are interpreted as measuring the implicit prices of the property sale characteristics (e.g. greenway border). The matched pairs approach to estimating the effect of greenway border on the value of single family
Table 4 Subject property: study neighbourhood
Green timbers Huntington Bridlewood Semiahmoo Trail North Semiahmoo Trail South Total
Frequency
Per cent
502 263 31 179 975
51.5 27.0 3.2 18.4 100.0
Source: Landcor Data Corporation, Landwealth Applied Research.
Table 6 Subject property sales data: sales type
Improved property transaction Vacant property transaction Total
Frequency
Per cent
1520 272 1792
84.8 15.2 100.0
Source: Landcor Data Corporation, Landwealth Applied Research.
Table 5 Subject property sales: descriptive statistics
Sale date Sale amount
N
Minimum
Maximum
Sum
Mean
1792 1792 1792
15 June 1980 $25,500
17 April 2001 $930,000
$363,607,312
22 September 1990 $202,905
Source: Landcor Data Corporation, Landwealth Applied Research.
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property controls for the non-greenway influences on value by matching each subject property with one or more otherwise comparable control properties. The full power of this method is realized when the property inventory and sales data are sufficiently detailed and numerous to allow a close match between sufficient numbers of subject and control properties. The statistical mean of the differences in sale prices for greenway and control properties is an unbiased estimator of the implicit price of greenway border. The standard deviation of the differences in sale prices is the basis for calculating both a confidence interval on the ‘mean-difference’ estimate, as well as an inference statistic (a t-ratio) used to test the null hypothesis that ‘greenway border is of no value’. Under conditions of approximate symmetry and normality, and based on the matched pairs sample employed, ‘mean-difference’ estimates of value follow the well known Student’s-t probability distribution. Confidence intervals and hypothesis tests can then be relied upon with an estimated degree of statistical confidence, typically 95%. In addition, the point estimate of value, the mean difference in sale prices, is often the only robust empirical information available for making policy decisions that depend on implicit prices. The alternative methods of hedonic pricing and matched pairs are comparable on statistical criteria and analysis effort. One estimation method is not uniformly superior to the other, although they do have different statistical properties. Hedonic price estimates tend to be more statistically reliable (narrower confidence intervals). Matched pairs estimates tend to be less biased (truer point estimates). However, if properly applied, either method will generate reasonably reliable and unbiased estimates of implicit prices. The assessment data acquired for this study is sufficiently detailed and numerous for either matched pairs or hedonic pricing analysis. As described above, the study data include inventory and sale records for the subject property. In addition, the available data include inventory and sale records for all other property of similar use in the study neighbourhoods. Moreover, the data include inventory and sale records for all other
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properties of similar use in the six neighbourhoods defined by the Provincial Assessment Authority that together encompass the four study neighbourhoods. There are thus a significant number of property sale records from which to select matched pairs of subject and control property sales. Table 7 shows descriptive statistics on the subject and non-subject property sales employed in the matched pairs analysis. From June 1980 to April 2001, nonsubject property sales represented approximately $6.4 billion of sales volume. The 1792 subject property sales can be compared to 32,595 non-subject property sales to obtain the required matched pairs sample. The paired sample is selected by comparing each subject property sale to every non-subject property sale. The comparison is made on the basis of the assessment inventory characteristics that describe the property sales and are included in the study data. Property sale characteristics used for the matched pair comparison are listed in Table 8. The criteria applied for selecting matched pairs were extensive in order to isolate, as far as possible, the influence of a greenway border on subject property value. For example, sales had to match exactly, or within narrow tolerances, on all the characteristics listed in Table 8. The exceptions to this rule were several characteristics used as substitutes: (1) legal plan or assessment neighbourhood, and (2) manual class type or number of stories. For substitute characteristics, the sales had to match only one (e.g. same legal plan or same assessment neighbourhood). However, the tolerance level for selecting matched pairs on several characteristics depended upon which substitute characteristic was matched. For example, a matched pair is within 90 days on the date of sale, unless the pair has different plan numbers, in which case the pair is in the same assessment neighbourhood and matches within 60 days on the date of sale. The search algorithm made four passes through the data before a large enough sample of matched pairs was obtained. Each pass through the data compared each subject property sale not yet matched with every nonsubject property sale. Each pass involved a slightly less
Table 7 Property sales used in study: descriptive statistics
Non-subject property
Subject property
N
Minimum
Maximum
Sum
Mean
Sale Sale
32,595 32,595 32,595
15 June 1980 $11,100
23 April 2001 $3,300,000
$6,426,471,234
23 December 1991 $197161
Sale Sale
1792 1792 1792
15 June 1980 $25,500
17 April 2001 $930,000
$363,607,312
22 September 1990 $202,905
Source: Landcor Data Corporation, Landwealth Applied Research.
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restrictive combination of tolerance levels and substitute characteristics as the criteria for selecting matched pairs. The criteria specified on each pass are shown in Table 9. The end result was a sample of 755 matched pairs of subject and control property sales. A brief description of the matched pair sample obtained is shown in Table 10.
Table 8 Match variables Sale date Sale type Actual use type Manual class type Manual class deviation Legal plan number Finished area Lot size Foundation type Number of garage stalls Number of carport stalls Pool on site Other buildings on site Corner lot Water on lot Waterfront lot Quality of view from site Effective age of improvements Number of bathroom pieces Assessment neighbourhood Number of stories
Results Estimates of the increase (decrease) in property value from adding the existing greenway border are made over the whole study scope and for different neighbourhoods, greenway types, eras and property types. The results of these estimates are shown in Table 11 and summarized below. Table 11 shows the estimated impact in dollars (Canadian) and percentage of average sale price, the dollar range for the 95% confidence interval, the t-ratio for the point estimate, and the degrees of freedom and statistical significance (2-Tail). A t-ratio of 2 is, in general, significantly different from zero at the 95% confidence level.
Table 9 Matched pairs sample selection process Match variable
Plus or minus tolerance STAGE 1
STAGE 2
STAGE 3
STAGE 4
Sale date Sale type Actual use type Manual class type Manual class deviation Legal plan number Assessment neighbourhood Finished area Lot size Foundation type Number of garage stalls Pool on site Other buildings Corner lot Water on lot Waterfront lot Prime view Good view Fair view Number of carport stalls Effective age of improvements
90 days Equal Equal Equal 15% Equal n.a.
60 days 60 days 60 days 60 days 60 days n.a. Equal
60 days 60 days 60 days n.a. n.a. Equal n.a.
60 days 60 days 60 days n.a. n.a. n.a. Equal
150 ft2 500 ft2 Equal Equal
120 ft2 500 ft2 500 ft2 500 ft2
100 ft2 400 ft2 400 ft2 400 ft2
100 ft2 400 ft2 400 ft2 400 ft2
Equal Equal Equal Equal Equal Equal Equal Equal Equal
500 ft2 500 ft2 500 ft2 500 ft2 500 ft2 500 ft2 500 ft2 500 ft2 ’’
400 ft2 400 ft2 400 ft2 400 ft2 400 ft2 400 ft2 400 ft2 400 ft2 ’’
400 ft2 400 ft2 400 ft2 400 ft2 400 ft2 400 ft2 400 ft2 400 ft2 ’’
1 year if less than 5 yrs old; 33% of comparable’s age if older
’’
’’
’’
Number of bathroom pieces
2 bathroom pieces
’’ ’’
’’ ’’
’’ ’’
Notes: n.a., not applied.
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Table 10 Matched pairs sample: descriptive statistics N
Minimum
Maximum
Mean
Std. deviation
Subject sales: Single-family property bordering a greenway in the study neighbourhoods Sale date: subject 755 07/15/1980 02/26/2001 Sale amount: subject 755 $25,500 $575,000 Lot size sqft: subject 755 3552 16,553 Finished sqft: subject 755 1145 3812 Effective age: subject 755 0 22 Assessed total: subject 755 $184,800 $537,000
02/10/1989 $147,741 6932.89 2058.75 2.40 $244,689
$83,321 1414.81 427.19 4.05 $52,008
Control sales: Single-family property not bordering a greenway in the study neighbourhoods Sale date: control 755 07/15/1980 04/20/2001 Sale amount: control 755 $32,000 $613,000 Lot size sqft: control 755 3553 16,553 Finished sqft: control 755 1195 3960 Effective age: control 755 0 23 Assessed total: control 755 $185,300 $565,000
02/09/1989 $143,649.30 6920.36 2057.05 2.40 $243,496
$80,807 1406.70 427.50 4.24 $51,183
Table 11 The effects of greenway border on single family property value Estimated value of greenway border
95% confidence interval on estimated value of greenway border
Hypothesis test: ‘‘no change in value’’.
$
%
Lower
Upper
t-Ratio
Degrees of freedom (N—1)
Significance (2-tail)
$4092
2.8
$2207
$5977
4.261
754
0.000
$11,356 $1051 $20,618
6.9 0.8 8.4
$3639 $420 $5684
$19,072 $2522 $47,099
2.914 1.403 1.595
117 620 28
0.004 0.161 0.122
$17,515
10.2
$10,400
$24,630
4.882
104
0.000
$2524 $13,148 $670 $1359 $544 $18,307 $2344 $16,750
1.7 9.4 0.5 0.9 0.5 11.0 1.6 6.5
$1.51 $21,749 $6629 $1235 $1877 $10,375 $4275 $13,965
$5,050 $4546 $5289 $3954 $2965 $26240 $8962 $47465
1.973 3.211 .225 1.036 0.443 4.566 0.723 1.178
163 18 60 139 196 128 30 13
0.050 0.005 0.823 0.302 0.658 0.000 0.475 0.260
1980 THRU 1986 1987 THRU 1993 1994 THRU 2001
$3462 $3716 $6621
3.5 2.8 2.6
$1572 $1069 $663
$5352 $6,362 $12,578
3.615 2.759 2.202
184 455 113
0.000 0.006 0.030
Improve D Vacant
$6038 $1862
3.5 3.0
$3749 $4813
$8328 $1,090
5.180 1.244
568 185
0.000 0.215
All study neighbourhoods Small park size Green Timbers Huntington/ Bridlewood Parkway Semiahmoo Trail South Type Type Type Type Type Type Type Type
A AE BOP BOPE1 BOPE2 BP BPS BPE1
The first estimate in Table 11 is of the change in value for an average single-family property from adding the existing greenway border. We estimate that adding the existing greenway border increases property value by $4092 or 2.8%. The t-statistic for the test of the hypothesis of no change in value is 4.3 and this effect is highly significant at the 99.9% confidence level. The estimate is considered accurate within the range of $2207 to $5977 with 95% confidence. These results are
based on the full sample of 755 matched pairs of qualified property sales. Our analysis of the study neighbourhoods during the era from 1980 to 2001, supported by relevant data and based upon an analysis of the factors influencing value, strongly supports the inference that a green space border increases the value of single-family property. Green spaces were designated as small parks when their area is less that half the area of the adjacent lot,
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though they often are corridors and connect to a larger park space. The small park designation is given in addition to the other type categories, as indicated in Table 1. In some cases, nearly all the bordering properties are along ‘small’ parks, as in the case of undeveloped parks with small easements (Type AE; 27 of 30). Only the designation BOP, overhead lines and pathways, has no incidents of the green space being narrow relative to the lot depth, as one might expect with a utility right of way. We estimate that a small park border (of any type) increases property value by $11,356 (6.9%). This estimate is significantly different from the hypothesis of no change in value at the 99.6% confidence level (t-statistic of 2.9). The estimate is considered accurate within the range of $3639–$19,072 with 95% confidence. A small park type of green space appears to be more valuable to single-family property than a typical type of green space. Almost half of the ‘small’ parks were of the type BP, a park with a pathway, indicating that a simple greenway corridor border is of particular value. The next three estimates in Table 11 are of the change in value for a typical single-family property in each study neighbourhood separately. The small number of subject properties in Semiahmoo Trail North (n ¼ 31) precludes us from efficiently applying the matched pairs estimator in this study neighbourhood separately. It is still included in the study since it was used in the aggregate, but in hindsight its small sample size of matched sales properties should have excluded it from the study. In Green Timbers, we estimate that the green space border increases property value by $1051 (0.8%), and the estimate is considered accurate within the range of -$420 to $2522 with 95% confidence. In Semiahmoo Trail South, the increase was estimated at $17,515 (10.2%) and the 95% confidence interval for the estimate is from $10,400 to $24,630. In Huntington/ Bridlewood Parkway increases in property value are estimated to be $20,618 (8.4%) with the 95% confidence interval from -$5684 to $47,099. In this neighbourhood, the small and relatively heterogeneous sample of singlefamily properties bordering a greenway precludes making a more accurate matched pairs estimate. The values of a greenway bordering single-family property in the neighbourhoods of Semiahmoo Trail South and Huntington/Bridlewood Parkway are significantly higher than in Green Timbers. The Green Timbers area is the oldest of the greenways. It featured overhead power lines that curtailed the presence of larger mature vegetation, while other neighbourhoods have underground utilities. Further the Green Timbers greenway is straight, while the greenways in other neighbourhoods are more curved and attractive. These are the likely reasons that the results for Green Timbers were more modest than other areas.
The next eight estimates in Table 11 are of the value from bordering on different types of green space. We estimate that Type A, an open green space with no pathways, increases property value by $2524 (1.7%). Type AE, an open green space with small easements, decreases property value by $13,148 (9.4%). As noted above, this comprised only 30 subject properties and 27 of these were ‘small’ (less than half the size of the lot). On-site inspection of a greenway of this type revealed an overgrown corridor bordering nine properties. Deferred maintenance (perhaps to discourage its use as a shortcut to a nearby school) is more likely the reason for this effect than the easements. We find no significant change in the value of singlefamily property from adding a border on a park or greenway containing both overhead lines and a pathway (type BOP), a park or greenway containing both overhead lines, a pathway and minor or major easements (types BOPE1 and BOPE2), or a park with a pathway bordering on a schoolyard (type BPS). We estimate that adding the existing border on a park with a pathway (type BP) increases property value by $18,307 (11%). The t-statistic for the test of the hypothesis of no change in value is 4.6 and this effect is highly significant at the 99.9% confidence level. The estimate is considered accurate within the range of $10,375–$26,240 with 95% confidence. A park or greenway with a pathway and minor easements (type BPE1) increases property value by $16,750 (6.5%). The t-statistic for the test of the hypothesis of no change in value is only 1.2 and this effect is of little statistical significance at the 74% confidence level. The 95% confidence interval for the estimate is from $13,965 to $47,465. The small and relatively heterogeneous sample of single-family properties bordering on greenway type BPE1 precludes us from making a more accurate matched pairs estimate. Finally, the value of a green space border has increased over time, but not as quickly as the price of a single-family home (i.e. the dollar value has risen but the percentage value has decreased.) In the early 1980s the average value of a greenway border was $3462, or 3.5%. In the late 1980s to early 1990s, it was $3716 or 2.8%, and in the late 1990s it was $6621, or 2.6%. The overall value of housing in this market has increased which has lead to the decrease in percentage value of green space over time. The early 1990s saw a steep rise in the housing prices in the Fraser Valley, which outstripped the relative increase in value of specific location related amenities.
Conclusions and policy implications Our study clearly supports the inference that a green space border increases the value of single-family
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property in the study neighbourhoods during the era from 1980 to 2001. For the four study neighbourhoods in aggregate, a narrow or ‘small’ type of green space appears to be even more valuable to single-family property than a typical park. Since close to half of the ‘small’ park abutments were with pathways, this lends some empirical strength to the argument that greenways, like parks, help boost property values and perhaps more so than larger parks. This is important for municipalities looking at the financial and political feasibility of creating such corridors. Our analysis indicates a greenway border increases the value of single-family property in at least three of the four study neighbourhoods. One neighbourhood was not analysed independently due to insufficient sample size (Semiahmoo Trail North). The estimated values of a greenway border on single-family property are significantly higher in Semiahmoo Trail South and Huntington/Bridlewood Parkway than in Green Timbers. For the four study neighbourhoods in aggregate, we find a significant increase in the value of single-family property from a border on a natural park (type A) and on a park with a pathway (type BP). We find a significant decrease in value from a border on a park with a small easement (type AE). Other types of greenway borders exhibited either no significant effect on the value of adjacent single-family property, or our sample size was too small to yield value estimates with the matched pairs method. The long time frame studied (over 20 years) is another unique aspect of this investigation. It is useful to note that the value of bordering on green space endured over this time period. This is particularly striking in the largely suburban/rural landscape of the study area. The results of this study add to the body of evidence that parks and green spaces are a good investment. Adjacent homeowners capitalized the value of green space, as possibly do others in close proximity, though that analysis was beyond the scope of this study. Pathways or greenways appear to be particularly valuable. Relatively narrow strips of land can provide mobility for humans and wildlife, and potentially create buffers for sensitive ecosystems and provide other ecological services. It appears they might also help pay for themselves through increased tax revenue. In this study, narrow strips of green space categorized as small parks, are estimated to add $11,356 to the value of adjacent properties. Based on the lower bound of the confidence interval, $3639, the property tax revenue from this added value, for the 205 properties identified, would yield at least $7459.95 per year for the City of Surrey (assuming a 1% tax rate). The associated cost of establishing a greenway border were negligible to the City. Not only do greenways often share utility right-ofways that would not necessarily be developed as additional housing anyway, but developers are required
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by the local government act to make a 5–15% park dedication when creating a new subdivision. The City opted to direct this towards corridors rather than large park areas. Maintenance costs are similar between the two park types. The implicit value to residents and homeowners of green connections appears high. Other social welfare values are captured through parks development beyond property value. In 2002, the City of Surrey received an international award for promoting physical activity from the Pan American Health Organization and Centre for Disease Control. The Prize recognized Surrey as an outstanding City in the United States and Canada for improving public spaces for recreation and promoting physical activity. The Greenway program was an important aspect of their submission for this award contributing to their efforts to develop public space to provide a venue for physical activity. In addition, there is a public campaign to get people moving and enjoying their civic facilities. Special rates have been implemented for corporate clients and families to promote use of recreational facilities. Greenways specifically encourage biking and walking and so create active space for nearby residents as well as improving their home values.
Acknowledgements The authors wish to thank the City of Surrey, Department of Parks Recreation and Culture for commissioning the study on which this article is based. The following are individuals and organization for the assistance and support: Rick Bentley, AACI, Bentley Appraisals Ltd.; Nadia Carvalho, MA. Planning Consultant; Jeff Puhl and Rudy Nielsen, Landcor Data Corporation.
References Allen, M.T., Springer, T.M., Waller, N.G., 1995. Implicit pricing across residential rental submarkets. Journal of Real Estate Finance and Economics 11, 137–151. Barrette, M., 2001. Parks and the city. Planning 67 (8), 4–9. Bolitzer, B., Netusil, N.R., 2000. The impact of open spaces on property values in Portland, Oregon. Journal of Environmental Management 59, 185–193. Cheshire, P.C., Sheppard, S., 1995. On the price of land and the value of amenities. Economica 62, 247–267. Correll, M.R., Lillydahl, J.H., Singell, L.D., 1978. The effects of greenbelts on residential property values: some findings on the political economy of open space. Land Economics 54 (2), 207–217. Crompton, J.L., 2000. The impact of parks and open space on property values and the property tax base. National Recreation and Park Association, Ashburn, VA. Dale-Johnson, D., Findlay, M.C., Schwartz, A.L., Kapplin, S.D., 1985. Valuation and efficiency in the market for creatively financed houses. Journal of American Real Estate and Urban Economics 13 (4), 388–403.
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Grilches, Z., 1971. Price Indexes and Quality Changes: Studies in New Methods of Measurement. Harvard University Press, Cambridge. Grudnitski, G., Do, A.Q., 1997. Adjusting the value of houses located on a golf course. Appraisal Journal 65 (3), 261–267. Hamilton, S.W., Schwann, G.M., 1995. Do high voltage electric transmission lines affect property value? Land Economics 71 (4), 436–444. Hamilton, S., Quayle, M., 1999. Corridors of green and gold: impact of riparian suburban greenways on property values. Department of Fisheries and Oceans, Pacific Region, Habitat Enhancement Branch, Canada. Heacock, C., 1997. Creativity is vital in efforts to preserve open space. American City & County 112 (4), 60–61. Irwin, E.G., 2002. The effects of open space on residential property values. Land Economics 78 (4), 465–481. Irwin, E.G., Bockstael, N.E., 2001. The problem of identifying land use spillovers: measuring the effects of open space on residential property values. American Journal of Agricultural Economics 83 (3), 698–704. Kelly, M.C.H., Zieper, M., 2000. Financing for the future: the economic benefits of parks and open space. Government Finance Review 16 (6), 23–26.
Lerner, S., Poole, W., 1999. The economic benefits of parks and open space—how land conservation helps communities grow smart and protect the bottom Line. Trust for Public Land, San Francisco. Lutzenhiser, M., Netusil, N., 2001. The effect of open spaces on a home’s sale price. Contemporary Economic Policy 19 (3), 291–298. Mahan, B.L., Polasky, S., Adams, R.M., 2000. Valuing urban wetlands: a property price approach. Land Economics 76 (1), 100–113. National Park Service, Rivers, Trails and Conservation Assistance Program, 1995. Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors, 4th Edition. National Parks Service, Washington, DC. Platt, K., 2000. Going green. Planning 66 (8), 18–21. Schwartz, A.L., Kaplan, S.D., 1984. Economic implications of alternative home financing. Housing Finance Review 3 (2), 165–175. Smallwood, C., 1993. It’s not easy being green. American City & County 108 (11), PR2–8. Weicher, J., Zerbst, R., 1973. The externalities of neighborhood parks: an empirical investigation. Land Economics 49 (1), 99–105.
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Green space borders—a tangible benefit? Evidence from four neighbourhoods in Surrey, British Columbia, 1980–2001 David W. Hobdena, Gary E. Laughtonb, Katherine E. Morganc,* b
a Landwealth Applied Research, 1702–9500 Erickson Drive, Burnaby, BC, Canada V3J 1M8 Colliers International Realty Advisors Inc., 17th floor, 200 Granville Square, 200 Granville Street, Vancouver BC, Canada V6C 2R6 c O’Brien and Company, Inc., P.O. Box 10705, Bainbridge Island, WA, 98110 USA
Received 21 December 2001; received in revised form 10 October 2003; accepted 15 October 2003
Abstract A generally positive impact of parks and open spaces on nearby property values has been documented in several previous studies. This study bolsters those findings and extends the scope of empirical evidence. The statistical analysis employs mean-difference ttests on matched pairs of sales over 20 years and the location is suburban Canada. In addition, a detailed typology of green spaces, emphasizing greenway corridors, is defined. Findings support the notion that most types of green space increase the value of adjacent, single-family property and that corridors in particular have a significant positive impact on adjacent property values. However, there are exceptions with negative impacts on value and the overall range of values is less than reported elsewhere. r 2003 Elsevier Ltd. All rights reserved. Keywords: Green spaces; Parks; Open spaces; Greenways; Property values
Introduction Suburban growth has been a concern throughout North America over the last few decades. Part of this concern stems from a paradox: people desire to live in ‘the country,’ surrounded by more open, green and natural spaces (Smallwood, 1993) (this is one of the drivers of geographic growth or sprawl) but suburban development itself threatens these open spaces (Heacock, 1997; Kelly and Zieper, 2000). Along with the loss of open space, a popular trend in parks and recreational land use are greenways, a connecting corridor of green space, usually featuring a pathway for hiking, biking and other ‘linear’ recreational activities (Platt, 2000). Green space provides aesthetic, recreational, social, and environmental benefits to surrounding communities. Suburban municipalities are faced with challenges in deciding where to protect or create green space, what type it should be, and how to do it economically, politically and environmentally. The environmental benefits of habitat provision as well as air and water *Corresponding author. Tel.: +1-206-842-8995; fax: +1-206-8428717. E-mail address: [email protected] (K.E. Morgan). 0264-8377/$ - see front matter r 2003 Elsevier Ltd. All rights reserved. doi:10.1016/j.landusepol.2003.10.002
management require an entirely different assessment process and are well beyond the scope of this study. However, understanding the direct economic impacts on neighbouring properties can help with the economic and political decision-making. Other economic benefits are widely assumed, such as attraction of businesses, direct recreational and tourism spending, etc. (Kelly and Zieper, 2000; Barrette, 2001), but these assumptions are also beyond the scope of this study. In this study, we focus on measurable differences in property values between single-family lots that border green space and comparable properties that do not. Understanding the impact of green spaces on property value can help municipal planners estimate the additional property tax revenue they can expect from leaving areas undeveloped, which can offset the cost of acquisition. It can also be used to estimate the trade-off between open space uses and development density. Recent analysis has found that it is cheaper to create parks than to allow residential development (Crompton, 2000). The cost of servicing new development is higher than the tax revenue from that development, adding a further burden to existing taxpayers. An ability to point to empirical evidence of property value increases may also help win citizen support for new greenways and park space. The City of
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Surrey, in British Columbia, Canada is the subject study area, and provides a good example of the development trends discussed above. Below is a review of recent literature on green spaces and property values and how this study complements other studies. The subsequent sections describe the study area, data, analysis method, results, and conclusions. Two of the most recent studies on the impact of green spaces on property value were done in Portland, Oregon. The first, reported in two different articles (Bolitzer and Netusil, 2000; Lutzenhiser and Netusil, 2001) used hedonic pricing to estimate the property value affect within 1500 ft (457 m) of four general types of open space—public parks, private parks, cemeteries, and golf courses. Mahan et al. (2000) also focused on Portland, but looked at wetlands rather than parks. Several reports summarize a variety of literature including some from different unpublished sources (graduate theses, government and consultant studies, etc.) and give a good overview of property value studies. These reports include other assessment approaches, such as willingness to pay and opinion surveys, as well as other aspects of economic value (Crompton, 2000; Lerner and Poole, 1999; National Park Service and Rivers, 1995). Grudnitski and Do (1997) looked specifically at golf courses in Rancho Bernardo, CA. Earlier studies include Correll et al’s (1978) examination of greenbelts in Boulder, CO and Weicher and Zerbst’s (1973) investigation of parks in Columbus, OH. Open space more generally, as undeveloped land, has been examined for its influence on land value. Irwin (2002) and Irwin and Bockstael (2001) found that the premium value was in the lack of likelihood that development would take place, rather than in the specific type of open space, when they looked at residential property values near undeveloped land in Maryland. Specifically, preserved land had a larger spill-over effect than land that might be developed, regardless of whether land was agricultural or forested land. Similarly, Cheshire and Sheppard (1995) found that there was a positive impact on residential values only when there was a sufficient scarcity of open space in the town as a whole. They examined the effects of both private and publicly held undeveloped lands in two towns in England. In his 18th century proposal for Central Park in New York City, Frederick Law Olmsted put forth the idea that parks improved property values and the corollary notion that this more than justified the costs of their creation. It has taken over a 100 years for statistical methods and computer tools to assemble a substantial body of work to support this empirically. However, on intuition alone, few would argue with the assertion that Central Park has more than paid for itself with the subsequent property tax of its bordering properties. For the most part, these studies used a hedonic price method, were based in urban areas of the US, and used data from time
periods of less than 5 years. They found that park and open space proximity generally added to property value except where there were negative externalities such as traffic to a recreation facility, poor maintenance, or the presence of criminal or other ‘undesirable’ populations in the park. Crompton (2000) found few empirical studies of greenways specifically, though several studies exist that used other assessment tools. This study bolsters previous findings and extends the scope of empirical evidence in several ways. The time period covers 20 years of sales data, the location is suburban Canada, a detailed typology of green spaces is defined which emphasizes greenway corridors, and the statistical analysis employs mean-difference t-tests on matched pairs of sales.
Study area and data The City of Surrey is British Columbia’s second largest municipality in both population and area. Surrey is located approximately 25 km southeast of Vancouver and about 200 km north of Seattle, WA. It lies between the Fraser River on the north and the 49th Parallel (the US–Canada Border) on the south. Within the greater Vancouver region, Surrey has approximately 40% of the farmland, 70% of the rural residential land, and about 16% of the region’s population. The population, as of the 1996 census, was 304,477 residents. Surrey’s population growth rate from 1991 to 1996 was 24%, according to census estimates. Provincial statistics estimate the City’s population at 340,094 as of July 2000. The four study neighborhoods were chosen by the Parks, Recreation and Culture Department of the City of Surrey to be representative of the four typical neighborhood types found in the municipality. We classified green spaces in these study areas by various characteristics including pathways, major and minor easements, overhead lines, and schoolyard borders. They are further distinguished by size where the green space immediately adjacent to the subject property is less than half of the lot size, usually indicating a linear type of greenway space. A brief description of green space types is shown in Table 1. The characteristics of subject neighbourhoods are described below. Green Timbers is an established suburban neighbourhood of predominantly 15 year old, detached, singlefamily houses immediately south of the Guildford area of Surrey. The neighbourhood grew rapidly from the late 1970s to the late 1980s and has been almost fully developed for the past 10 years. Green Timbers is developed with suburban sized single-family lots ranging from 5000 to 8000 ft2 (464–743 m2). Residents are largely middle-income families with a broad ethnic background; most commute outside the City to work. The
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Table 1 Greenway characteristics Green space type
# of subject sites sharing border
A AE BOP BOPE1 BOPE2 BP BPS BPE1 Total
244 30 37 100 94 361 51 58 975
a
# of small parksa 59 27
Description of green space character Green Green Green Green Green Green Green Green
1 2 100 2 14 205
space, no improvements space with a small easement space with overhead lines and pathway space with overhead lines, pathway and minor easement space with overhead lines, pathway and major easement space with pathway space with pathway bordering on schoolyard. space with pathway and easements (minor)
‘‘Small’’ parks were designated when a park space bordering a site is less than 50% of the area of the site.
Table 2 Subject property: descriptive statistics
Year built Finished area Lot size Assessed total
N
Min
Max
Sum
Mean
975 975 975 975
1946 900 3552 CA$174,100
2000 7684 45,302 CA$852,000
2,387,450 8,917,761 CA$296,035,500
1985 2448 9146 CA$303,626
Source: Landcor Data Corporation, Landwealth Applied Research.
neighbourhood is serviced by four elementary schools, a junior secondary school, and a senior secondary school. There are several neighbourhood parks, mostly adjoining the school sites, and a 2-mile greenway corridor connecting the Green Timbers Urban Forest to the west with Bothwell Park and Tynehead Regional Park in the northeast. The greenway follows a utility corridor with overhead power lines and an underground gas pipeline. An asphalt-paved trail was developed in 1987 and is used by bikers, joggers and walkers. Huntington/Bridlewood Parkway is a suburban neighbourhood developed mostly with half-acre residential lots. The lots have been improved over the past 15 years with executive style homes. The neighbourhood is split in half, west to east, by Elgin Secondary School and Dogwood Park. The west side is composed of the Huntington Park and Bridlewood Park subdivisions; the east side is the Chantrell Park subdivision. Greenway trails and narrow parks (Huntington and Bridlewood) finger out through the subdivisions from Dogwood Park, connecting it to other major open spaces. Semiahmoo Trail North offers a mix of residential densities including townhouses (Crescent Gardens, Silver Pond Estates), suburban 5000 ft2 (464 m2) lots (Heritage Trails), half-acre (0.2 ha) lots (Elgin Park Country Estates) and 1–5 acre (0.4–2 ha) hobby farms. The area has been in transition from hobby farms to urban and suburban residential over the past 10–15 years. Semiahmoo Trail South is a suburban neighbourhood that includes a commercial corridor, several townhouse and apartment developments, and single-family residen-
tial subdivisions. Southmere Village, developed in the 1980s, includes a variety of detached and attached housing. Meridian by the Sea and Sherbrooke Estates are single-family developments. Greenway trails pass through both neighbourhoods, on roadways, abutting hobby farms, and in parks. We identified 975 single-family properties within these neighbourhoods as subject property, using current satellite and other photographs as well as Parks Department maps. Subject properties have a direct proximity to a greenway or green space, i.e. they share a border. We also identified and classified characteristics of the green spaces that border each subject property (Table 1). We matched subject properties by street address to Provincial assessment data acquired for this study. The assessment data includes an extensive array of variables that identify and inventory each property’s characteristics. Most subject properties were built in the 1980s. Subject properties represent a total of 2.4 million square feet (223,000 m2) of living area and 9 million square feet (836,000 m2) of lot area. The total assessed value of the subject properties, as of July 2000, was $300 million. A brief statistical description of the subject properties is shown in Table 2. Tables 3 and 4 show the distribution of subject properties by actual use and by study neighbourhood. Provincial assessment data acquired for this study includes a 22-year history of sales for each subject property. From June 1980 to April 2001 there were a total of 1792 qualified sales of subject property, representing approximately $363 million of sales
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volume. Table 5 shows descriptive statistics on subject property sales. The sales data is qualified so that the history of only those sales involving single-property, cash terms are included. Sales involving non-cash, nonarms-length, multi-property, or other terms not suitable for appraisal analysis are excluded. Most of the qualified sales involve improved subject property; i.e. land and buildings. Fifteen per cent of qualified sales involve vacant subject property; i.e. only the land has assessed value at the time of the sale. Table 6 shows the frequency of sale types included in the subject property sales data. The sales history begins in 1980, corresponding to the beginning of a 15-year period of house building on the subject property. Less than 5% of subject properties were built before 1980 and few were built after 1995.
Analytical method An obvious factor influencing the choice of analytic methods is that the value sought in this case is, in economic terms, an implicit price. An implicit price of a good or service is part of the total price paid for a complex good or service. The marketplace does not price ‘greenway bordering a single family property’
Table 3 Subject property: actual use type
Single dwelling Single dwelling with basement suite Total
Frequency
Per cent
933 42 975
95.7 4.3 100.0
Source: Landcor Data Corporation, Landwealth Applied Research.
because it only comes bundled with the other characteristics of single-family dwellings adjacent to a greenway. ‘Greenway border’ is not sold as a separate entity because it is an immobile feature of land use. Over many years economists have developed and adapted various statistical methods to study and measure implicit prices for the purposes of policy analysis. One common method is referred to as ‘hedonic pricing’ (Grilches, 1971, Hamilton and Schwann, 1995, Hamilton and Quayle, 1999). Another common method is referred to as ‘matched pairs’ (Schwartz and Kaplan, 1984; Dale-Johnson et al, 1985; Allen et al., 1995). These two methods offer different ways of controlling for nongreenway differences in the sample of property sales. By doing so, the effect of the greenway border on the value of adjacent property is isolated. With hedonic pricing, non-greenway differences in the sample of property sales are controlled for by means of statistical regression. An equation is specified that relates the observed characteristics of sampled property sales to the sale price of those properties. The observed characteristics typically include the quantity of each attribute that, a priori, determine the sale price of a property. These attributes usually include the type of property (e.g. detached, attached, apartment), location of property (e.g. neighbourhood, legal plan), time of sale, mass characteristics (e.g. lot area, building area, number of bathrooms) and momentum characteristics (e.g. age of improvements). One or more measures of the variables under study, in this case greenway border, are added to the equation, and the coefficients of the equation are estimated by regression analysis. Estimated coefficients are interpreted as measuring the implicit prices of the property sale characteristics (e.g. greenway border). The matched pairs approach to estimating the effect of greenway border on the value of single family
Table 4 Subject property: study neighbourhood
Green timbers Huntington Bridlewood Semiahmoo Trail North Semiahmoo Trail South Total
Frequency
Per cent
502 263 31 179 975
51.5 27.0 3.2 18.4 100.0
Source: Landcor Data Corporation, Landwealth Applied Research.
Table 6 Subject property sales data: sales type
Improved property transaction Vacant property transaction Total
Frequency
Per cent
1520 272 1792
84.8 15.2 100.0
Source: Landcor Data Corporation, Landwealth Applied Research.
Table 5 Subject property sales: descriptive statistics
Sale date Sale amount
N
Minimum
Maximum
Sum
Mean
1792 1792 1792
15 June 1980 $25,500
17 April 2001 $930,000
$363,607,312
22 September 1990 $202,905
Source: Landcor Data Corporation, Landwealth Applied Research.
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property controls for the non-greenway influences on value by matching each subject property with one or more otherwise comparable control properties. The full power of this method is realized when the property inventory and sales data are sufficiently detailed and numerous to allow a close match between sufficient numbers of subject and control properties. The statistical mean of the differences in sale prices for greenway and control properties is an unbiased estimator of the implicit price of greenway border. The standard deviation of the differences in sale prices is the basis for calculating both a confidence interval on the ‘mean-difference’ estimate, as well as an inference statistic (a t-ratio) used to test the null hypothesis that ‘greenway border is of no value’. Under conditions of approximate symmetry and normality, and based on the matched pairs sample employed, ‘mean-difference’ estimates of value follow the well known Student’s-t probability distribution. Confidence intervals and hypothesis tests can then be relied upon with an estimated degree of statistical confidence, typically 95%. In addition, the point estimate of value, the mean difference in sale prices, is often the only robust empirical information available for making policy decisions that depend on implicit prices. The alternative methods of hedonic pricing and matched pairs are comparable on statistical criteria and analysis effort. One estimation method is not uniformly superior to the other, although they do have different statistical properties. Hedonic price estimates tend to be more statistically reliable (narrower confidence intervals). Matched pairs estimates tend to be less biased (truer point estimates). However, if properly applied, either method will generate reasonably reliable and unbiased estimates of implicit prices. The assessment data acquired for this study is sufficiently detailed and numerous for either matched pairs or hedonic pricing analysis. As described above, the study data include inventory and sale records for the subject property. In addition, the available data include inventory and sale records for all other property of similar use in the study neighbourhoods. Moreover, the data include inventory and sale records for all other
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properties of similar use in the six neighbourhoods defined by the Provincial Assessment Authority that together encompass the four study neighbourhoods. There are thus a significant number of property sale records from which to select matched pairs of subject and control property sales. Table 7 shows descriptive statistics on the subject and non-subject property sales employed in the matched pairs analysis. From June 1980 to April 2001, nonsubject property sales represented approximately $6.4 billion of sales volume. The 1792 subject property sales can be compared to 32,595 non-subject property sales to obtain the required matched pairs sample. The paired sample is selected by comparing each subject property sale to every non-subject property sale. The comparison is made on the basis of the assessment inventory characteristics that describe the property sales and are included in the study data. Property sale characteristics used for the matched pair comparison are listed in Table 8. The criteria applied for selecting matched pairs were extensive in order to isolate, as far as possible, the influence of a greenway border on subject property value. For example, sales had to match exactly, or within narrow tolerances, on all the characteristics listed in Table 8. The exceptions to this rule were several characteristics used as substitutes: (1) legal plan or assessment neighbourhood, and (2) manual class type or number of stories. For substitute characteristics, the sales had to match only one (e.g. same legal plan or same assessment neighbourhood). However, the tolerance level for selecting matched pairs on several characteristics depended upon which substitute characteristic was matched. For example, a matched pair is within 90 days on the date of sale, unless the pair has different plan numbers, in which case the pair is in the same assessment neighbourhood and matches within 60 days on the date of sale. The search algorithm made four passes through the data before a large enough sample of matched pairs was obtained. Each pass through the data compared each subject property sale not yet matched with every nonsubject property sale. Each pass involved a slightly less
Table 7 Property sales used in study: descriptive statistics
Non-subject property
Subject property
N
Minimum
Maximum
Sum
Mean
Sale Sale
32,595 32,595 32,595
15 June 1980 $11,100
23 April 2001 $3,300,000
$6,426,471,234
23 December 1991 $197161
Sale Sale
1792 1792 1792
15 June 1980 $25,500
17 April 2001 $930,000
$363,607,312
22 September 1990 $202,905
Source: Landcor Data Corporation, Landwealth Applied Research.
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restrictive combination of tolerance levels and substitute characteristics as the criteria for selecting matched pairs. The criteria specified on each pass are shown in Table 9. The end result was a sample of 755 matched pairs of subject and control property sales. A brief description of the matched pair sample obtained is shown in Table 10.
Table 8 Match variables Sale date Sale type Actual use type Manual class type Manual class deviation Legal plan number Finished area Lot size Foundation type Number of garage stalls Number of carport stalls Pool on site Other buildings on site Corner lot Water on lot Waterfront lot Quality of view from site Effective age of improvements Number of bathroom pieces Assessment neighbourhood Number of stories
Results Estimates of the increase (decrease) in property value from adding the existing greenway border are made over the whole study scope and for different neighbourhoods, greenway types, eras and property types. The results of these estimates are shown in Table 11 and summarized below. Table 11 shows the estimated impact in dollars (Canadian) and percentage of average sale price, the dollar range for the 95% confidence interval, the t-ratio for the point estimate, and the degrees of freedom and statistical significance (2-Tail). A t-ratio of 2 is, in general, significantly different from zero at the 95% confidence level.
Table 9 Matched pairs sample selection process Match variable
Plus or minus tolerance STAGE 1
STAGE 2
STAGE 3
STAGE 4
Sale date Sale type Actual use type Manual class type Manual class deviation Legal plan number Assessment neighbourhood Finished area Lot size Foundation type Number of garage stalls Pool on site Other buildings Corner lot Water on lot Waterfront lot Prime view Good view Fair view Number of carport stalls Effective age of improvements
90 days Equal Equal Equal 15% Equal n.a.
60 days 60 days 60 days 60 days 60 days n.a. Equal
60 days 60 days 60 days n.a. n.a. Equal n.a.
60 days 60 days 60 days n.a. n.a. n.a. Equal
150 ft2 500 ft2 Equal Equal
120 ft2 500 ft2 500 ft2 500 ft2
100 ft2 400 ft2 400 ft2 400 ft2
100 ft2 400 ft2 400 ft2 400 ft2
Equal Equal Equal Equal Equal Equal Equal Equal Equal
500 ft2 500 ft2 500 ft2 500 ft2 500 ft2 500 ft2 500 ft2 500 ft2 ’’
400 ft2 400 ft2 400 ft2 400 ft2 400 ft2 400 ft2 400 ft2 400 ft2 ’’
400 ft2 400 ft2 400 ft2 400 ft2 400 ft2 400 ft2 400 ft2 400 ft2 ’’
1 year if less than 5 yrs old; 33% of comparable’s age if older
’’
’’
’’
Number of bathroom pieces
2 bathroom pieces
’’ ’’
’’ ’’
’’ ’’
Notes: n.a., not applied.
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Table 10 Matched pairs sample: descriptive statistics N
Minimum
Maximum
Mean
Std. deviation
Subject sales: Single-family property bordering a greenway in the study neighbourhoods Sale date: subject 755 07/15/1980 02/26/2001 Sale amount: subject 755 $25,500 $575,000 Lot size sqft: subject 755 3552 16,553 Finished sqft: subject 755 1145 3812 Effective age: subject 755 0 22 Assessed total: subject 755 $184,800 $537,000
02/10/1989 $147,741 6932.89 2058.75 2.40 $244,689
$83,321 1414.81 427.19 4.05 $52,008
Control sales: Single-family property not bordering a greenway in the study neighbourhoods Sale date: control 755 07/15/1980 04/20/2001 Sale amount: control 755 $32,000 $613,000 Lot size sqft: control 755 3553 16,553 Finished sqft: control 755 1195 3960 Effective age: control 755 0 23 Assessed total: control 755 $185,300 $565,000
02/09/1989 $143,649.30 6920.36 2057.05 2.40 $243,496
$80,807 1406.70 427.50 4.24 $51,183
Table 11 The effects of greenway border on single family property value Estimated value of greenway border
95% confidence interval on estimated value of greenway border
Hypothesis test: ‘‘no change in value’’.
$
%
Lower
Upper
t-Ratio
Degrees of freedom (N—1)
Significance (2-tail)
$4092
2.8
$2207
$5977
4.261
754
0.000
$11,356 $1051 $20,618
6.9 0.8 8.4
$3639 $420 $5684
$19,072 $2522 $47,099
2.914 1.403 1.595
117 620 28
0.004 0.161 0.122
$17,515
10.2
$10,400
$24,630
4.882
104
0.000
$2524 $13,148 $670 $1359 $544 $18,307 $2344 $16,750
1.7 9.4 0.5 0.9 0.5 11.0 1.6 6.5
$1.51 $21,749 $6629 $1235 $1877 $10,375 $4275 $13,965
$5,050 $4546 $5289 $3954 $2965 $26240 $8962 $47465
1.973 3.211 .225 1.036 0.443 4.566 0.723 1.178
163 18 60 139 196 128 30 13
0.050 0.005 0.823 0.302 0.658 0.000 0.475 0.260
1980 THRU 1986 1987 THRU 1993 1994 THRU 2001
$3462 $3716 $6621
3.5 2.8 2.6
$1572 $1069 $663
$5352 $6,362 $12,578
3.615 2.759 2.202
184 455 113
0.000 0.006 0.030
Improve D Vacant
$6038 $1862
3.5 3.0
$3749 $4813
$8328 $1,090
5.180 1.244
568 185
0.000 0.215
All study neighbourhoods Small park size Green Timbers Huntington/ Bridlewood Parkway Semiahmoo Trail South Type Type Type Type Type Type Type Type
A AE BOP BOPE1 BOPE2 BP BPS BPE1
The first estimate in Table 11 is of the change in value for an average single-family property from adding the existing greenway border. We estimate that adding the existing greenway border increases property value by $4092 or 2.8%. The t-statistic for the test of the hypothesis of no change in value is 4.3 and this effect is highly significant at the 99.9% confidence level. The estimate is considered accurate within the range of $2207 to $5977 with 95% confidence. These results are
based on the full sample of 755 matched pairs of qualified property sales. Our analysis of the study neighbourhoods during the era from 1980 to 2001, supported by relevant data and based upon an analysis of the factors influencing value, strongly supports the inference that a green space border increases the value of single-family property. Green spaces were designated as small parks when their area is less that half the area of the adjacent lot,
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though they often are corridors and connect to a larger park space. The small park designation is given in addition to the other type categories, as indicated in Table 1. In some cases, nearly all the bordering properties are along ‘small’ parks, as in the case of undeveloped parks with small easements (Type AE; 27 of 30). Only the designation BOP, overhead lines and pathways, has no incidents of the green space being narrow relative to the lot depth, as one might expect with a utility right of way. We estimate that a small park border (of any type) increases property value by $11,356 (6.9%). This estimate is significantly different from the hypothesis of no change in value at the 99.6% confidence level (t-statistic of 2.9). The estimate is considered accurate within the range of $3639–$19,072 with 95% confidence. A small park type of green space appears to be more valuable to single-family property than a typical type of green space. Almost half of the ‘small’ parks were of the type BP, a park with a pathway, indicating that a simple greenway corridor border is of particular value. The next three estimates in Table 11 are of the change in value for a typical single-family property in each study neighbourhood separately. The small number of subject properties in Semiahmoo Trail North (n ¼ 31) precludes us from efficiently applying the matched pairs estimator in this study neighbourhood separately. It is still included in the study since it was used in the aggregate, but in hindsight its small sample size of matched sales properties should have excluded it from the study. In Green Timbers, we estimate that the green space border increases property value by $1051 (0.8%), and the estimate is considered accurate within the range of -$420 to $2522 with 95% confidence. In Semiahmoo Trail South, the increase was estimated at $17,515 (10.2%) and the 95% confidence interval for the estimate is from $10,400 to $24,630. In Huntington/ Bridlewood Parkway increases in property value are estimated to be $20,618 (8.4%) with the 95% confidence interval from -$5684 to $47,099. In this neighbourhood, the small and relatively heterogeneous sample of singlefamily properties bordering a greenway precludes making a more accurate matched pairs estimate. The values of a greenway bordering single-family property in the neighbourhoods of Semiahmoo Trail South and Huntington/Bridlewood Parkway are significantly higher than in Green Timbers. The Green Timbers area is the oldest of the greenways. It featured overhead power lines that curtailed the presence of larger mature vegetation, while other neighbourhoods have underground utilities. Further the Green Timbers greenway is straight, while the greenways in other neighbourhoods are more curved and attractive. These are the likely reasons that the results for Green Timbers were more modest than other areas.
The next eight estimates in Table 11 are of the value from bordering on different types of green space. We estimate that Type A, an open green space with no pathways, increases property value by $2524 (1.7%). Type AE, an open green space with small easements, decreases property value by $13,148 (9.4%). As noted above, this comprised only 30 subject properties and 27 of these were ‘small’ (less than half the size of the lot). On-site inspection of a greenway of this type revealed an overgrown corridor bordering nine properties. Deferred maintenance (perhaps to discourage its use as a shortcut to a nearby school) is more likely the reason for this effect than the easements. We find no significant change in the value of singlefamily property from adding a border on a park or greenway containing both overhead lines and a pathway (type BOP), a park or greenway containing both overhead lines, a pathway and minor or major easements (types BOPE1 and BOPE2), or a park with a pathway bordering on a schoolyard (type BPS). We estimate that adding the existing border on a park with a pathway (type BP) increases property value by $18,307 (11%). The t-statistic for the test of the hypothesis of no change in value is 4.6 and this effect is highly significant at the 99.9% confidence level. The estimate is considered accurate within the range of $10,375–$26,240 with 95% confidence. A park or greenway with a pathway and minor easements (type BPE1) increases property value by $16,750 (6.5%). The t-statistic for the test of the hypothesis of no change in value is only 1.2 and this effect is of little statistical significance at the 74% confidence level. The 95% confidence interval for the estimate is from $13,965 to $47,465. The small and relatively heterogeneous sample of single-family properties bordering on greenway type BPE1 precludes us from making a more accurate matched pairs estimate. Finally, the value of a green space border has increased over time, but not as quickly as the price of a single-family home (i.e. the dollar value has risen but the percentage value has decreased.) In the early 1980s the average value of a greenway border was $3462, or 3.5%. In the late 1980s to early 1990s, it was $3716 or 2.8%, and in the late 1990s it was $6621, or 2.6%. The overall value of housing in this market has increased which has lead to the decrease in percentage value of green space over time. The early 1990s saw a steep rise in the housing prices in the Fraser Valley, which outstripped the relative increase in value of specific location related amenities.
Conclusions and policy implications Our study clearly supports the inference that a green space border increases the value of single-family
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property in the study neighbourhoods during the era from 1980 to 2001. For the four study neighbourhoods in aggregate, a narrow or ‘small’ type of green space appears to be even more valuable to single-family property than a typical park. Since close to half of the ‘small’ park abutments were with pathways, this lends some empirical strength to the argument that greenways, like parks, help boost property values and perhaps more so than larger parks. This is important for municipalities looking at the financial and political feasibility of creating such corridors. Our analysis indicates a greenway border increases the value of single-family property in at least three of the four study neighbourhoods. One neighbourhood was not analysed independently due to insufficient sample size (Semiahmoo Trail North). The estimated values of a greenway border on single-family property are significantly higher in Semiahmoo Trail South and Huntington/Bridlewood Parkway than in Green Timbers. For the four study neighbourhoods in aggregate, we find a significant increase in the value of single-family property from a border on a natural park (type A) and on a park with a pathway (type BP). We find a significant decrease in value from a border on a park with a small easement (type AE). Other types of greenway borders exhibited either no significant effect on the value of adjacent single-family property, or our sample size was too small to yield value estimates with the matched pairs method. The long time frame studied (over 20 years) is another unique aspect of this investigation. It is useful to note that the value of bordering on green space endured over this time period. This is particularly striking in the largely suburban/rural landscape of the study area. The results of this study add to the body of evidence that parks and green spaces are a good investment. Adjacent homeowners capitalized the value of green space, as possibly do others in close proximity, though that analysis was beyond the scope of this study. Pathways or greenways appear to be particularly valuable. Relatively narrow strips of land can provide mobility for humans and wildlife, and potentially create buffers for sensitive ecosystems and provide other ecological services. It appears they might also help pay for themselves through increased tax revenue. In this study, narrow strips of green space categorized as small parks, are estimated to add $11,356 to the value of adjacent properties. Based on the lower bound of the confidence interval, $3639, the property tax revenue from this added value, for the 205 properties identified, would yield at least $7459.95 per year for the City of Surrey (assuming a 1% tax rate). The associated cost of establishing a greenway border were negligible to the City. Not only do greenways often share utility right-ofways that would not necessarily be developed as additional housing anyway, but developers are required
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by the local government act to make a 5–15% park dedication when creating a new subdivision. The City opted to direct this towards corridors rather than large park areas. Maintenance costs are similar between the two park types. The implicit value to residents and homeowners of green connections appears high. Other social welfare values are captured through parks development beyond property value. In 2002, the City of Surrey received an international award for promoting physical activity from the Pan American Health Organization and Centre for Disease Control. The Prize recognized Surrey as an outstanding City in the United States and Canada for improving public spaces for recreation and promoting physical activity. The Greenway program was an important aspect of their submission for this award contributing to their efforts to develop public space to provide a venue for physical activity. In addition, there is a public campaign to get people moving and enjoying their civic facilities. Special rates have been implemented for corporate clients and families to promote use of recreational facilities. Greenways specifically encourage biking and walking and so create active space for nearby residents as well as improving their home values.
Acknowledgements The authors wish to thank the City of Surrey, Department of Parks Recreation and Culture for commissioning the study on which this article is based. The following are individuals and organization for the assistance and support: Rick Bentley, AACI, Bentley Appraisals Ltd.; Nadia Carvalho, MA. Planning Consultant; Jeff Puhl and Rudy Nielsen, Landcor Data Corporation.
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