Land preservation in communities raises home values, say researchersBy Peter Schuler
Don Coursey, the Ameritech Professor in the Irving B. Harris Graduate School of Public Policy Studies, and Ph.D. candidate Doug Noonan of the Harris School are challenging the notion that commercial and residential development usually translates into higher taxes for a communitys residents.
Coursey said his and Noonans task was to answer the question, Is there a way for economists to put a value on the environmental resources that exist in a community? In a recent study commissioned by a local conservation committee representing the southwest suburban Cook County communities of Palos Park and Orland Park, the two economists concluded that land preservation that enhances the quality of life significantly raises home values.
New development, on the other hand, broadens the tax base, and the added revenue is lost to pay for the increased costs of municipal services. Over-development strains local infrastructure, adds to traffic congestion, increases pollution and overburdens local schools.
As an example of local government preservation efforts, Coursey cited Orland Parks initiatives to limit housing density and to purchase green space for public use.
The Palos-Orland area is rich in forests, lakes and wildlife preserves compared to other Chicago communities. It is heavily used for recreation in all four seasons, both by residents and visitors, he explained. Using a 10-year time frame, typically the same measure developers use to assess valuation, Coursey and Noonan found that residents would see an average drop of $13,000 in home values, approximately 6.3 percent, if population density grew by 50 percent with a corresponding loss of preserved green space. Coursey noted that the area is an attractive and desirable place to live in large part because of ongoing preservation efforts.
Coursey and Noonan needed to find a method to provide the quality and depth of analysis of an original study, which typically costs about $1 million to conduct, for a small, local group with a very modest budget. The two researchers began by gathering numerous previously published studies of comparably sized communities with similar characteristics. They then chose a group of the most germane studies measuring public and private values to create a matrix for analyzing the Palos-Orland area.
They created a degradation scenario using a matrix of personal and public values that would negatively impact the community over time, including population density, distance to green space, increased traffic, distance to water parks and distance to recreation and other parks. As Coursey noted, using the highly overdeveloped town of Schaumburg as an example, A little piece here, a little piece there, another farm goes down, another mall goes up, another subdivision, and then it is obvious that the change is significant.
While the results of such a study, within a reasonable margin of error, can quantify the value of the natural environment in a communitys economic health, Coursey said this tool is not appropriate for analyzing all environments. A community near the Grand Canyon, for example, could not be valued using this same measurement.
Policymakers in small communities such as Palos Park and Orland Park now have a way to prioritize their planning decisions about the use of scarce resources, said Coursey. If this technique can be employed successfully for the Palos-Orland area, Coursey noted,then we have a template that can be used almost anywhere.