How do urban parks impact housing prices? Mihaylo Economics Assistant Professor Mitchell Livy examined the relationship in his recent report on the capitalized value of local park renovations. He discusses his study and its relationship to Orange County’s vast parklands.
For more than 150 years, urban planners throughout the world have recognized the value of parklands to increase the desirability of cities and towns. Today, park maintenance is one of the leading allocations of local governments, with annual spending in America’s 100 largest cities totaling more than $6.3 billion. How does spending to improve parks impact residential housing values?
Mihaylo Economics Assistant Professor Mitchell Livy addressed this question in his recent study, “Maintaining Public Goods: The Capitalized Value of Local Park Renovations,” which appeared in the journal Land Economics in February.
Livy and H. Allen Klaiber, associate professor of agriculture, environmental and developmental economics at The Ohio State University, examined housing sales and local park improvements in Baltimore County, Md. He found that the impact depends on the specific park amenities undergoing renovation, with playground replacement and trail renovation showing the strongest impact.
He discusses the results of his study and the application to Orange County.
What would you like homeowners to know about the impact of local parks on the property values and gentrification of neighborhoods?
Local parks can affect neighborhood property values within a few miles of some park improvement projects such as playground replacement. However, these impacts are not the same across park compositions and community types. Homeowners should focus on the particular park improvements that benefit themselves and the larger community.
Your study discusses the budget shortfalls many municipalities have faced in recent years, creating the need to identify which park improvements best impact neighborhoods. What do you believe is the best strategy for communities?
The optimal design of a neighborhood park is not homogeneous. It is important that communities focus on providing amenities that best suit their needs. For some areas, open space may be desirable, while other areas may desire physical amenities such as playgrounds and tennis courts. Residents should participate in shaping local park compositions to meet the specific needs of each neighborhood.
In addition, communities should focus on the accessibility and preservation of existing parks when faced with increasing development pressure. As communities become denser, open space planning should be forward-looking and adaptable to a changing population.
Orange County’s parks include a very diverse 60,000 acres of shoreline, wilderness areas and urban parks. What do you see as the strengths and weaknesses of our local park system?
The main strength of the parks and open space in Orange County is the variety in landscapes and amenities. The Pacific Ocean to the west and the Santa Ana Mountains to the east are excellent assets to the community.
A challenge for our local park system is serving neighborhood needs. While the Orange County Parks Department has many large parks throughout the county, municipalities are also tasked with providing local parks. These parks are important complements to the larger regional park system in the county and are the most accessible form of open space for many residents.
What was your personal motivation for conducting this study?
Previous research has determined the value of open space can vary depending on variables such as density, crime rates and preservation status. However, no study had investigated the impact of individual park amenities and their renovations on nearby home prices. I was motivated to unbundle park amenities and determine which renovations have the largest impact on housing prices.