Parks and public spaces are an integral part of the atmosphere and culture of a city or town. More than that, though, they have a massive positive financial impact – one that is generally overlooked.
This is a guest post by Isabel Munson and Ed Krafcik.
The study of the economic value of parks is rather new, but important. Too often, parks are regarded as stagnant objects, only viewing the surrounding urban activity rather than motivating it or catalyzing changes to it. To consider parks a sunk cost after their construction is erroneous. Once a park is built and invested in, that park becomes an asset that generates savings and income for the local government, numerous different industries, and the public.
Soofa’s white paper, Smart Parks, analyzes this return on investment from parks. Soofa’s position is to use a data driven approach towards this management of parks, ranging from analyzing how many people use a park on any given day to measuring the return on investment from a capital expense related to, say, building a new entrance to a park or renovating an existing set of basketball courts. This return on investment is measured by how many people use parks or recreation facilities after capital improvements versus the baseline data that is collected prior to those improvements. A summary of Soofa’s Smart Parks white paper is provided below, and the full version can be downloaded here for free.
As the white paper describes in more detail, parks provide a return on investment in the following ways:
- Parks increase the property values of surrounding homes, which generates more property tax for the city government.
- Results are varied, but studies indicate that proximity to a park increases home value by two to 22 percent. The hedonic value of a park is dependent on how nice a park is and its size. Generally speaking, though, a park can reasonably be estimated to account for five percent of the value of homes within 500 feet. Famous parks and those with additional resources, such as pools, tennis courts, or cultural activities can have much higher premiums. By our estimate, an average park generates $4.57 million of hedonic value.
- Parks reduce air pollution and aid with stormwater management, both of which save money.
- Our estimated value of pollution savings by parks in the 100 largest cities is $258 million. The US Forest Service puts the national figure much higher, at $3.8 billion saved annually across the nation thanks to urban trees – 711,000 tons of pollution. We estimate the value of stormwater management by urban parks in the 100 largest cities to be $989 million a year.
- Green space helps to encourage active lifestyles and reduce stress, in turn reducing healthcare costs.
- Exposure to green space helps to reduce ADD/ADHD (and generally increase focus), lower blood pressure, expedite medical recovery, improve mood and sleep, and boost immune systems. If exposure to parks and green spaces even reduced anxiety by five percent, which studies would indicate is a low number, the productivity cost savings are $2.73 billion a year.
- A 2001 study on residents of a Chicago housing project highlighted the impacts of nature on chronic mental fatigue stemming from stressful life problems and environments:
- “Researchers found that residents with even limited views of trees or grass from their apartments reported less mental fatigue, less procrastination in dealing with life issues, and feeling that their problems were less severe, more solvable, and of shorter duration than residents with no views of nature. Even small amounts of nature, such as a few trees and a bit of grass, were shown to have an impact.”
- Parks improve likelihood to exercise, and therefore represent a factor that has reduced obesity costs.
- “A group of studies reviewed in the American Journal of Preventive Medicine showed that “creation of or enhanced access to places for physical activity combined with informational outreach” produced a “48.4 percent increase in the frequency of physical activity.”
- Tourists to notable parks generate additional income for nearby businesses and the local government.
- We estimate the total value of parks-based tourism in the 100 largest cities to be $494.28 million.
- The influx of visitors for parks and intersection of different people in parks creates social capital and feelings of community.
- At the most basic level, park activities and volunteer organizations provide community building and valuable hours of service, establishing a sense of responsibility for the wellbeing of the community. Using national volunteer data and the national Independent Sector value of volunteer work – $23.07/hour – the total value of volunteer hours is calculated to be $390 million. In addition, conservancy organizations in the 100 largest cities gave over $166 million in donations to parks in 2014. The total estimated value of community cohesion in parks is $557 million.
For city leaders, there has never been a better time than now to focus energy and investment on parks. New York City, for example, is doing just that – this past spring, we announced a new pilot program in partnership with the NYC Parks Department and Mayor’s Office of Technology and Innovation to help them make smarter parks. We’ve also partnered with other cities in a similar fashion.
No longer should parks just be looked at as the green spaces and refuges throughout a town or city; rather, they should be viewed as valuable assets that can generate economic and social returns to constituents, governments, and the private sector. When parks are considered in this light, then everyone will benefit. Citizens can have more parks nearby and city leaders can have a new source of value creation and capture. Local businesses can thrive by attracting more people – not only locals, but also tourists who flock to experience the great parks and open spaces a city has to offer.
What also emerges is a huge opportunity for innovation to happen. As parks become seen as integral parts of not only the physical landscape of a city or town, but also a revenue producing asset, the more the private sector will look for ways to increase this value. City leaders should welcome this coming trend of parks and public spaces innovation and harness its energy for the betterment of their cities.