Got Land? Six Ways to Value the Economic Benefits of Parks & Open Space

The economic benefit of parks and open space is a critical consideration in economic development as protecting lands for passive and active recreation can be an effective economic development tool.

Parks and open space are often overlooked economic assets. In fact, park systems are typically viewed as expense black-holes: requiring significant amounts of investment in maintenance and operations or capital projects with little tangible benefit to municipal budgets. Parks and open space (natural areas) are seen as nice amenities, or luxuries to have, but their true economic value is seldom appreciated. This article outlines several ways to quantify the economic benefits of these lands in terms of jobs, tourism, property values, natural goods and services, health benefits, and direct use benefits.

Operations & Maintenance

Parks and open space generate economic activity in local communities through spending on maintenance and operations as well as capital projects. For example, staff employed to perform landscaping and other grounds keeping work on parks spend a large share of their wages at local businesses. This spending supports additional jobs and earnings at the local business where that worker shops. A portion of every dollar paid to workers circulates throughout the local economy “multiplying” the impact of that original dollar.

These impacts can be significant. A study that looked at the economic impact of local and regional park agencies nationally found that operation and capital spending on local and regional public parks had an annual economic impact of 999,000 jobs, $43.8 billion in salaries and wages, and $139 billion in economic activity.[1]

Tourism & Visitor Spending

Both local and larger regional parks can draw in visitors to communities and generate new spending in local economies. Basic investments in trails and parking can open up large swaths of open space to outdoor recreation enthusiasts that spend money at local businesses on food, equipment, clothing, lodging, gas, and others. Local municipal parks, however, can also draw visitors. One of the most common and significant ways to take advantage of a local park system for tourism is to host youth sports tournaments. Tournaments attract many out of town participants and their friends and family members who come to watch. These visitors represent a new infusion of money into the local economy. Multi-day tournaments are especially effective as overnight visitors spend significantly more than visitors just coming for the day.

Tournament visitors can add up to a significant boost to the local economy. One recent study that looked at two youth sports tournaments in Traverse City, Michigan found that 319 teams participated with 5,551 athletes and 17,400 total attendees. Non-local families spent nearly $1,000 during their stay. The direct spending in the region from these families amounted to $3.4 million, not including the indirect economic impact as these dollars circulated throughout the economy.[2]

Property Values

People are willing to pay more to live near parks and open space, which are seen as positive amenities. As a result, property values in close proximity to parks have measurably higher values, all else being equal. This phenomenon, known as the “Proximate Principle” has been studied extensively. Research by John Crompton has indicated that parks can have a positive impact of 20% or greater on the values of properties directly adjacent to a passive park area.[3] Other research found that community parks can provide benefits up to 33% of the residential real estate value and that the positive impacts of a community park may extend up to 2,000 feet (over a third of a mile).[4] The significance of this impact is that municipal property tax revenues, one of the most important revenue streams for municipalities, are enhanced. Parks can also be used as a tool to attract homebuyers, as research shows that parks and trails rank among the top amenities homebuyers are looking for.

Natural Goods & Services

Parks and natural areas provide natural services such as air pollution removal, flood control, water purification, climate change mitigation, and natural goods such as agricultural products and timber. These goods and services have measurable economic value. For example, consider the services provided by trees, which are highly effective in sequestering carbon and removing air pollution. US Forest Service researchers estimate that each year New York State’s urban and community trees remove 434 metric tons of Carbon Monoxide, 15,825 metric tons of ozone 3,269 metric tons of sulfur dioxide, and 1.6 million metric tons of carbon from the air. The total value of air pollution removal was estimated to be $302.5 million annually (figures in 2000 dollars).[5] Another significant natural service provided by parklands is stormwater control. By reducing runoff, parks can decrease municipal expenditures on stormwater management, which is often a costly expense for communities.

Direct Use Value

Direct Use Value is more complicated to quantify but it is still an important measure of the value of parks and open space. It refers to the use of the lands by local residents. Their use does not contribute directly to local economies the way visitor spending does (i.e., spending by local residents isn’t “new” to the economy). Direct use measures the value of using a park to a particular resident and is based on how much money that person would have been willing to spend to do a specific activity if they were “forced” to pay for it. For example, a woman that goes jogging in the park might have been willing to pay $3 for that experience if it wasn’t free. By being able to exercise in the park for free, she “saved” $3, which is the direct use value. The U.S. Army Corps estimates values for different types of recreation with general activities ranging from $4 to $12 per day and specialized recreation ranging from $16 to $46 per day.[6] When the full range of activities and visitation to park systems is considered, park systems have been shown to have direct use values in the hundreds of millions annually to the local residents they serve.

Health Benefits

Access to parks and open space promotes exercise and healthy living. Research has shown that those that live near parks tend to exercise more, which reduces health costs related to obesity such as heart disease and diabetes. The Trust for Public Land, a national conservation non-profit, estimates that there is a $250 annual cost difference between those who exercise on a regular basis and those who don’t. When looking at senior citizens, the value jumps to $500 because of higher health costs. When these values were applied to the number of Sacramento City residents that “engage actively enough in parks to improve their health” the results showed that the health care savings for city residents totaled $19.9 million annually.[7]

The economic benefits of parks and open space require a broader perspective than what is typically considered in economic impact analysis to fully account for the full value provided by these lands. In addition to the measurable economic value of parks and open space, there are numerous other economic benefits that are more difficult to quantify that community and economic developers should consider. For example, parks and open space contribute to a high quality of life, which helps attract a talented workforce and the businesses looking to recruit these workers. The economic benefit of parks and open space is a critical consideration in economic development as protecting lands for passive and active recreation can be an effective economic development tool.

[1] https://www.nrpa.org/uploadedFiles/nrpa.org/Publications_and_Research/Re...

[2] http://tcchamber.org/wp-content/uploads/2012/10/YouthSportsReport.pdf

[3] http://www.actrees.org/files/Research/parks_on_property_values.pdf

[4] http://c.ymcdn.com/sites/www.ilparks.org/resource/resmgr/research_docume...

[5] http://www.nrs.fs.fed.us/pubs/gtr/gtr_nrs47.pdf

[6] http://planning.usace.army.mil/toolbox/library/EGMs/EGM16-03.pdf

[7] http://cloud.tpl.org/pubs/ccpe-econvalueparks-rpt.pdf

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