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Examining Property Values and Green Infrastructure in Omaha, NE
Citation:
Hoover, FushciaAnn, J. Price, AND M. Hopton. Examining Property Values and Green Infrastructure in Omaha, NE. Ecological Society of America Annual Meeting, Louisville, KY, August 11 - 16, 2019.
Impact/Purpose:
Few studies have evaluated whether the benefits of green infrastructure (e.g., improved aesthetics) are capitalized into home values. This study employs difference-in-difference and repeat sales models to evaluate the effect of green infrastructure projects on the value of nearby homes in Omaha, NE. The research is applicable to all US cities interested in managing stormwater with green infrastructure and receiving other ecosystem services.
Description:
Population growth, changes in precipitation patterns, and aging water infrastructure have placed substantial stress on stormwater systems in cities across the country, resulting in degraded water quality and excess water quantity. These issues are particularly acute in areas with combined sewer systems. Aside from building larger reservoirs and tunnel systems, cities are encouraged to use green infrastructure (GI; e.g., rain gardens, bioswales, green roofs, etc.) to help manage their stormwater needs. However, few studies have evaluated whether the benefits of GI (e.g., improved aesthetics) are capitalized into home values. In 2009, Omaha, NE began renovating its combined sewer system to reduce combined sewer overflows and sewer backups. To date more than 25 projects have been completed, several of which included the construction or improvement of GI features in public parks. This study employs difference-in-difference and repeat sales models to evaluate the effect of GI projects on the value of nearby homes. Data on housing sales, housing characteristics, and GI projects were obtained for 2000-2018. Using methods established in the hedonic literature, we categorize homes within 0.75 km of parks as being within the park’s area of influence (treatment group) and homes between 0.75 and 2.0 km as being outside the park’s influence (control group). After accounting for key property and neighborhood characteristics, results from difference-in-differences and repeat sales models suggest a negative or statistically insignificant correlation between home values and GI features in public parks (R2 = 0.81, alpha = 0.01). To account for the possibility of results reflecting the transition period post-GI construction, we ran the models exclusively for GI projects older than 5 years and results were consistent with previous models. These unexpected results suggest that homebuyers are either unresponsive to the construction of GI features in existing parks or that the negative effects of renovating combined sewer systems (e.g., traffic disruptions) persist for several years after project completion.