Property Values and Greenspaces

Greenspaces in urban areas are scarce , shrinking under the pressure of development. Foreshore with adjoining green space is even more scarce. And therefore both become more valuable to urban dwellers.

This amenity  “value” is reflected in property prices, holiday rental prices, and in visitor valuations.

How much value? The best place I’ve found to get a sense of the magnitudes (and the methodologies) is the Coastalwiki.org page on Value of Amenities. Coastal foreshore frontage can add a premium of over 100% to a property – ie a doubling of land prices! Smaller but still significant price premia exist for living  adjacent to (20% to 50% higher , then short walking distance form then short driving distances from coastal foreshore regions with views – out to 7 or 8 km away. One Australian study found that uncertainty about whether the foreshore would be protected long term had a major (25% loss in property value).  Greenspaces like golf courses and parks, small or large, also command price premia. Whatever the precise numbers, ratepayers and household owners in Mapua benefit from keeping Waterfront Park as open accessible foreshore space. And so will the TDC – rates are levied on property values. so rate revenue for TDC is higher, the higher are this property values. But the TDC will also be selling nearly 20 properties on the  East of Tahi space. The value to buyers of this property will be increased anywhere between 20 to 50% above average prices  in the region – think Higgs Road. At a Higgs Rise price of $250k a section, 20 sections is $5 million – but add 20% price premia to that for living with a good view over the Waimea Estuary and for easy walking access to an along the foreshore, and your’ looking at an extra $1 million. And of course, adjacency to crowded parking , congested road use, and increased traffic itself lowers potential property values.

But its not just homeowners who value greenspace and foreshore access and views. Visitors do as well – and we all know Mapua has a growing number of visitors, long and short term. TDC figures suggest an average of 4000 a day during the summer periods, reaching peaks of 10,000. The range of valuations estimates are wide, but figures of roughly 6 euro (NZ$10)  per visitor  are indicative, but vary according to other survey evidence is gathered or travel cost study methods are sued. Also, households generally, whether property owners or not,  are even willing to pay  to prevent further development on and erosion of scarce waterfront and greenspaces.

These sorts of considerations show pretty clearly that positive amenity values of keeping the Waterfront Park undeveloped, green, and publicly accessible  to owners, ratepayers , visitors and the TDC itself dwarf any conceivable boat launching ramp benefits. Moreover, green space values and benefits are distributed widely, especially for  local residents living away from but near to the Waterfront Park and visitors – young or old, healthy or not, wealthy or not , in bad weather when one has the place to oneself, or sunny days when more people flock to the area. These values are “scalable” up and down, because of the “public good” nature of landscape and foreshore amenity values. Moreover, no expensive equipment is needed for us – juts a pair of shoes and a healthy enough body to  when there are many others to share the views and access with.  Contrast the distribution of benefits to trailerable powerboat owners being able to launch, and the capital good requirements of being able to use a launch ramp. Scalable? I don’t think so.

 

 

This simple idea follows from basic demand and supply for amenities  creates economic value for property owners, and for local councils whoaround the world and in most urban areas

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