Urban forestry experts have long suggested that tree canopy cover in residential and urban areas is essential to maintaining a healthy ecosystem in those communities, but a new study suggests that tree cover may also contribute to increased property values.
The study, published in the August issue of Ecological Economics, is a collaborative project between the Virginia Tech Program in Real Estate, the university’s Department of Forest Resources and Environmental Conservation, and the U.S. Forest Service.
Changes in tree cover owing to climate change and urbanization impact both people and the environment. With many communities dealing with tree cover losses, scientists are working to help the public understand the value of trees to their local ecosystems. This study was born out of a desire to understand how tree cover affects residential property values in the hopes of finding an economic incentive for homeowners and communities to conserve trees.
Kevin Boyle, director of Virginia Tech’s Program in Real Estate and professor of agricultural and applied economics in the College of Agriculture and Life Sciences, initially partnered with Thomas Holmes, a forest economist with the U.S. Forest Service, to study the economic effects of forest pests on urban trees. The Forest Service hoped to use the data to support agency decision making and to advise communities on the economic benefits of healthy urban forests.
As they gathered their data, Boyle and Holmes began to wonder if there is a systematic relationship between homeowners and community residents and the values they place on the tree cover around them. To find out, they enlisted the help of two Virginia Tech urban forestry experts.
The researchers conducted a meta-analysis of 15 published studies from across the U.S. that assessed how much the trees on or near residential properties add to the sale prices. They used a statistical model that breaks down the total value of properties into the prices of various characteristics, such as tree cover. This meta-analysis synthesized the findings from the 15 studies to discern what the results collectively imply about the relationship between tree cover and property values.
The meta-analysis considered data on both property-level tree cover on or near residential properties and county-level tree cover in the county where the properties are located.
“A meta-analysis of this geographic breadth is very powerful because it allows us to make very broad inferences about tree cover effects on property values,” said co-author Eric Wiseman, associate professor of urban forestry and arboriculture in the College of Natural Resources and Environment. “Most previous studies have only looked at one or two cities at a time, which makes it difficult to generalize findings to broad geographic areas.”
The researchers found that the contribution of tree cover to real estate value maximizes at about 30 percent cover at the property level and about 38 percent at the county level. Perceived benefits, such as scenery, privacy, shade, and recreation, all contribute to this rise in property value.
“This estimate is consistent with the ecological goal (40 percent) set by the organization American Forests for the communities on the East Coast and in the Pacific Northwest,” said primary author Shyamani Siriwardena, of Kegalle, Sri Lanka, a doctoral student in forestry who is advised by Boyle and Kelly Cobourn of the Department of Forest Resources and Environmental Conservation.
When tree cover surpasses maximum levels, the amount it adds to the property value decreases. Researchers could not point to concrete reasons for the decrease, although they believe that greater amounts of tree cover may be seen as excessively costly or hazardous owing to tree litter, falling branches, or nuisance wildlife.
“The average tree cover in our study areas was 14 percent, which means that communities were about 24 percent under-invested in tree cover at the time of our study, so communities and property owners may not be taking full advantage of the contributions that trees could make to their property value,” Wiseman said.
Boyle noted that “communities would benefit from enhanced property tax revenues as property values increase due to enhanced community tree cover.”
In addition, the study results suggest that trees that are more than 120 years old, in addition to providing more ecological value than younger trees in terms of carbon storage, air pollution control, and energy conservation, can also contribute to property value owing to the provision of more shade and aesthetic benefits.
As for the future of her tree cover research, Siriwardena said: “We need more data to add spatial breadth and location-specific depth of the value of tree cover to confirm the results we found.”
Even in the preliminary stages, however, this type of study holds important implications for homeowners and communities. “Maintaining tree cover on your property is a way to maintain and enhance the resale value of the property,” Boyle said.
“When people think about the value of their homes, they tend to focus on the man-made amenities: bedrooms, patios, hot tubs, and so forth,” Wiseman said. “While these amenities will always be primary considerations when buying a home, it is important for people to consider the significant financial contribution that trees can make to the largest asset they own. And there are so many other benefits that come with those trees, such as clean air, cool surroundings, and watchable wildlife.”