Post by guest blogger Dr. Geoffrey Donovan. His two main research areas are the economics of wildfire and quantifying the benefits of urban trees. He has worked since 2001 as a research forester for the USDA Forest Service’s Pacific Northwest Research Station. He has a bachelor’s degree from Sheffield University in biochemistry and a doctorate in forest economics from Colorado State University.
Campaigns to encourage tree planting typically make appeals to altruism: plant a tree to improve the environment, plant a tree for future generations, and so forth. These are laudable goals, but as an economist, I don’t find them especially compelling. I know that arguments that appeal to self-interest are more potent than those that appeal to altruism. In my research, I try to quantify the benefits of trees, and results suggest that planting a tree may be one of the shrewdest investments that a property owner can make.
One of the surest measures of a real-estate investment is how it affects the sale’s price of a property. In a 2010 study, I looked at the relationship between street trees and the sale’s price of single-family homes in Portland, Oregon. I found that, on average, houses fronted by a street tree sold for $7,130 more than a comparable house without a street tree. Interestingly, street trees also increased the sale’s price of neighboring homes, which suggests that planting a tree can be both self-interested and neighborly.
But, not everyone is a homeowner. About one third of the US population rents. Therefore, I was interested to find out whether renters were also willing to pay more for a house with trees. The study, published in 2011, found that renters were willing to pay an additional $21.00 a month for a house with a street tree and an additional $5.62 for a house with a yard tree. I was surprised by the significant difference between the value of a street tree and a yard tree. I suspect that the reason for this difference is that street trees provide immediate curb appeal to potential renters.
These results are not a peculiarity of Portland. Other studies have found a positive link between the sale’s price of homes and trees in places as diverse as Minnesota, Georgia, New York, Quebec, and Perth, Australia.
As interesting as the effect of trees on property values is, it would be myopic not to consider any other effects that trees may have. Just in my own research, I have found a relationship between trees and summertime cooling costs, crime, and public health. Although some of these benefits are more difficult to quantify in monetary terms, they provide additional evidence that an investment in urban trees can generate substantial and diverse returns.
In summary, there is mounting evidence that trees can significantly increase the sales or rental price of homes as well as generating a broad range of other benefits. In addition, investing in urban trees gives you a rare opportunity to both self-interested and altruistic.