Corporate Professional Local

Urban parks, open space and residential

property values
FiBRE
Findings in Built and Rural Environments July 2007

Sixty second summary

Urban parks and open spaces are
valuable resources. They can help
improve the quality of life in urban areas,
have essential environmental functions between accessibility to various types
and, by increasing the attractiveness of of urban open spaces and residential
the places in which people live and work, property values. It provides evidence that
can have economic benefits. residents in Aberdeen do see extra value
in open green spaces, which is reflected
They are, however, under threat. The
in the premium they are prepared to pay
2001 Public Parks Assessment by the
to secure a property that has this
Urban Parks Forum, jointly
advantage. The key findings are that:
commissioned by DTLR, Heritage
Lottery Funds, English Heritage and the • the overall premium for a property next
Countryside Agency, showed that urban to a park, relative to a similar property
parks in the UK are in serious decline. 450 metres away, is positive across all
house types. The price premium
The significance of urban open spaces
ranges between 0.44% and 19.97%
has been placed high on the research
depending upon house and park type
agenda, with many existing studies
focusing on the analysis of existing • however, while a premium is attached
literature on the economic, social, to flats that are in close proximity
ecological and health benefits of urban to a park, this attracts a negative
open space. These links have, however, premium for houses. This could be
been established almost entirely on the due to the potential negative attributes
basis of experience in countries outside that are often associated with parks,
of the UK. particularly in the evening, such as
anti-social behaviour
With funding from the RICS Education
Trust, Neil Dunse, formerly of the • city and local parks are valued most
University of Aberdeen (now at Heriot highly by occupiers of detached
Watt University), and colleagues Carolyn properties, whereas proximity to
Dehring and Michael White, explored the amenity green space is valued most
effects that urban parks and open highly by occupiers of non-detached
spaces have on residential property properties
values within the UK, using Aberdeen as
• the findings suggest that rectangular
a case study area, measuring the effect
or oblong (long/narrow) parks are
on residential property values of
preferable to square or circular
proximity to the city’s urban parks and
(short/wide) parks. A rectangular park,
amenity green spaces.
for example, would potentially offer
This research adds to the current debate greater opportunities for access –
by calculating the economic benefits and suggesting that accessibility as well as
improving the understanding of the link proximity is important to households.

Research www.rics.org
 Urban parks, open space and residential property values

“Urban parks and open spaces

are valuable resources

” Measuring the economic benefits of open space

From an economic perspective, the valuation of urban open space is difficult

“
to calculate because it is a classic public good, where there is no market
price. Its lack of value in monetary terms prevents urban open space from
being properly evaluated in cost-benefit analyses.
…there is a need for further
Nonetheless, questions concerning the economic value of open spaces have
research to be undertaken in been addressed by economists through the use of two broad methodological
a UK context… approaches: stated and revealed preference, and through the use of hedonic
pricing models.

Setting the scene

” Stated preference relies on survey techniques to elicit individual
preferences and values for environmental goods. An example of this
technique is contingent valuation, whereby individuals are asked to
The quality of urban spaces was investigated indicate the maximum price they are willing to pay for an environmental
by the UK’s House of Commons Environment good or benefit.
Transport and Regional Affairs Committee in
1998-1999. This inquiry reported an information Revealed preference uses observed market choices from individuals
deficit on urban spaces and in response, together to reveal their underlying preferences, as well as to estimate the values
with information from the 2000 Urban White these individuals place on goods and services. Hedonic Pricing Models
Paper from DETR, the UK Government are one example of this technique.
established the Urban Green Spaces Task Force. Hedonic Pricing Models. In the context of urban open spaces, the basic
More recently, the importance of urban open concept is that a residential property is a heterogeneous good consisting
spaces has also been placed high on the research of a bundle of characteristics – such as bathrooms, garages and
agenda of a number of influential organisations bedrooms - each of which contributes to its sale price (including the
within the UK, including Scottish Natural Heritage environmental attributes of the residential bundle, such as the amount
and CabeSPACE. of green space available). Regressing (evaluating the relationship
between one dependent variable and one or more other variables)
Despite this recent progress, while there is
transacted house price (the dependent variable) against this bundle
a wealth of information available from other
of characteristics captures the value of the environmental attribute
countries, in particular the USA, it is evident
capitalized in the price of the house, and allows the private benefits
that there is a need for further research to be
of open space to be estimated.
undertaken in a UK context. This research by
Neil Dunse and colleagues was therefore
conducted from a UK perspective in order
So how have these techniques been used in the past? The researchers
to address this disparity.
conducted a comprehensive literature review in order to establish what
But just how can the effects of urban open space existing studies have found and how this could be applied to a study
on residential property values be measured? in the UK.
 Urban parks, open space and residential property values

Literature review
Since the first application of the hedonic pricing approach to the valuation of
environmental goods and services, there have been a number of studies in
the USA on the effects of open space on property values. However, only a And what about the US studies?
limited number of studies have been undertaken in the UK. Let’s take a quick
look at what they found.

UK Studies US Hedonic studies

Over the past 40 years a number of US studies, adopting

The researchers identified two key studies that had been
hedonic pricing theory, have focused on the value of open
undertaken in a UK context:
spaces and urban parks. The statistical results from these
1 In 2003, the Greater London Authority (GLA) developed earlier studies reveal that the further a property is away from
a hedonic model to value ‘greenness’ across the City of a park, the lower its selling price. However, such studies
London’s 760 wards. The analysis modelled the average appear to reflect the underdeveloped nature of the statistical
house price and open space as the percentage of green tools and research designs available at the time.
areas in each ward with a series of socio-economic
In recent years, due to three key developments, researchers
variables. The results suggested that, holding all other
have been able to refine the technique:
factors constant, higher property values exist in areas with
a higher percentage of open space. 1 Hedonic analysis and the statistical tools associated with
it have become increasingly sophisticated. This has
2 A 2005 report by CabeSPACE investigated the
allowed the range of other factors that may contribute to
economic benefits of urban green spaces through the
changes in property values to be considered.
examination of a series of UK case studies. This used an
appraisal approach, whereby identical hypothetical 2 Residential estate agents have developed electronic
properties were appraised at three different locations databases of sales transactions, including details of the
within the vicinity of the park (adjacent to the park, two structural and physical attributes of the property. These
blocks away from the park, and several blocks away from can be transposed onto electronic maps within a
the park). Geographical Information System (GIS) and spatially
integrated with the location of parks.
The results show that overlooking or being close to a high
quality park can have a positive affect on value. However, 3 The development of GIS enables transaction and
the range is wide – properties on the park achieved an attribute data to be mapped by individual street
average premium of 11.3% (standard deviation of 9.4%) addresses, allowing for accurate calculation of distances
and properties within close proximity achieved an average between locations, such as house and park.
premium of 7.3% (standard deviation of 9.4%).
Neil Dunse and colleagues reviewed these more recent
hedonic1 studies with reference to four key categories:

“…the valuation of urban open space

is difficult to calculate because it
is a classic public good, without
a market price…
1 Proximity to open space

2 Condition

3 Development potential

4 Economic status of the area.

1 ”
Bolitzer and Netusil, 2000, The Impact of Open Space on Property Values in Portland, Oregon. Journal of Environmental Management 59, pp 185-193.
Lutzenhiser and Netusil, 2001, The Effect of Open Space on a Home’s Sale Price. Contemporary Economic Policy 19(3), pp 291-298.
Espey and Owusu-Edusei, 2001, Neighbourhood Parks and Residential Property Values in Greenville, South Carolina. Journal of Agricultural and Applied
Economics, 33(3) pp 487-492.
Geoghegan, 2002, The value of open spaces in residential land use. Land Use Policy, 19, pp91-98.
Irwin, 2002, The Effects of Open Space on Residential Property Values. Land Economics, 78(4), pp 465-480.
Cheshire and Sheppard, 1998, Estimating the demand for housing, land and neighbourhood characteristics. Oxford Bulletin of Economics and Statistics,
60, 3, pp 357-382.
 Urban parks, open space and residential property values

Proximity to open space

Figure 1 Price Effect and Proximity to Open Space,
Generally, open space is an amenity and as such
Bolitzer & Netusil (2000)
has a positive influence on property values. But
how far does this effect reach? The researchers Distance from Park (m) % Change
considered the work of Bolitzer and Netusil carried
out in 2000, whereby data from Portland, Oregon, Distance < = 30 Ns
Distance 31 - 120 4.09
USA was analysed.
Distance 121 - 210 2.96
This analysis found a positive but not statistically Distance 211 - 300 2.28
significant effect on the sale prices of homes Distance 301 - 400 2.18
adjacent to (within 30 metres of) open space. At Distance 401 - 450 1.51
distances greater than 30 metres, and up to 450
metres, from open space, homes were found to
However, it should be noted that a potential weakness of this particular study
sell for statistically greater prices than homes
is that all types of open space were grouped into one variable. Other studies
located over 450 metres from open space.
have since gone on to extend this analysis to measure the amenity effects
of open spaces that provide specific uses.

“
In 2001 Lutzenhiser and Netusil found that all forms of recreational open
space had a statistically significant influence. Of greatest significance were
natural area parks – homes within 450 metres of this type of space were
…open space is an amenity estimated to sell for 16.1% more than homes outside the 450 metre buffer.
and, as such, has a positive Other types of open space having a statistically significant influence were:
influence on property values… golf courses (13.3%), speciality parks/facilities (8.5%) and urban parks
(1.8%).

” It seems that properties over 450 metres from an open space do not attract
the same premiums as properties within this 450 metres buffer. Is there a

“
prime location in terms of distance the open space? The results suggest
there are relative disadvantages to being located directly next to open spaces,
since the largest premiums were in the 61-120, 121-180 and 121-180
…all forms of recreational
metre distance bands, respectively.
open space had a statistically
Being in close proximity to open spaces does have positive impact on
significant influence… property values, but this is largely dependent on the type of open space and

”
distance from the space. But what about the condition of the open space –
does this have an impact at all?

Figure 2 Price Effect and Proximity to Different Classifications of Open Space, Lutzenhiser & Netusil (2001)

Distance from Park (m) Urban Park Natural Park Speciality Park
Distance <= 60 2.9 16.9 11.1
Distance 61 - 120 3.1 15.4 8.6
Distance 121 - 180 1.8 19.1 15.4
Distance 181 - 240 ns 16.9 8.5
Distance 241 - 300 ns 13.5 7.4
Distance 301 - 365 2.5 12.2 6.9
Distance 366 - 450 ns 15 5.8
ns – not statistically significant 10% levels
 Urban parks, open space and residential property values

Condition of open space

The researchers next considered whether the appearance of open space can
determine the level of amenity effects derived from it.
This was addressed in a 2001 report by Espey and Owusu-Edusei, whereby
small and medium-sized neighbourhood parks in Greenville, South Carolina,
USA were investigated. They found that the appearance of a park does
influence the value of neighbouring residential properties. The parks were
grouped into four categories: small and attractive, small and basic, medium
and attractive, medium and basic.
The analysis of existing literature by
It was found that small, attractive parks have a positive and statistically Neil Dunse and colleagues identified
significant influence on neighbouring property values and medium sized, a number of important points:
attractive parks exhibited a positive, but not statistically significant, effect.
Basic parks, on the other hand, were found to have a negative and statistically • Open space has a statistically
significant impact on neighbouring property values. significant, positive impact on the
sales price of neighbouring residential
Attractive parks appear to have a positive effect on house values, but what properties. The premiums associated
happens in cases where parks and open spaces have development potential, with open space do however vary
and the land use could change? according to: type of park; layout of
property; nature of the location; and,
to some extent, the nature of the local
Development potential: developable vs. preserved population and value of the
property involved
Neil Dunse suggests that any amenity values associated with an open space
are likely to vary, depending on its development potential - permanently • Not all forms of open space are valued
protected open space may be valued more highly than open space that equally by households
could be developed in the future. This does seem to be the case.
• Developable open space, such as
A study of a suburban county of Washington DC and Baltimore, Maryland,
farmland and forested land, can provide
USA by Geoghagen in 2002, indicated that permanently preserved open
amenity effects, albeit at lower levels
space increases nearby residential property values over three times more than
than permanently protected open space
space that has development potential.
But is proximity to open space of as high a priority to all types of households? • There is a limit to how far the
Do those looking to buy in lower-income neighbourhoods attribute more value externalities from parks extend – in the
to open space than buyers looking in higher income neighbourhoods, US studies the externalities do not
for example? extend beyond a quarter of a mile,
suggesting that open spaces should be
regularly positioned throughout cities

Economic status of neighbourhood • And finally, the economic status of

a neighbourhood is a factor in the
The researchers suggest that, characteristically, lower income neighbourhoods
analysis of the fiscal impacts of open
often suffer from negative externalities such as, ‘noise, congestion, higher
space protection.
crime rates, and poor performing schools’ that could ‘potentially counteract
the amenity effects of open space’.
This issue was addressed in Portland, USA by Netusil et al in 2000, who
found that the effect of open space is dependent on assessed home values
We know what is happening elsewhere,
within a neighbourhood. Using sales data from the area, they found no so let’s now take a look at what the
statistically significant amenity effects were attributed to open space located researchers found in their study of the UK.
in neighbourhoods with low to medium value homes.
A rare UK study by Cheshire and Sheppard in 1998, estimated a demand
system for housing attributes. This also found that demand for open space
rises with income.
So what exactly have these previous studies taught us? What are the major
points for consideration when starting an analysis of the UK?
 Urban parks, open space and residential property values

“
…demand for open space
rises with income…

”
The case of Aberdeen, Scotland, UK

City of Aberdeen - Classifications

Location North East of Scotland; Scotland’s third largest city.
of open space
Population 250,000 (approx)
Amenity green spaces are landscaped areas
Urban Parks and Open Spaces The city itself contains a large number that provide a visual amenity, or separate
of public parks and amenity open spaces, which have different buildings or land uses for
been grouped into a number of categories by the City Council: environmental, visual or safety reasons.
City Parks; Local Parks; Amenity Green Spaces.
City Parks are large parks with a number of
different facilities, capable of attracting a large
Neil Dunse and colleagues focused their analysis on public parks (divided into number of residents and visitors.
two categories: city parks and local parks) and amenity green spaces. The
data they used was obtained from the Aberdeen Solicitors Property Centre Local Parks tend to serve a smaller
(ASPC) and focused on residential sales from the City of Aberdeen between catchment area than city parks and have
1984 and 2002. There were a total of 53,674 observed sales over this fewer facilities and/or are smaller than a city
period, which covered the three basic residential property types in the UK: park, but can contain specific attractions.
1 Detached housing: single-family units, typically of one or two levels. Source: Aberdeen City Council
2 Non-detached housing: as detached housing, but sharing a common wall
with neighbouring properties.
3 Flats: multi-occupied buildings, normally built
to a maximum of four levels.

Also included within this dataset were: property address, postal code, property
geo-code, sale price, date of sale, and various structural attributes. Using GIS,
the researchers also added distance and location variables to the dataset.
These included:
1 distance from the boundary of each park
and perimeter of open space.
2 proximity to major road networks.
3 proximity to school catchment areas.

To guard against mistakenly attributing price differentials to a property’s

proximity to parks and amenity green spaces, when the real influence comes
from other location-specific variables, the researchers included other location
variables in their analysis to control for this.
This control, aimed at neutralising the effect of all other location specific
influences, was implemented by including: distance to the Central Business
District (CBD), whether the property is located on a busy road, and the school
catchment area within which the property lies.
 Urban parks, open space and residential property values

“…permanently preserved open space

increases nearby residential property
values over three times more than
space that could be developed in
the future…

” Conclusions
What can be learnt from this study?
The aim of this study was to improve our
understanding of the economic benefits of urban
open spaces, as revealed through local house
So this is how they went about the prices. Using Aberdeen as a case study, it appears
analysis, but what exactly was the that its residents attach a marginal value to open
outcome? green spaces – this is reflected in the premium
they are prepared to pay to secure a dwelling that
has this advantage.
Neil Dunse reports that ‘relative to a property
Key findings located 450 metres away from a park, a property
located on the edge of a park could potentially
• City and local parks are valued most highly by occupiers of detached attract a premium of between 0.44% and 19%.’
properties, whereas proximity to amenity green space is valued most highly This research has also demonstrated that types of
by occupiers of non-detached properties. open space are valued differently, with larger parks
that have an array of facilities and amenities being
• When it comes to proximity to the park edge, while there is clearly a more highly valued than areas of amenity
premium attached to flats in close vicinity to the park, a negative premium green space.
is attached to this attribute for houses, which may be due to the potential Looking at the situation in more detail, it seems
negative externalities that may surround parks, particularly in the evenings. that different household types value accessibility
differently – occupiers of flats attach a positive
• By combining two variables, properties located 450 metres from park edge premium to being located on the park edge,
and properties located next to a park, the researchers discovered that the whereas occupiers of houses tend to value this
overall premium for a property next to a park, relative to a similar property more negatively.
450 metres away, is positive across all house types. The price premium Overall, this study demonstrates that there are
ranges between 0.44% and 19.97% depending upon house and park type. likely to be opportunities to extract higher profits
These findings are lower than the premiums found in the CabeSPACE if the inclusion of open space creates an
study, but are in line with a number of US studies. environment that is attractive to purchasers.2

• Although city parks are on average more highly valued, local parks are
About the study
more consistently valued across all house types.
This study was supported by a grant from the
• The findings suggest that rectangular or oblong (long/narrow) parks are RICS Education Trust: www.rics.org/educationtrust
preferable to square or circular (short/wide) parks. A rectangular park, for The full report can be downloaded from
example, would potentially offer greater opportunities for access – www.rics.org/research
suggesting that accessibility as well as proximity is important to households. FiBRE written by Amy Roberts, RICS.

2
It should be noted that this report is indicative but not comprehensive in its valuation of green space – green spaces have a number of attributes, each requiring
a different methodology to measure it; this report only considered open space from the perspective of households; and it does not include sections of the
population who do not own their own homes.
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