Report: Open spaces have positive financial impact

November 20, 2010

Evan Brandt, Journal Register News Service- The Times Herald

VALLEY FORGE - Forget the bluebirds, the bog turtles and the spotted owls.

Don't look for any talk of endangered species, damsel fly larvae or deep discussions of biodiversity.

Instead, pick up a report released last week by the GreenSpace Alliance and the Delaware Valley Regional Planning Commission and what you'll find is an in-depth discussion of cash - cold hard cash.

That's because the study, as its name suggests, examines "The Economic Value of Protected Open Space."

As was the case during the recent debate over an open space referendum narrowly approved Nov. 2 by East Coventry voters, discussion about open space preservation usually revolves around how much it costs to buy or preserve the land and how much property tax revenue might be lost as a result.

Supporters of such preservation efforts often point to studies done around the nation that show that the costs that accompany developed land - schools, fire, water, sewer and police services - vastly outweigh the tax revenue that land generates.

Now they can point to a study - written by the Economy League of Greater Philadelphia, Econsult Corp. and Keystone Conservation Trust - that looks into their own backyard and clearly lays out what you get out of preserving open space there.

"Put simply, when we preserve open space, we protect our pocketbooks," said Delaware County Councilman Andy Lewis, who is also a member of the DVRPC board.

"Now we have proof that by investing in preserving this land, we are also investing in our local economy, supporting jobs and generating revenue," said Chester County Commissioner Carol Aichele, who is also a DVRPC board member.

Both were speaking at the news conference, held at one of the region's premier open spaces, Valley Forge National Historical Park, announcing the report's release.

The report builds off previous work - including a 2004 Wharton School analysis concluding street trees in Philadelphia's New Kensington neighborhood add 10 to 30 percent to surrounding housing values, and a 2008 study by the Trust for Public Lands that examined the economic value of the 10,000 acres of parkland in the City of Philadelphia - and expands the matrix to include the four surrounding counties of Bucks, Chester, Delaware and Montgomery.

"Our farms, forests, stream valleys and parks are more than just pretty places," said Montgomery County Commissioner Joseph M. Hoeffel, who also serves as the chairman of the DVRPC. "They are productive assets that generate significant economic value for our region."

Consider, for example, that most municipalities with a public water system would consider their water treatment plant to be an asset - one that has a cost to operate and creates a measurable benefit - clean water that can be sold.

But also consider that few methods of producing clean water are more effective (or more attractive) than a woodland or wetland. Like the man-made plant, that acreage has a cost, that of preserving it, and produces a financial benefit, which is less often measured.

No longer.

In Montgomery County, the study finds that the 30,367 acres of preserved land provides $1.3 million worth of water filtration services each year.

In Chester County, which at 92,630 preserved acres has protected three times more land than its northern neighbor, the consequent water filtration services are similarly more than three times those of Montgomery.

Proportionally, Delaware County's 12,741 preserved acres provide $900,000 worth of water filtration each year, the study found.

A similar analogy can be made for flood control.

Everyone knows dikes and dams - the traditional engineering methods for trapping water away from where you don't want it to go - cost money.

But each year these three counties received a combined $20.3 million worth of flood prevention - all with a dazzling fall foliage display thrown in at no extra charge.

As the report summary puts it, open space provides three benefits we can all appreciate - "clean air, pure water, dry basements."

In an effort to bring these results even closer to home, the study looks at four economic benefits - property values, recreation and health, environmental services, and economic activity - and offers case studies of just how those benefits play out as a result of an open space asset.

Here's a quick look at some of them:

RECREATION AND HEALTH

At 19 miles, the Perkiomen Trail, completed in 2004, is the second longest trail in Montgomery County and runs from Oaks to Green Lane.

In 2008, the Rails-to-Trails Conversancy (the Perkiomen runs along the former rail bed of the Reading Railroad's Perkiomen Branch) estimated the trail hosts nearly 400,000 unique visits each year.

Those visitors generate an estimated $19.8 million in annual economic activity.

Overall, the study estimates that open space recreation generates economic activity in the millions for all three counties - $68.6 million for Chester; $80.6 million for Delaware and $117.5 million for Montgomery.

Well known for its bikers and joggers, the Perkiomen, like other trails in the region, is an obvious host to physical activity - a half-hour or more of which three-or-more times a week is documented to provide significant health benefits.

Working off a survey conducted in 2009 by the Pennsylvania Department of Conservation and Natural Resources, the open space study concluded that on average, the residents of the five-county region conduct 41 percent of their physical activity in a park or on a trail.

This mirrors results of last year's study of the economic impacts of the Schuylkill River Trail, also conducted by the Rails-to-Trails Conservancy, which found that nearly 60 percent of that trail's users listed "health and exercise" as their primary reason for being on the trail - and more than 70 percent said they spend from one to more than 20 hours on the trail.

That exercise prevents another $199 million per year in health costs, the open space study concluded.

Being a couch potato also increases the chances of strains and sprains and prolongs recovery from injury - meaning more time away from work. As a result of the exercise that open space hosts, the study concluded another $2.6 million in workers compensation costs is avoided by employers each year in southeast Pennsylvania.

Further, another $485.4 million in improved productivity is enjoyed by businesses each year in southeast Pennsylvania as a result of the exercise performed at that open space, according to the study.

"I think those were the results that surprised me the most," said Dulcie Flaharty, executive director of Montgomery County Lands Trust, "how by using the trail, you can save on your medical bills."

ECONOMIC ACTIVITY

Preserved open space has both costs and benefits.

And sometimes they are both.

For example, it costs $359.8 million to maintain open space in the three counties - costs that are shared by federal, state, county and municipal taxpayers as well as the fees charged to users.

But those costs are also salaries and products, nearly all of which are recirculated locally into the economy - in this case, the $216.4 million in just the salaries of the 4,867 people employed in that work in Chester, Delaware and Montgomery counties.

When the money from tourism revenues and salaries (33 percent of activity); agriculture revenues and salaries (36 percent of economic activity) and the $16.6 million in state and local tax revenues is added to those benefits, the balance tips in favor of the plus side of the ledger, the study found.

The Schuylkill River Trail study found that 78 percent of those who responded to the survey said they had purchased bikes or biking equipment to better enjoy the trail - an average individual expenditure of $406.71.

But there are longer-lasting economic impacts.

Consider, as the study does, the case of Honey Brook Township in Chester County.

With more than 1,100 acres of preserved farmland, Honey Brook holds a high ranking in a county that is ranked second in Pennsylvania and among the top 50 in the nation for preservation of open space.

The rural township of 6,200 people is located in a place where nearly 70 percent of the properties of 50 acres or more have at least 50 percent agricultural soils rated among the nation's best.

One analysis concluded just the township's 55 dairy farms generate nearly $29.5 million a year in economic activity.

The clustering of large tracts of preserved land supports the needs of a sustainable agricultural operation, which in turn supports related businesses such as livestock supply, seed and the sale and maintenance of farm equipment.

Apparently the local residents understand the impact and value the result.

In 2005, Honey Brook voters raised their own earned income tax to raise the money to preserve these large farm tracts and since 2006, have allocated nearly $4.5 million toward land preservation.

(East Coventry voters followed in those footsteps in November when, by a margin of 139 votes, they too imposed an additional earned income tax for similar purposes. In fact, according to the Trust for Public Land, the nation saw 35 proposals for conservation funding on the ballot this year and 28 of them were approved - an approval rate of 80 percent, just shy of 2009's 81 percent approval rating at the ballot box.)

PROPERTY VALUES

Inherent in the Realtor's oft-quoted mantra of "location, location, location," is the idea of a sense of place. The average house listing mentions style, number of bedrooms and bathrooms, school system and, often enough, brief but meaningful citations like - "near park."

It's not for nothing that those words are added, because, as experienced Realtors know, they add value; a value realized when homeowners finally sell what is likely their largest single financial asset - their house.

Well, if you live in the counties surrounding Philadelphia, that house is worth more, even by the smallest increment, because there is likely open space nearby, according to the study.

"Within a one-mile radius, the closer a home is to protected open space, the more value it captures," the report's authors wrote. "If all of the protected open space in the five-county region were to be eliminated, the total value of the housing stock of the five counties of southeastern Pennsylvania would decrease by $16.3 billion."

That added value also adds $240.5 million annually to the revenues from property transfer taxes the study found.

The higher values translate into higher property taxes that generate an additional $228 million per year regionally, the report concluded.

As an example, the report looks at the 2.4-mile Radnor Trail in Delaware County that adds, according to their calculation, $69,139 to the value of homes within a quarter-mile of the trail.

Not only is the trail featured in real estate advertisements, the author's studies noted, but they noticed that people selling their homes along the trail now make sure to have "For Sale" signs facing the trail as well as the street.

The Radnor Trail was used as an example also because the study found that "protected open space generates more value in southeastern Pennsylvania's older, built-up communities. Because there are more homes in close proximity to open space in core cities and developed communities, these planning areas capture more total value than growing suburbs and rural areas. On a per-household basis, however, homes in growing suburbs and rural areas capture more value in dollar terms."

For example, in Chester, Montgomery and Delaware counties, homes immediately adjacent to open space gain $10,000 in value as compared to those a mile or more away.

In the last five, years, the value of properties within walking distance of open space have steadily risen, an average of $876 per year in the three suburban counties.

Flaharty said that's one reason why her organization has been sure to focus a sizeable portion of its resources on urban locations as well as the fields and forests that most come to mind when using the phrase open space.

"We gave out seven Green Futures Awards this year and four of them went to boroughs" - she said indicating they were Trappe, Lansdale, Hatfield and Souderton.

ENVIRONMENTAL SERVICES

Although there are measurable benefits to air quality provided by open space, the bigger bang for the buck comes in the form of a more liquid asset - water.

Whether its water quality, quantity, or flood control, the rule is pretty simple - the bigger the forest or wetland, the bigger the financial benefit.

So perhaps it's no surprise that while it is perhaps best known for the habitats, historic artifacts and vistas it protects, perhaps the biggest cash-in-pocket benefit to be found in water resource protection also comes from the largest unbroken stretch of forest in southeastern Pennsylvania - the 73,000 acres of the Hopewell Big Woods of Berks and Chester counties, according to the study.

Overall, the three county's open spaces provide $28.9 million each year in holding water supply (quantity); $7 million in filtering services (quality) and $20.3 million in flood prevention.

Those spaces also remove pollution from the air that would otherwise cost those three counties $10 million a year, as well as $1.3 million worth of carbon sequestration, by which carbon is removed from the atmosphere and stored in plants and soil.

All together, the study estimates that overall, open space in southeast Pennsylvania prevents the necessity of spending $47 million a year to clean and manage air and water resources.

The Big Woods - 15,000 acres of which around French Creek State Park are protected by a coalition of more than 35 private and public sector organizations - is home to two watersheds and, given its size, is a major asset in that equation.

The study concludes that the value of the services provided by the Big Woods is $16.7 million per year and that its trees are storing $6.7 million worth of carbon.

The report, Flaharty said, "shows that open space is a wise financial investment. Preserving open space should be thoughtfully considered when balancing tight budgets. It's good for the environment, but also great for your waistline and your bottom line."

Her observation is particularly relevant given the report's prediction that by 2035, the population of southeast Pennsylvania will grow by 393,000 people, which would require the consumption of 167,000 acres of open space - an area more than half the size of Montgomery County - if current trends continue.

That means more people requiring the services provided by less open space.

Flaharty said officials should keep that in mind as they consider further development proposals and balance them against open space initiatives.

After all, as the report notes, "money doesn't grow on trees."

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