The Pennsylvania Horticultural Society (PHS) is a nonprofit membership organization founded in 1827. PHS produces the Philadelphia Flower Show and sponsors events, educational activities, and publications for novice gardeners, experienced horticulturists, and flower lovers of all ages. PHS’s urban greening program, Philadelphia Green, works with community groups, residents, city agencies, nonprofits, and other partners to plan and implement greening projects throughout the city. Proceeds from the Flower Show, along with funding from foundations, corporations, government agencies, and individuals, help support its projects. To support the work of PHS and Philadelphia Green, please call 215-988-8800 or make a secure contribution online at www.pennsylvaniahorticulturalsociety.org.
FALL 2006
neighborhood corridors more welcoming places, and developing a system to attract and retain businesses. Randy Belin is senior program officer for the Philadelphia office of the Local Initiatives Support Corporation (LISC), which provides capital and technical expertise to community-based development organizations. “For a number of years, LISC has been working to understand the relationship between commercial corridors and the residential communities that feed into them,” Belin says. “This study is very important because it confirms our belief that strong commercial corridors help support strong neighborhoods. It’s really the synergy between the two that creates vibrant communities.” During the past 10 years, business improvement districts have proliferated throughout Philadelphia and most incorporate tree-planting and other greening projects into their programs. The Center City District (CCD), the city’s oldest BID, has been operating in downtown Philadelphia since 1991. The organization has invested more than $1 million in new street trees and spends about $150,000 per year on tree maintenance. “The Wharton study clearly validates this large investment,” says Nancy Goldenberg, CCD’s vice president of planning. The research is also timely for Philadelphia because the city government is currently leading an effort, along with PHS and other partner organizations, to create an open space plan for the entire city. “A study like this helps us craft a stronger argument when we promote the value of the city’s green infrastructure,” says Philadelphia Green senior director Mike Groman. “For example, the open space plan must incorporate a long-term strategy to maintain the city’s parks, civic spaces, and street trees, and now we can show that that expenditure will offer a payback.” More broadly, Public Investment Strategies bolsters the argument for integrating greening into comprehensive revitalization efforts and demonstrates the dramatic, immediate impact of visible improvements. It provides concrete evidence that can be used to influence policy discussions and guide decision-making on neighborhood investments in Philadelphia and nationwide. 1 Crompton, John L., The Impact of Parks and Open Space on Property Values and the Property Tax Base, National Recreation and Park Association, 2000.
© 2006 PENNSYLVANIA HORTICULTURAL SOCIETY JANE CARROLL, EDITOR Photographs: Margaret Funderburg, Eileen Gallagher, Julie Snell, Linda Walczak
For more information, visit: www.pennsylvaniahorticulturalsociety.org and click on “Philadelphia Green.”
THE PENNSYLVANIA HORTICULTURAL SOCIETY
STRATEGY for a GREEN CITY
a publication of
The Pennsylvania Horticultural Society 100 North 20th Street, 5th floor Philadelphia, Pennsylvania 19103
STRATEGY for a GREEN CITY
Non-profit Org. U.S. Postage PAID Philadelphia, PA Permit No. 2666
100 North 20th Street, 5th floor Philadelphia, Pennsylvania 19103 Phone: 215-988-8800 Fax: 215-988-8810 email: pginfo@pennhort.org
FALL 2006
GREENING:
A Wise Investment STUDY CONFIRMS THE VALUE OF GREENING
M
ore and more, researchers are finding innovative ways to quantify the economic benefits of greening, and greening proponents can use this data to promote the value of greening as a crucial tool in urban revitalization. In 2005, researchers at the Wharton School of the University of Pennsylvania released a report on the impact of greening on real estate values in Philadelphia’s New Kensington neighborhood. They chose New Kensington because it was the site of an intensive community greening program, which was managed by the Pennsylvania Horticultural Society’s Philadelphia Green program in partnership with the New Kensington Community Development Corporation and funded by the city’s Office of Housing and Community Development. Conducted by Dr. Susan M. Wachter, the study used new economic models to demonstrate that homes in the neighborhood rose in value as a result of tree plantings, park improvements, and vacant lot cleanup. To learn whether the same effect could be documented in other parts of Philadelphia, Wachter and colleague Kevin C. Gillen embarked on another groundbreaking project looking at the entire city. This time, they examined the economic impact on property values of a range of place-based public investments, including commercial corridor improvements; vacant land management; neighborhood greening strategies such as green streetscapes; “business improvement districts;” and quality-of-life interventions like public safety, school improvements, and access to transit.
METHODOLOGY: SEEING THE BIG PICTURE
TAKING THE RESEARCH CITYWIDE Funded by the William Penn Foundation, Public Investment Strategies: How They Matter for Neighborhoods in Philadelphia Identification and Analysis (2006) offers further proof of the benefits of greening, revealing significant increases in property values citywide where greening has occurred. “Overall, our results imply large-scale positive impacts and potentially high returns from investment in public spaces,” Wachter says. Key findings of the study include: • Improvements to streetscapes (street tree plantings, container plantings, small pocket parks, parking lot screens and median plantings) can add an additional 28 percent to the value of a nearby home.
“A study like
• Neighborhood commercial corridors in “excellent” condition are correlated with a 23 percent net rise in value for homes within 1/4 mile of the corridor and an 11 percent net rise for those within 1/2 mile.
this helps us craft a stronger
• Homes located in “business improvement districts” (BIDs)—neighborhood-based organizations that provide special services like trash removal and greening, such as University City District and Frankford Special Services District—are valued 30 percent higher than comparable homes not located in BIDs.
argument when we promote the value of
• While proximity to a neglected vacant lot subtracts 20 percent from the value of an adjacent home, adjacency to a stabilized lot—one that has been improved through cleaning and greening—increases the home’s value by as much as 17 percent.
the city’s green infrastructure.” —Mike Groman, Senior Director, Philadelphia Green
Above: Philadelphia Green redesigned a traffic triangle along Baltimore Avenue in University City.
Right and far right: Vacant lot at Berks & Darien Streets before and after cleanup. Cleaning and greening lots helps boost property values.
Before
After
While the benefits of public investment seem intuitive, many previous studies fail to find empirical evidence of neighborhood effects. For Public Investment Strategies, Wachter and her team created a unique dataset that merges home sales data for 120,000 properties and 200,000 sales events in Philadelphia for the period 1980 to 2004 with information on various “place-based” public investments, as well as a spatial database developed by the Wharton School’s Geographical Information Systems laboratory. The integrated database made it possible to measure the direct impact of public investments on “neighborhood value,” identified by how much people are willing to pay to live in neighborhoods. The researchers used “hedonic regression” techniques to control for other variables that affect property values, such as the physical characteristics of specific houses, the location and density of the surrounding neighborhood, and the time of sale. In the case of tree plantings, streetscapes, and other greening projects performed by its Philadelphia Green program, PHS was able to provide the exact location, date, and type of improvements, allowing the researchers to accurately measure the effects on property values. (Information on schools and public safety was not as precise and is the subject of ongoing research.) The study also looked at the effects on home values of separate investment strategies. Wachter and Gillen write: “For example, consider a house that does not border a park, but is near a new tree planting in a neighborhood that has been recently streetscaped and is adjacent to a greened and stabilized lot. The total increase in this dwelling value as a result of these last three events could be dramatic.” This suggests that integrated strategies—improving commercial corridors, streetscapes, parks, and cleaning vacant lots at the same time—have the potential for the greatest impact on struggling neighborhoods. “This is an exciting finding because it is what PHS has been promoting for the past several years through its ‘Green City Strategy,’” says PHS executive vice president J. Blaine Bonham, Jr. “We believe that this kind of comprehensive approach to improving the city’s green infrastructure can have enormous benefits.”
PUTTING THE NUMBERS TO WORK
Wachter says the study shows that investments in green space can boost the economy of the entire city, because as the market value of a “tax ratable” property rises, higher property-tax revenues flow into city coffers. At the same time, green spaces save the city money because they cost less to create and maintain than do residential developments, which require costly infrastructure and city services, according to Texas A&M University professor John Crompton.1 The evidence of positive effects of well-maintained commercial corridors helps validate recent work in Philadelphia. Through its contract with the city’s Neighborhood Transformation Initiative (NTI), PHS helped renovate streetscapes in five such corridors in 2004. More recently, NTI has launched the ReStore Philadelphia Corridors program, a strategy to revitalize commercial strips through planning and data analysis, leveraging community resources, making continued on next page
STRATEGY for a GREEN CITY
Right: Street trees line the perimeter of Campbell Square Park in Fishtown. Below: Landscaped traffic islands are part of corridor improvements along Ogontz Avenue.
METHODOLOGY: SEEING THE BIG PICTURE
TAKING THE RESEARCH CITYWIDE Funded by the William Penn Foundation, Public Investment Strategies: How They Matter for Neighborhoods in Philadelphia Identification and Analysis (2006) offers further proof of the benefits of greening, revealing significant increases in property values citywide where greening has occurred. “Overall, our results imply large-scale positive impacts and potentially high returns from investment in public spaces,” Wachter says. Key findings of the study include: • Improvements to streetscapes (street tree plantings, container plantings, small pocket parks, parking lot screens and median plantings) can add an additional 28 percent to the value of a nearby home.
“A study like
• Neighborhood commercial corridors in “excellent” condition are correlated with a 23 percent net rise in value for homes within 1/4 mile of the corridor and an 11 percent net rise for those within 1/2 mile.
this helps us craft a stronger
• Homes located in “business improvement districts” (BIDs)—neighborhood-based organizations that provide special services like trash removal and greening, such as University City District and Frankford Special Services District—are valued 30 percent higher than comparable homes not located in BIDs.
argument when we promote the value of
• While proximity to a neglected vacant lot subtracts 20 percent from the value of an adjacent home, adjacency to a stabilized lot—one that has been improved through cleaning and greening—increases the home’s value by as much as 17 percent.
the city’s green infrastructure.” —Mike Groman, Senior Director, Philadelphia Green
Above: Philadelphia Green redesigned a traffic triangle along Baltimore Avenue in University City.
Right and far right: Vacant lot at Berks & Darien Streets before and after cleanup. Cleaning and greening lots helps boost property values.
Before
After
While the benefits of public investment seem intuitive, many previous studies fail to find empirical evidence of neighborhood effects. For Public Investment Strategies, Wachter and her team created a unique dataset that merges home sales data for 120,000 properties and 200,000 sales events in Philadelphia for the period 1980 to 2004 with information on various “place-based” public investments, as well as a spatial database developed by the Wharton School’s Geographical Information Systems laboratory. The integrated database made it possible to measure the direct impact of public investments on “neighborhood value,” identified by how much people are willing to pay to live in neighborhoods. The researchers used “hedonic regression” techniques to control for other variables that affect property values, such as the physical characteristics of specific houses, the location and density of the surrounding neighborhood, and the time of sale. In the case of tree plantings, streetscapes, and other greening projects performed by its Philadelphia Green program, PHS was able to provide the exact location, date, and type of improvements, allowing the researchers to accurately measure the effects on property values. (Information on schools and public safety was not as precise and is the subject of ongoing research.) The study also looked at the effects on home values of separate investment strategies. Wachter and Gillen write: “For example, consider a house that does not border a park, but is near a new tree planting in a neighborhood that has been recently streetscaped and is adjacent to a greened and stabilized lot. The total increase in this dwelling value as a result of these last three events could be dramatic.” This suggests that integrated strategies—improving commercial corridors, streetscapes, parks, and cleaning vacant lots at the same time—have the potential for the greatest impact on struggling neighborhoods. “This is an exciting finding because it is what PHS has been promoting for the past several years through its ‘Green City Strategy,’” says PHS executive vice president J. Blaine Bonham, Jr. “We believe that this kind of comprehensive approach to improving the city’s green infrastructure can have enormous benefits.”
PUTTING THE NUMBERS TO WORK
Wachter says the study shows that investments in green space can boost the economy of the entire city, because as the market value of a “tax ratable” property rises, higher property-tax revenues flow into city coffers. At the same time, green spaces save the city money because they cost less to create and maintain than do residential developments, which require costly infrastructure and city services, according to Texas A&M University professor John Crompton.1 The evidence of positive effects of well-maintained commercial corridors helps validate recent work in Philadelphia. Through its contract with the city’s Neighborhood Transformation Initiative (NTI), PHS helped renovate streetscapes in five such corridors in 2004. More recently, NTI has launched the ReStore Philadelphia Corridors program, a strategy to revitalize commercial strips through planning and data analysis, leveraging community resources, making continued on next page
STRATEGY for a GREEN CITY
Right: Street trees line the perimeter of Campbell Square Park in Fishtown. Below: Landscaped traffic islands are part of corridor improvements along Ogontz Avenue.
The Pennsylvania Horticultural Society (PHS) is a nonprofit membership organization founded in 1827. PHS produces the Philadelphia Flower Show and sponsors events, educational activities, and publications for novice gardeners, experienced horticulturists, and flower lovers of all ages. PHS’s urban greening program, Philadelphia Green, works with community groups, residents, city agencies, nonprofits, and other partners to plan and implement greening projects throughout the city. Proceeds from the Flower Show, along with funding from foundations, corporations, government agencies, and individuals, help support its projects. To support the work of PHS and Philadelphia Green, please call 215-988-8800 or make a secure contribution online at www.pennsylvaniahorticulturalsociety.org.
FALL 2006
neighborhood corridors more welcoming places, and developing a system to attract and retain businesses. Randy Belin is senior program officer for the Philadelphia office of the Local Initiatives Support Corporation (LISC), which provides capital and technical expertise to community-based development organizations. “For a number of years, LISC has been working to understand the relationship between commercial corridors and the residential communities that feed into them,” Belin says. “This study is very important because it confirms our belief that strong commercial corridors help support strong neighborhoods. It’s really the synergy between the two that creates vibrant communities.” During the past 10 years, business improvement districts have proliferated throughout Philadelphia and most incorporate tree-planting and other greening projects into their programs. The Center City District (CCD), the city’s oldest BID, has been operating in downtown Philadelphia since 1991. The organization has invested more than $1 million in new street trees and spends about $150,000 per year on tree maintenance. “The Wharton study clearly validates this large investment,” says Nancy Goldenberg, CCD’s vice president of planning. The research is also timely for Philadelphia because the city government is currently leading an effort, along with PHS and other partner organizations, to create an open space plan for the entire city. “A study like this helps us craft a stronger argument when we promote the value of the city’s green infrastructure,” says Philadelphia Green senior director Mike Groman. “For example, the open space plan must incorporate a long-term strategy to maintain the city’s parks, civic spaces, and street trees, and now we can show that that expenditure will offer a payback.” More broadly, Public Investment Strategies bolsters the argument for integrating greening into comprehensive revitalization efforts and demonstrates the dramatic, immediate impact of visible improvements. It provides concrete evidence that can be used to influence policy discussions and guide decision-making on neighborhood investments in Philadelphia and nationwide. 1 Crompton, John L., The Impact of Parks and Open Space on Property Values and the Property Tax Base, National Recreation and Park Association, 2000.
© 2006 PENNSYLVANIA HORTICULTURAL SOCIETY JANE CARROLL, EDITOR Photographs: Margaret Funderburg, Eileen Gallagher, Julie Snell, Linda Walczak
For more information, visit: www.pennsylvaniahorticulturalsociety.org and click on “Philadelphia Green.”
THE PENNSYLVANIA HORTICULTURAL SOCIETY
STRATEGY for a GREEN CITY
a publication of
The Pennsylvania Horticultural Society 100 North 20th Street, 5th floor Philadelphia, Pennsylvania 19103
STRATEGY for a GREEN CITY
Non-profit Org. U.S. Postage PAID Philadelphia, PA Permit No. 2666
100 North 20th Street, 5th floor Philadelphia, Pennsylvania 19103 Phone: 215-988-8800 Fax: 215-988-8810 email: pginfo@pennhort.org
FALL 2006
GREENING:
A Wise Investment STUDY CONFIRMS THE VALUE OF GREENING
M
ore and more, researchers are finding innovative ways to quantify the economic benefits of greening, and greening proponents can use this data to promote the value of greening as a crucial tool in urban revitalization. In 2005, researchers at the Wharton School of the University of Pennsylvania released a report on the impact of greening on real estate values in Philadelphia’s New Kensington neighborhood. They chose New Kensington because it was the site of an intensive community greening program, which was managed by the Pennsylvania Horticultural Society’s Philadelphia Green program in partnership with the New Kensington Community Development Corporation and funded by the city’s Office of Housing and Community Development. Conducted by Dr. Susan M. Wachter, the study used new economic models to demonstrate that homes in the neighborhood rose in value as a result of tree plantings, park improvements, and vacant lot cleanup. To learn whether the same effect could be documented in other parts of Philadelphia, Wachter and colleague Kevin C. Gillen embarked on another groundbreaking project looking at the entire city. This time, they examined the economic impact on property values of a range of place-based public investments, including commercial corridor improvements; vacant land management; neighborhood greening strategies such as green streetscapes; “business improvement districts;” and quality-of-life interventions like public safety, school improvements, and access to transit.