Economic Value of Parks

Quality of life is often cited as a reason for the Bay Area's economic success. As further proof that the environment and the economy are interdependent, a study was recently released by the East Bay Regional Park District (EBRPD) which quantifies the value of many amenities provided by regional parks.

The report, "Quantifying Our Quality of Life", which was prepared for EBRPD by Economic & Planning Systems, measures the benefits provided by the park district to residents of the East Bay and beyond. It seems difficult to put a price on the freedom of walking along a ridgeline trail, the thrill of seeing a bird never seen before, or the quiet pleasure of watching a toddler build sandcastles at the edge of the Bay. These are some of the intangible benefits of our regional parklands. However, amenities have value like other infrastructure, and can be treated the same way in economic analysis, although some are more easily quantifiable than others.

Property values, agricultural production, "user utility" and replacement value of parklands are some of the most easily quantified benefits.

• Property values. The presence of parks and recreational facilities is a benefit to property values throughout the East Bay; views and direct access to trails and open space increase the value of homes directly adjacent to parkland by as much as 30%. Homes within a half-mile of parks increase in value by 5-10%, unless there are negative impacts from park use such as heavy traffic or noise.
• Agricultural production. Many of the park district's 91,000 acres lie adjacent to city boundaries, providing a buffer between private agricultural land and urban areas. In addition, 57,400 acres of district open space are used for grazing, representing about 14% of the total grazing inventory in the East Bay. Although grazing on park acreage has engendered some controversy, it provides income to the district and allows ranchers to continue operations on an economically viable scale. The report makes a conservative estimate of the value to the region of district pasture and range production at $740,000 per year.
• "User utility". The value of park use to the user, termed "user utility", is determined based on costs to the user (fees, permits and travel) compared to what the user would be willing to pay for the experience. The report estimates that after deducting fees and other charges for facility use, EBRPD provides $58 million in user utility value each year, primarily from parks usage. Approximately one-quarter of this is due to use by visitors from outside the two-county District area.
• Replacement value. Replacement value, or what it would cost to recreate the park system starting from scratch, is estimated at $960 million. This is a very conservative estimate, using the average cost of district land purchases over the last decade and factoring in acquisition costs, then applying that cost to the district's total acreage. In fact, if the District had not existed over the past 65 years, it would not actually be possible to create it now in its current form, since much of the land would have been used in other ways and its natural value would have been lost. Thus the existence of the District has a non-quantifiable value as well, a public benefit in the form of an investment which might otherwise have fallen to some other public entity to provide.

There are other types of public benefits from parklands. Land maintained in the natural state helps the region to avoid impacts of development and provides environmental benefits which are harder to quantify.

• Ecosystem services. Although a healthy ecosystem may be difficult to value in monetary terms, benefits of leaving land in the natural state include the presence of trees and other plants which improve air quality, and preservation of wetlands and watersheds which slow flooding and provide habitat for diverse species. Some estimates of the value of these "ecosystem services" can be made by considering the cost of alternatives, such as additional water or waste treatment, flood or erosion control, or stricter air quality regulation.
• "Urban form enhancement". The role of the parks, open space, and wildlife habitat in providing definition to the region's developed areas and preventing sprawl development is another public benefit. Land along the urban edges of the region is expensive and growing more so, but much of it in the East Bay has already been acquired for parklands, at an estimated value of $56 million.
• Public service benefits. These include the health benefits to residents from increased recreational and exercise opportunities, the educational benefits of environmental interpretive programs and facilities, public safety benefits from park police and fire services and wildland management, and transportation benefits from trails connecting homes, businesses and workplaces.

A final set of benefits includes the money spent in the region because of the existence of the park district.

• Park user expenditures. Park users spend about $254 million per year at East Bay retail businesses on goods directly related to park use. This includes durable goods, such as bikes, clothing and footwear, as well as non-durables (food, lodging, gas and equipment rentals). Some of this money represents money which would not be spent in the area without the presence of the parks (net new expenditures). In addition, the expenditures also create a multiplier effect as businesses purchase supplies and employees spend wages. The report estimates that net new expenditures and the multiplier effect add almost $150 million per year to the economy of the East Bay.
• Park district expenditures. The district spends about $80 million each year, including operations, maintenance, and capital expenditures. Net new expenditures, plus the multiplier effect, create a total economic impact of over $18 million in the East Bay each year.

The most difficult benefit to quantify, yet perhaps the most important one, is quality of life. Part of the quality of life in a region can be measured in the same way as the benefits of parks, by looking at property values, the value of recreational experiences, and environmental resources. Part of it is measured by indicators which may indirectly relate to the presence of parks—traffic congestion from urban growth unshaped by open space and greenbelts, air and water quality which is improved because of land preserved in its natural state. "The provision by the District of parks, open space, and trails, and associated recreational and educational opportunities, environmental and cultural preservation, alternative transit modes, and sprawl-limiting characteristics all form part of the strong quality of life in the East Bay", the report concludes, without assigning a monetary value to this benefit.

The district will be challenged in the future, however, by growth and increased requirements for habitat preservation and management. Demographic shifts will bring an older, more ethnically diverse population. At the same time, newcomers will expect the quality of life they first encountered to be maintained, placing pressure on the district to provide new services and expand existing parks and trails. A full understanding of the role the parks play in both the environment and the economy of the region will be important as the district moves ahead to face these challenges.

Copies of the 63-page report "Quantifying Our Quality of Life", or the 24-page executive summary, are available from the EBRPD Public Information Department at 510-544-2200. The report can be downloaded from the EBRPD Website, http://www.ebparks.org