The Impact of Parks on Property Values: A Review of the Empirical Evidence

The real estate market consistently demonstrates that many people are willing to pay a larger amount for a property located close to a park than for a house that does not offer this amenity. The higher value of these residences means that their owners pay higher property taxes. In many instances, if the incremental amount of taxes paid by each property which is attributable to the presence of a nearby park is aggregated, it is sufficient to pay the annual debt charges required to retire the bonds used to acquire and develop the park. This process of capitalization of park land into the value of nearby properties is termed the “proximate principle.”Results of approximately 30 studies which have empirically investigated the extent and legitimacy of the proximate principle are reported, starting with Frederick Law Olmsted's study of the impact of New York's Central Park. Only five studies were not supportive of the proximate principle and analysis of them suggested these atypical results may be attributable to methodological deficiencies.As a point of departure, the studies' results suggest that a positive impact of 20% on property values abutting or fronting a passive park area is a reasonable starting point. If it is a heavily used park catering to large numbers of active recreation users, then the proximate value increment may be minimal on abutting properties, but may reach 10% on properties two or three blocks away.