Baltimore Ecosystem Study Cary Institute of Ecosystem Studies

2012 BES Annual Meeting Presentation and Poster Abstracts

A Valuation of Restored Streams Using Repeat Sales
Maher, Joe
Co-Authors: Charles Towe and Allen Klaiber

Abstract: This study values the "upstream" benefits of stream restorations by examining whether homeowners will pay more for a house near a recently restored stream. We use micro-level data on housing transactions for Baltimore, Montgomery, and Howard County Maryland between 1995 through 2011 and data on stream restoration locations to estimate the value of stream restoration to nearby residents. We employ a repeat sales hedonic technique for homes within a 1000 foot buffer of restored streams, where each home sells twice, once before and once after the stream restoration. We also include a control group of households within 1000 feet of unaffected streams. Our method compares the change in housing prices near stream restorations (treated group) to the change in housing prices near unaffected streams (control group). The control group ensures that the impacts observed in this study are attributed directly to stream restorations, and not due to broader trends in regional housing markets. Our results suggest that housing values increase by 1.5 to 2.5 percent in response to nearby stream restorations. These findings are consistent across all three counties and are robust to definitions of repeated sales using multiple time windows. Preliminary results suggest considerable heterogeneity in benefits associated with stream restoration depending on the ownership-status of the restored site. This study informs policymakers of the potential benefits associated with different types of stream restorations. To date, the benefits from restoration projects have largely been anecdotal and this research will provide some of the first evidence of the values of these projects to residents.