Multiple approaches to valuation of conservation design and low-impact development features in residential subdivisions

Residents, developers and civic officials are often faced with difficult decisions about appropriate land uses in and around metropolitan boundaries. Urban expansion brings with it the potential for negative environmental impacts, but there are alternatives, such as conservation subdivision design (CSD) or low-impact development (LID), which offer the possibility of mitigating some of these effects at the development site. Many urban planning jurisdictions across the Midwest do not currently have any examples of these designs and lack information to identify public support or barriers to use of these methods. This is a case study examining consumer value for conservation and low-impact design features in one housing market by using four different valuation techniques to estimate residents’ willingness to pay for CSD and LID features in residential subdivisions. A contingent valuation survey of 1804 residents in Ames, IA assessed familiarity with and perceptions of subdivision development and used an ordered value approach to estimate willingness to pay for CSD and LID features. A majority of residents were not familiar with CSD or LID practices. Residents indicated a willingness to pay for most CSD and LID features with the exception of clustered housing. Gender, age, income, familiarity with LID practices, perceptions of attractiveness of features and the perceived effect of CSD and LID features on ease of future home sales were important factors influencing residents’ willingness to pay. A hypothetical referendum measured willingness to pay for tax-funded conservation land purchases and estimated that a property tax of around $50 would be the maximum increase that would pass. Twenty-seven survey respondents participated in a subsequent series of experimental real estate negotiations that used an experimental auction mechanism to estimate willingness to pay for CSD and LID features. Participants indicated that clustered housing (with interspersed preserved forest or open space areas), rain gardens, and neighborhood streams with a forested buffer were the features they were most willing to pay for. Participants were not willing to pay for neighborhood streams without buffers. Finally, a spatial hedonic price model using 2093 homes in Ames, IA was used to estimate the effect of public and private open space on housing values. The model indicated that presence of neighborhood association-owned forest and water features as well as proximity to public parks had significant positive effects on housing prices. However, proximity to a public lake had a negative effect on home values. The four methods used in this study include both stated and revealed preference techniques. Although the relative magnitude of value expressed varied, all methods indicated that residents value CSD and LID subdivision features. Subdivision features that included explicit environmental benefits were also consistently preferred over features that did not. Familiarity with alternative designs was an important factor influencing resident willingness to pay for neighborhood features, and developers and civic officials should consider ways to educate citizens about CSD and LID development techniques to increase interest in these designs.