Investments in greening and in vacant land management can increase property values by as much as 30 percent.

This fact is reported in "The Determinants of Neighborhood Transformation in Philadelphia - Identification and Analysis," a study undertaken by the Wharton School of the University of Pennsylvania's Real Estate Department with support from the William Penn Foundation to look at revitalization strategies and their impact on neighborhoods.

The author of the study, Susan M. Wachter, Richard B. Worley Professor of Financial Management; Professor of Real Estate, Finance and City and Regional Planning at the Wharton School, says the study looks at the entire city, and it is anticipated that the findings will be applicable to other cities throughout the United States.

"For the first time, utilizing new technology that included the satellite Geographic Information System, spatial regression models, and econometrics, we were able to measure the steady impact of greening," says Professor Wachter. "Philadelphia is at the forefront of using place based policies to transform cities from decline to vibrant health."

The first report released by Wharton this month focused on the Kensington area of Philadelphia. Three key findings were noted in this preliminary report:

-- Neighborhood blocks with higher concentrations of unmanaged vacant lots displayed lower house prices.

-- Tree plantings showed a significantly positive effect on housing prices - increasing value close to nine percent (this equates to about a $3,400 premium on the standard).

-- There is a 64 percent rise in housing prices for neighbors of vacant lots that have been cleaned and greened. On the standard house, this would amount to a $24,000 increase.

The Kensington area was the site of a vacant land management program coordinated and managed by The Pennsylvania Horticultural Society's Philadelphia Green in partnership with the New Kensington Community Development Corporation (NKCDC). The community-based land management system developed by Philadelphia Green, and funded by the city's Office of Housing and Community Development was designed to address the large number of derelict vacant lots in the area. The goal was to improve the appearance and curb appeal of the community and to help stem population loss, attract new residents, and encourage reinvestment.

The impact of these increases will contribute to the fiscal health of the City. "The transformation of Philadelphia's neighborhoods is not just about bricks and mortar," says Patricia Smith, Director of the City of Philadelphia's Neighborhood Transformation Initiative. "We believe that cleaning up vacant lots and investing in quality green spaces is one of the most effective ways to build thriving communities, enhance the quality of life and make Philadelphia one of the most desirable places to live, work, and do business. That's why the city has partnered with PHS and is investing in the Green City Strategy."

The Wharton School will release additional results in January 2005 that indicate the benefits of revitalization efforts with regards to public safety, schools, and business corridor investment.

NewsClip: Study Shows Property Value Gain from Green

12/10/2004