THE ECONOMIC EFFECTS OF STORMWATER BEST MANAGEMENT PRACTICES (BMPS) ON HOUSING SALE PRICES IN WASHINGTON, D.C.

Abstract

The aim of this dissertation seeks to investigate the economic effects of stormwater best management practices (BMPs) on housing sale prices in Washington, D.C. Stormwater best management practices (BMPs) were designed to address flooding and water quality issues that impact environmental, social, and economic effects. As awareness of the BMPs increased, municipalities and local governments developed regulations to require developers and property owners to implement BMPs. Effective stormwater management was not merely a matter of environmental responsibility but may create significant economic incentives. To study the economic effects of BMPs on housing prices, this study reviewed 32 years of research articles answering following questions: 1) How do BMPs affect housing prices? 2) What kinds of stormwater BMPs have been studied that affect housing prices? This review study used the PRISMA approach to conduct an in-depth systematic review. The search parameters included articles written in English and published between January 1990 and September 2022 using Google Scholar, ProQuest, and EBSCO host search engines. Initially, more than 20,000 studies were identified. Ultimately, 23 Studies were selected for inclusion with specific search terms. The results of this study show that many BMPs (trees, detention basins, retention basins, parks, etc.) use various measurements (e.g., percent coverages, proximity) to estimate the economic impacts on housing prices. Our robust findings address that BMPs have more substantially positive (82.6%) than negative effects (52.2%) on housing prices. Trees and parks had an impact that is more positive on housing prices than detention and retention basins. While studies on the economic value of BMPs were limited, literature found that the capitalization of real estate can be affected by nearby stormwater BMPs using the hedonic pricing method. To extend the economic effects of BMPs on housing sale prices in Washington, D.C., this study addresses research questions: Do stormwater BMPs positively impact housing sale prices? How do proximity and number or structural BMPs affect the housing sale prices? This study used the hedonic pricing method by applying hierarchical regression models to determine whether a set of independent variables significantly improved the models. The primary findings indicate that BMPs have positive, negative, or no effects on housing sale prices. Proximity to BMPs inside of parks increased housing sale prices in all buffers. In contrast, proximity to BMPs outside of parks and impervious roads decreased housing sale prices in all buffers. Percent tree canopy coverage negatively linked to a 50 m buffer and no relationship with other buffers on housing sale prices. This study implies that BMPs impact housing prices and can be improved by landscape architects, policy makers, and stakeholders. To compare the economic effects of BMPs on housing sale prices in high-income and low-income wards in Washington, D.C., this study addresses how environmental, structural, neighborhood and locational variables hierarchically affect housing sale prices in high-income and low-income wards. The robust findings of this study conclude that environmental variables (e.g., proximity of houses to parks with BMPs, house to BMPs inside of parks, and house to BMPs outside of parks, impervious surfaces, and impervious roads) can be attractive factors for purchasing homes, according to model 1 and model 3 in high-income ward. In contrast, there was no evidence of the economic effects of environmental variables on housing sale prices in low-income ward. All structural variables in the high-income ward were statistically significant on housing sale prices. In contrast, limited structural variables in low-income ward were statistically significant on housing sale prices. Several locational and neighborhood variables (e.g., population density, unemployment rate, and poverty rate) in the high-income ward were statistically significant on housing sale prices. These results contribute to property owners considering how environmental, structural and neighborhood and locational variables could be beneficial between high-income and low-income communities. However, such disproportionate economic effects of factors concern remain. The intervention of green gentrification should be considered between local government and disparate community groups by supporting financial incentives for homeownership or having an equity project for existing residents to improve their communities. This could change the neighborhood composition which is associated with the availability of stormwater BMPs as well as the involvement of these efforts from landscape architects, urban planners, stakeholders, and government is essential to accelerate the strategies to fair distribution and effects of stormwater BMPs on housing sale prices.