To a large extent, residents’ differential access to urban amenities determines the form of a city. Amenity access, or the lack thereof, plays a major role in determining prices in housing markets throughout cities, creating zones of differential economic welfare as residents choose to locate as close to important amenities as their means will allow. It is unclear to what degree, however, the presence or absence of certain amenities generates demand for housing. In this paper, I assess the amenity value of urban tree canopy and its relationship to the housing market of Portland, Oregon.
This analysis takes two forms. First, tree canopy can be viewed as a price determinant in the housing market independent of the characteristics of the residents of those houses. This is the usual application of hedonic regression. However, one can also measure residents’ demand for tree canopy based on those characteristics, and construct a willingness-to-pay (WTP) curve for tree canopy. I apply the logic of these forms in two stages, where I first measure the implicit price of tree canopy, then use that price to estimate WTP.
This leads to my central question: What is the private demand for urban tree canopy throughout Portland, OR, and how would welfare vary between neighborhoods in response to a prospective increase in canopy cover? I will approach the first part of this question using a hedonic regression of property values, quantities of tree canopy, and housing characteristics, followed by a willingness-to-pay estimation based on residential demographics. I will then use the WTP estimation to calculate welfare increases based on prospective increases in tree canopy.
In addition to the economic implications of this question, this is also particularly relevant within the framework of urban environmental justice and considerations of equity in access to urban amenities. Urban planners in growing cities face the issue of making quality-of-life amenities accessible to residents in neighborhoods with a lower cost-of-living, prompting a discussion of what amenities can and should be provided to all residents of a city. Although this paper does not adopt an ethical framework to guide this discussion, it does provide insight into the distribution of urban canopy throughout neighborhoods with varied housing characteristics, as well as local valuation of urban canopy as an amenity. This should prove a useful tool in advancing that discussion.