Moderating effect of forest cover on the effect of proximity to chemical facilities on property values

Abstract

Numerous studies on housing markets indicate that neighborhood amenities such as trees and open space increase property values while the presence of hazardous facilities, pollution and flooding risks decreases housing prices. However, previous studies have focused on the direct impacts of neighborhood characteristics on housing prices using the Hedonic Price Model (HPM). Potential interactive relationships among neighborhood characteristics have not been clearly tested. This study examines direct impacts of urban forest on property values and indirect impact on the relationship between Toxics Release Inventory (TRI) chemical facilities and tax base property values in Tarrant County, Texas. Distance to hazardous chemical sites and the amount of foliage coverage within neighborhoods are measured using Geographic Information Systems (GIS) and regressed to tax base property values. To test the indirect impact of trees coverage on the relationship between TRI sites and property values, the moderation model is examined with more foliage coverage (MF) parcels and less foliage coverage (LF) parcels. The empirical result of this study confirms the findings of previous studies suggesting negative influences of hazardous facilities, and positive effects from trees on housing prices. Furthermore, this study uncovers that amount of tree coverage within a neighborhood have an indirect impact on housing values. Specifically, trees in neighborhood environments significantly reduce the negative influence of distance to TRI hazardous chemical facilities. Negative influences of TRI hazardous chemical facilities appear not to be significant in many-treed neighborhoods while hazardous chemical facilities show negative influences on housing values in neighborhoods less-covered by trees.