The effect of open space maintenance spending on house prices

Abstract

AbstractWe study the effect on housing values of cutting funding for the maintenance of local parks and recreational areas. It is the first study we find on house prices and park maintenance spending, and only the second open space study we find that uses regression discontinuity. We study tax votes with exogenous timing for renewing current expense spending on parks and recreation, adding to the vibrant literature on house price capitalization of environmental amenities. We find that otherwise similar communities that barely vote to cut taxes suffer an 11% drop in house prices, compared to communities that barely vote to renew tax funding. The capitalization discount grows to 13% and 16% in later periods. Voting against spending saves $70 a year for a typical house but cuts house values by over $30,000. We find stronger effects for large tax levies and more expensive houses.