Downstream Economic Benefits from Storm-Water Management

Abstract

Using benefits transfer methods, this paper assesses the downstream economic consequences of development designs that promote greater on-site water retention. It concludes that on-site retention provides many services that are conceptually distinct but empirically intertwined. Flood mitigation and water quality protection are the most important of these services. For residential properties, the economic value of those services is on the order of 0–5% of market value depending on the difference that retention makes to downstream flood exposure. For water quality improvements, the increases range up to 15% of market value for waterside residences where clarity of the water quality is greatly improved. The increases are much less for improvements that are less visible, properties that are not developed, and properties not adjacent to the watercourse. Our best estimate of total benefits to property owners is 2–5% of property value on average for all properties in the flood plain. The public sector realizes additional benefits through smaller bridges, culverts, and other drainage infrastructure and through increased aquifer recharge. Cities and industries may avoid costly upgrades to waste water treatment facilities if low flows increase. It is difficult to generalize about the economic value of the latter effects.