Rethinking Urban Open-Space Distribution for Municipal Financial Sustainability

Abstract

Municipalities across the world are constantly striving to improve their financial sustainability using two different channels, namely, increasing revenue and reviewing the efficiency of the way they provide services to the public. Generally, a balance between these strategies often receives the support of the population insofar as that does not lead to a reduction of quality of life. In this respect, (urban) open spaces, which nowadays constitute an important element of healthy cities, are sometimes designed for optimal maintenance cost rather than quality of life. For instance, in the case of the City of Edmonton, Canada, although (approximately) 10% of the Neighborhood Structure Plan (NSP) is required to be used as parks, residents do not equally reap the benefit of this green space. In fact, the municipality encourages land developers to keep this open space in the form of large areas (usually one or two), arguing that a scattered design will increase maintenance costs. In an effort to answer this question, it is shown that even though maintenance costs of neighborhood parks increase because of a scattered design, the proximity of additional homes to open green spaces increases their values, and hence their property taxes, which cumulatively exceed the maintenance cost differential. To implement the model underlying this contribution, two methodological concepts are combined: (1) the spatial interaction index; and (2) the hedonic pricing analysis.