Subdivision Infrastructure Affecting Storm Water Runoff and Residential Property Values

Abstract

In many areas of the country, urban storm water runoff is a growing water quality problem. To improve storm water programs, regulatory officials are now placing greater emphasis on reducing the volume of runoff. Called green infrastructure or low-impact development, storm water control is increasingly focused on reducing the amount of urban impervious land cover and using vegetative conveyance systems and infiltration areas to reduce negative environmental impacts. While many green infrastructure practices reduce capital infrastructure costs, less is known about the opportunity costs and pecuniary benefits to developers from implementation of green infrastructure to reduce storm water effects. This paper presents a hedonic property-value model of residential property sale prices regressed on property and location characteristics, which include differing infrastructure design features that affect storm water runoff (street widths, cul-de-sacs, curb-and-gutters). The data include 1,360 single-family property transactions in Hanover County, Virginia that occurred in 1995 and 1996. Results suggest that prohibiting curb-and-gutters and cul-de-sacs would impose an opportunity cost on developers; buyers are willing to pay 1.3 and 7.8% property-price premiums for homes located on a street with a cul-de-sac and curb-and-gutters, respectively. Constructing narrower streets would provide a pecuniary benefit to developers because people would pay approximately 3.5% more for these properties.