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Pocket parks are parks that are under 0.2 acres in size. (National Recreation and Park Association, n.d.) They are the smallest size of park, often located in commercial areas or in between houses in residential areas. There is research support to the idea that pocket parks can raise property values (Mwende, 2018), in addition to improving quality of life. (Charles, et. al., 2011)
My hypothesis is that if the city buys a vacant property in town and turns it into a pocket park, the raised property tax will pay for the cost of the park within 5 years, demonstrating its value.
The proposed location of the park is 609 N Jefferson Street Sigourney, IA 52591 (MLS number 35016521, parcel number SGCOS-098000). The lot is 0.2 acres, and the estimated property tax is currently $132 per year.
You can see the Beacon data here. Compared to the photo listed on Beacon, I was pleasantly surprised to see the space looking very well kept and inviting.
Sigourney Property Tax Data
My initial plan for this project was to scrape the property tax available from from Beacon and use it to build a model of the impact of the number of bedrooms, distance from the nearest park, home age, sale price, and other details to get a detailed sense of the impact, based on the Mwende study (see below.)
Unfortunately that website makes clear in its Terms of Service that any use of screen-scraping or data mining is strictly prohibited. Although I was able to identify about 700 parcels in Sigourney using their website it would be time prohibitive to collect data on all 700 properties manually.
Model of the Economic Impact in Madison, Wisconsin
In the meantime, we can use some data from a study that did the type of analysis I would like to do, in order to make some educated guesses about what will happen in Sigourney. The study by Mbaka Mwende demonstrated the impact of pocket parks on property values using data in Madison, WI.
For example, the mean distance from a park was 5.9163 miles and the average home price was $257,534. Moving 1 additional mile away from a park reduced a home’s value by 2.49%. All else being equal, being located close to a larger park (over 1 acre) will add 0.45% to a home’s value compared to being located close to a smaller park.
Applying the Model in Sigourney
What we’ll do in order to see the influence of the park is to examine the impact of the increased value on the surrounding properties to see if the pocket park would make a difference that might pay for itself.
Sigourney is a small town – residential areas stretch about 1 mile north-to-south and 1.5 miles west-to-east. For this analysis I chose an even smaller area, 0.035 sq mi near the park. For Sigourney residents, this area contains Ringgold Street to the south, N Jefferson Street to the west, and two unnamed roads to the north and east. Ah, the joys of small town life.
First, I wrote down the parcel numbers of each of the properties and then removed any that were zoned commercial or agriculture (as I don’t have data that parks improve the value of these properties.) Next, I collected the net property taxes due in 2019 (assessed in 2018.)
I noted several lots did not have houses on them. It is expected that a property located close to a park would still be more valuable than one that is not so I won’t exclude these lots.
When we’re finished, we have 45 properties, with values between $1,890 (for the land-only) or $23,830 (for the residential properties) up to $142,900. Property due ranges from $42 up to $2490 per year, with a couple properties owing zero tax.
In the model proposed by Mwende, moving 1 mile away from a park reduced your home’s value by 2.49%. We can assume then, that adding a park within 1 mile will lead to an increase in a home’s value by 2.49%.
In order to see the impact this will have we can compare the ratio of net taxes to the ratio of the property value. Then add 2.49% to each property’s price, and see the new net taxes.
For example, the first property in the list, parcel SGCOS-087100 is worth $1,890. Dividing the net taxes due ($42) by this number equals 0.0222. This is the ratio of taxes to the property’s value.
Next, we can add 2.49% to the price, increasing it from $1,890 to $1,937 (decimals are omitted here.) The additional $47 is the increase in the home price from the park.
We can then multiply this new price by our tax ratio for a new net taxes estimate of $43.05. The difference between these two numbers is $1.05, the increase in net taxes because of the park.
Let’s run these numbers for the properties in our analysis:
Conclusion and Discussion
We can assume that if home prices would be increased about 2.49% that a park would generate about $1422 in additional property tax within about 0.04 square miles of the park. Over 5 years this would generate about $7,110 in added revenue over the next year.
The property is currently valued at $6,000 and priced at $7,500. The maintenance costs of a park of this size are approximately $2000 per year. (Floyd, et. al., 2015) Because the maintenance costs would be more than the added property tax value this property would not make a good site for a pocket park, even if the land were donated.
This type of analysis, while simplistic at times, is important for municipal governments to do. If you’re not careful about your costs you can spend money on a project that loses you money, or conversely miss out on an opportunity to complete a project that sounds good on paper (a new park for kids!) and makes you money.
Branas, C.C., Cheney, R.A., MacDonald, J.M., Tam, V.W., Jackson, T.D., Ten Have, T.R. A Difference-in-Differences Analysis of Health, Safety, and Greening Vacant Urban Space, American Journal of Epidemiology, 174(11), 1296–1306, doi: https://doi.org/10.1093/aje/kwr273
Floyd, M., Suau, L.J., Layton, R., Maddock, J.E. & Bitsura-Meszaros, K. (2015) Cost Analysis for Improving Park Facilities to Promote Park-based Physical Activity. North Carolina State University. Retrieved on September 11, 2019 from https://content.ces.ncsu.edu/cost-analysis-for-improving-park-facilities-to-promote-park-based-physical-activity
Mwende, M.M. (2018) “The Economic Impact of Pocket Parks on Residential Property values. Case study: Madison-Wisconsin” master’s thesis. University of Wisconsin-Whitewater. Retrieved on September 10, 2019 from The https://minds.wisconsin.edu/bitstream/handle/1793/78964/Thesis_%20Mbaka_Mourine%20%282%29%20%281%29.pdf?sequence=1&isAllowed=y
National Recreation and Park Association. (n.d.) Pocket Parks. Issue Brief. Retrieved on September 11, 2019 from https://www.nrpa.org/contentassets/f768428a39aa4035ae55b2aaff372617/pocket-parks.pdf