The Value of Public and Private Green Spaces Under Water Restrictions

Landscape and Urban Planning
2010 95(4)


Numerous studies have been published that consider the relationship between open spaces and property values. In this study, we examine the potential impact of water restrictions on the value of different types of green space. Restrictions on the use of water on outdoor areas are a popular means for governments or utilities to limit water use in urban areas. In this paper, a hedonic pricing model is used to analyse the effects that increasingly severe water restrictions might have on the perceived value of public and private green spaces in Adelaide, South Australia. A hedonic pricing model is estimated that contains housing characteristics, neighbourhood amenities, fixed effects to control for unobserved neighbourhood characteristics and temporal control variables for inflation. The findings suggest that water restrictions are not having a significant impact of the value of outdoor spaces on private properties. There are indications that substitutions may be occurring with the proximity to playgrounds, which are watered more regularly, becoming significant with increasing severity of water restrictions. However, close proximity to large public parks with trails for walking which remain in a natural state throughout the year (brown and dry in summer) is negatively correlated with the selling price regardless of water restrictions. This suggests that households in this market may be using some public green spaces for recreation in lieu of private areas but not all public open spaces are equal. This has implications for urban and landscape planners, especially given the likelihood of ongoing water restriction under climate change.