New York is home to countless things that are valued by New Yorkers such as; the theatre, the financial district, unique dining experiences, Central Park, and cultural museums. When it comes to natural systems however, people often have difficulty placing a dollar value on the good. For instance, it is recognized that wetlands are valued for their plethora of biological functions, but how valuable are they in economic terms? Does having a wetland on your property increase or decrease the value of your property? What other factors contribute to this value? Martin Heintzleman, 2015-2016 Fulbright Scholar at the Institute of the Environment, was able to shed some light on this topic.
Wetlands are known to act like a sponge during times of flood as they mitigate the impacts of flooding by slowing runoff and absorbing excess rainfall. It is predicted that areas close to a wetland will be better protected from flooding compared to those properties without a wetland. In this seminar, I learned that flooding causes just under $3 billion in damage annually in the United States and those who live in a flood zone are required to purchase flood insurance. Waterfront homes with a high risk of flooding also have high property values. These property values can be a factor of many variables that can be estimated using the hedonic price model. This model is a way to estimate property value as a function of a variety of characteristics such as the structural characteristics of the home on the property, whether the property is in a rural or urban area or the condition of the property.
Wetlands and Property Values
As the seminar continued, I learned how Dr. Heintzleman used GIS data and FEMA flood risk maps to explore if the presence of wetlands reduced the negative effects of flooding within a flood prone area. The study looked at four different flooding events in five counties between the years of 2005-2011 in the Hudson River Valley region in New York State. The findings indicated that wetlands are important in reducing the negative impacts of flooding and are reflected in property values in urban areas, but are valued less in rural regions. Additionally, the researchers concluded that a large number of other unobservable factors can affect property values. Although there is no concrete data that proves wetlands impact property values, riparian wetlands are valued by homeowners, especially after floods.
I left the presentation with a better understanding of the significance of wetlands in reducing the damage of severe floods on properties. Conserving wetlands and other programs that promote the restoration of wetlands are extremely important. If flooding events are to become more frequent and severe in the future, these wetlands have the potential to reduce the burden of damage costs.
- Hillary MacDougall graduated from McMaster University with an H.B.Sc. in Environmental Science and a minor in Business. She is currently in the two year thesis stream of the M.Sc program with a focus on environmental learning in an organization.