The Value of Trees to Residential Property

By Clay W. Martin, Robert C. Maggio, and David N. Appel

Austin, TX (March 1, 1989)- The value of the trees derived by the formula method was found to represent 13% of the actual sales price of homes while the value of trees derived by the predictive modeling method represented 19%. There is growing awareness of the valuable contributions made by trees to the urban landscape.

At the forefront is the contribution of trees to residential property value. A great deal of work has been conducted to quantify this contribution using many methods. However, in recent years, the formula and predictive modeling methods have received more attention within the research community.

Two methods for predicting the value trees contribute to residential property value in the Austin, Texas metropolitan area were tested. The formula method, used by professional plantsmen, and the predictive-modeling method, using regression analysis, were used to predict the value of trees on 120 homesites. The value of the homes ranged from $30,000 to $600,000 and represented homes typical of the Austin, Texas area. Trees on all homesites were evaluated with the ISA formula method and given a dollar value. Independent variables representing the house and lot were used in the predictive modeling method to determine the value that the trees contribute to sales price.

The formula method is used by professional plantsmen to estimate the value of individual trees. This method is described in the Valuation of landscape trees, shrubs and other plants and is supported by arborists, nurserymen, landscape contractors, and the courts. This method is the established norm. The predictive modeling method uses regression analysis to predict the dollar value of residential property (dependent variable) with independent variables representing the lot and improvements. This method was used by Morales and Anderson and Cordell using different independent variables. The predictive modeling method, using sales prices of homes and corresponding market characteristics in the analysis, would seem to represent what people are actually paying for trees.

The need to ascertain the value that trees contribute to residential property values becomes even more important when the trees are threatened by disease. Oak wilt, caused by Ceratocystis fagacearum, has become a serious problem in numerous Texas communities throughout a 35 county area. In order to assess the financial impact of this disease and perform cost/benefit analysis or disease control options, an accurate assessment of the contribution made by trees to the value of residential property must be determined.

This assessment is by no means the only requirement for a cost/benefit analysis. Items such as the cost to maintain declining trees and the removal of trees that have been killed by oak wilt are also important, but the dollar value of these and other items have not been documented sufficiently in the Austin area. Therefore, it is the intent of this research to begin the process by quantifying the contribution of trees to the market value of residential property in Austin, Texas using the two evaluation methods.

Related Resources:
Journal of Arboriculture- The Contributory Value of Trees to Residential Property in the Austin, Texas, Metropolitan Area