Do Parks Raise Real Estate Prices?

Frederick Law Olmsted, an American landscape architect, once measured real estate prices around the Central Park in New York and found that from 1856 to 1873, there was a $209 million worth effect on real estate prices around it.

More recently, Housing and Urban Poverty Alleviation Ministry Secretary Dr. N Chatterjee said if you have a well-managed park near your house, it raises the valuation of the property, almost between five to 15 per cent. Therefore, promoting public spaces for urban regeneration in crowded neighborhood is important.

Taking cues from there, the Delhi Development Authority (DDA) has proposed to build a 200-acres biodiversity park in the city. In other parts of the National Capital Region (NCR) , like Noida, authorities intend to build many parks, to make the area green. Apart from that, the authority has also proposed modifications in the masterplan for Delhi. 

Do we need more parks?

While some studies suggest that a well-maintained park will raise real estate prices in the neighbourhood by about 20 per cent, whether such parks pass the cost-benefit test depends on many factors. If the cost of acquisition, development and maintenance is higher than that of the potential rise in real estate values around parks, the benefits do not outweigh the costs.

Studies done on the costs and possible benefits of parks generally suggest that though real estate prices rise near parks, the effects wade as the distance from the parks rise. When many people visit parks, areas around it become crowded and the value of houses very close to such parks, in fact, declines. However, prices of the houses which are a little farther from parks generally rise because the effects of congestion and crowding are lower around such units. Houses very close to parks generally suffer the most from crowding, noise, congestion and the possible anti-social activities that happen in and around the park.

In Delhi, most houses are on small lots and do not have much open space around it. So, the effect of parks on houses is likely to be larger. However, there are no studies on this so far, partly because it is difficult to isolate the effect factors other than the existence of parks have on housing. Moreover, parks occupy valuable urban land. So, it is difficult to tell whether the possible loss of urban land from building a park is less than the benefits.