Valuation of Forested River Riparian Buffers for Riverine Integrity and Climate Resilience

Abstract

This study investigates the connection between riparian buffers and property values. Buffers protect the integrity of aquatic ecosystems and support resilience to rising temperatures and severe storms due to climate change. A hedonic study was conducted to estimate the value of riverfront land and forested riparian buffers along the New and Watauga Rivers in North Carolina. Property owners place a significant value on river frontage and associated amenities – 24% of a property value is attributable to the river frontage, $107,000 of a mean property value of $445,510. Owners of river-front properties value forested riparian buffers but they do not want all the riparian buffer on their land forested. Property sale prices increase as the percentage of the riparian buffer that is forested increases and prices are maximized at 43% tree cover. At 43% tree cover, 30% property sale prices are attributable to riparian tree cover. However, with 100% tree cover property values are reduced by $130,000 relative to an average priced property with no riparian tree cover. The results can help government agencies and NGOs interested in riverine ecosystem resilience in the face of development and climate change to motivate revegetation of riparian buffers with limited tree cover; it is in the financial, and esthetic, interest of landowners. If extensive tree cover is desired, greater than 43% forested, landowner education and revegetation cost-sharing programs are unlikely to provide sufficient incentives to garner landowner participation and more sophisticated programing is required such as property tax reduction incentive programs and zoning.

Keywords: revealed preference, hedonic model, spatial correlation, riparian buffers, forest cover