Green Roofs - Living Architecture Monitor - Spring 2009 - (Page 28)

SOFT BENEFIT VALUATION NEW RESEARCH EXPLORES OPTIMAL WAYS OF DETERMINING THE ECONOMIC VALUE OF THE SOFT BENEFITS OF GREEN ROOFS By Ray Tomalty, Bartek Komorowski & Dany Doiron he use of green roofs can offer a tangible solution to many challenges faced by communities across North America today. Vegetated roofs offer social and environmental benefits to building occupants and owners, municipal governments and surrounding communities. Benefits range from improved stormwater management, habitat creation, absorption of air pollutants and reduced energy requirements, to crime reduction, community building and opportunities for food production. In short, green roofs can improve the overall functionality of the ecosystem, contribute to economic efficiency, and enhance the quality of human life. Articulating the economic value of the numerous environmental and social services of green roofs provides an estimate of their contribution to local and regional economies and permits governments, land developers and building owners to assess short- and long-term public and private benefits within a framework to help make investment decisions. While some benefits have easily calculated market prices (such as the reduction in energy use for heating/cooling after installation of a green roof), most do not have market prices and are, therefore, more difficult to estimate (such as the health benefits for users of a rooftop garden). Excluding these “soft” non-market benefits from assessments of the value of green roofs leads to a vast underestimation of their real benefit to building owners, to society and results in less policy attention devoted to the infrastructure that gives rise to them. Moreover, without a quantified value, “soft” benefits cannot be objectively classified or compared to one another, or 28 LIVING ARCHITECTURE MONITOR SPRING T other benefits, making rational decisions about the best return on public and private investment very difficult. Soft-benefit valuation is, therefore, a critical undertaking to better inform public policy initiatives and private development decisions. In order to help address this need, we are conducting a study with Green Roofs for Healthy Cities, funded by CMHC, that will help architects, property developers, building owners and policymakers estimate the monetary value of the non-market services provided by green roofs. Non-market valuation techniques have been developed in order to estimate the net value that the public or individuals attribute to environmental amenities such as green infrastructure. Since very few studies to date have touched on the economic valuation of green roof soft benefits, valuation methods are gathered from research on other types of green infrastructure. Many of the soft benefit valuation techniques used for urban parks, wetlands and open spaces can also be applied to green roofs, especially to those that are accessible or partly accessible. Three general categories of non-market valuation methodologies exist. The first category, revealed preference methods (i.e. travel cost, hedonic pricing, market comparables and cost avoidance) use behaviours and information observed in markets to estimate nonmarket values. The second category, stated preference methods (e.g. contingent valuation), attributes economic value by asking people their willingness to pay for a service, or willingness to accept compensation to voluntarily forgo a service. The third category is avoided cost analysis, which is used to determine the value of green infrastruc- ture by quantifying the costs that would be incurred if the services provided by the infrastructure were not available or had to be provided by building conventional infrastructure. Table 1 (right) presents a summary of nonmarket valuation methods explored in our report and the strengths and limitations of each. The objective of our research is to provide readers with non-technical methods for estimating the soft benefits associated with a green roof project based on readily-available information and without the need for undertaking major research. The benefits that are included here are those for which we could find relatively simple valuation methods that could be applied by nonspecialists with limited resources for data gathering. The proposed methods were gathered from current practices and the existing literature. The benefits for which we propose methods for estimating monetary values are as follows: Property Values: Green infrastructure investments have been shown to positively affect the property value and marketability of nearby real estate (Edwards, 2007). In the case of green roofs, this benefit would accrue to the owner or owners of a building with a green roof and, to a lesser degree, to owners of surrounding properties. Hedonic valuation techniques have been used to measure the relationship between the selling price of a residence and its distance from an urban greenspace, park, community garden or wetland. For example, a home abutting on a park is typically worth approximately 20 percent more than an identical home without the park amenity (Crompton, 2005). At present, there are no studies that have measured the potential of green roofs in increasing the selling price of a condominium or other residential building. In the absence of hedonic pricing studies looking specifically at green roofs, we can use estimates of property value increases generated by other types of green infrastructure, e.g., an at-grade community garden or park. Marketing Benefits: Green infrastructure – and green roofs in particular – not only increase the monetary value of a property due to proximity benefits, but may also improve the marketability of real estate. The mass media and the public’s interest in environmentally friendly products and services continue to rapidly increase in North America. Green roofs and other green infrastructure on or near a building can therefore be considered as a marketing amenity that increases a development’s exposure and enhances the absorption rate of its units. Applying the comparable costs methodology, one way

Table of Contents for the Digital Edition of Green Roofs - Living Architecture Monitor - Spring 2009

Green Roofs - Living Architecture Monitor - Spring 2009
From the Founder
Opportunity Knocks
New Green Roof Incentive for Toronto
The Role of Structural Engineer
On the Roof With...
Roots of Learning
Urban Farming
Pushing the Envelope on Community-Scale Research
Raising a Green Roof for Eco-Literacy
Soft-Benefit Valuation
What's New for Atlanta
GHRC Professional Development Calendar
Accreditation Milestone
Welcome New Corporate Members
Moving On

Green Roofs - Living Architecture Monitor - Spring 2009