How much is a bike trail worth? About $9,000, if you live within 1,000 feet of it:
The research, by planning professor Rainer vom Hofe and economics professor Olivier Parent, looked at houses along a 12-mile stretch of the Little Miami Scenic Trail, a former rail line that cuts across the northeastern portion of Cincinnati. The pair found that home buyers were willing to pay a premium of $9,000 to be within 1,000 feet of access to the trail.
“A bike trail like this has many types of returns. Residents can use it as a way to commute, and most people use it for recreation,” says vom Hofe. “For local governments, you can make a strong argument that they get back some of the money invested in these public amenities in the form of higher property taxes. We see positive spillover in more densely populated urban areas as well as less densely populated, suburban areas.” The study looked at 1,762 houses, worth an average of $263,517, that were located within 10,000 feet of the trail.
If (marginal) property taxes had a net present value equal to any increases in property values — if they were, say, 5 percent per year — then local governments would have (theoretically) perfect incentives for providing “public” amenities, like bike trails and parks.
Not sure what the deal was for this particular trail, but often rail-to-trail projects are done with the proviso that the right-of-way can be used again for rail if the need ever develops. This has become a real issue with the projected surface-level Washington Metro line between Bethesda and Silver Spring, MD, which would run along right-of-way now used mainly by a bike path. The project would not destroy the trail, but not all trail users or residents are very happy about it.
Fascinating, and entirely expected. From a more classically libertarian perspective, it’s an interesting problem to work out how those residents could co-ordinate to produce the bike trail.
I would be interested if you could find an area where there’d been a lot of foreclosures. There can’t be that many mortgage companies, and an additional $9000 on every property could potentially add up to a lot.
The other alternative is something like Kickstarter, owned by a construction company, where local busybodies can start a proposal for a trail, take pledges of funds. When a threshold is reached, the construction company works out how much it would cost to build the trail (here in the UK we call them cycle paths), and when that value is reached the company builds the trail.