An Economic Analysis of Stream Restoration in an Urban Watershed: Austin, Texas.

By 2006, the U.S. government has spent $15 billion to address the degradation of urban streams, including erosion of stream banks, disconnection of rivers from the floodplain, and disturbance of surface runoff pathways. Bank stabilization is one of the most prevalent restoration activities in urban stream restoration. Unfortunately, most stream restoration projects have been undertaken without a pre- or post-evaluation of the impact of stream restoration on real value in the area. All restoration projects beg the question: Did the money spent on the project result in greater benefits to stream stability as well as to adjacent properties? The Walnut Creek watershed, located in Austin, Texas, has experienced varying stages of urbanization since the 1990s. One of the streams, the Walnut Creek tributary, was restored in 2003. The purpose of this study is to assess the impact of stream restoration on housing values. We applied the hedonic pricing method to evaluate the changes in housing value associated with housing and environmental characteristics. Repeat ground photography was utilized to assess stream restoration activities at spatial and temporal scales. Our results suggest that the stream restoration project resulted in significant positive impacts on housing values in the periods of restoration (8.3%) and restoration adjustment (10.7%). However, the project did not enhance the values of houses on the floodplain. In addition, results show that erosion had continuous negative impacts on housing values. Overall, the restoration project contributed to the greater benefits during the restoration adjustment period right after restoration by an increase of 1% of the average housing value for each property on the restoration site. In this study, the benefits of stream restoration project were minimal since bank stabilization was the main activity considered in this stream restoration project. Nevertheless, restoration enhances the stability of the stream banks, minimizes erosion problems, and presents an enhanced aesthetic beauty of the stream in Austin, Texas.