How do public spaces strengthen local economies? Here are 4 ways.
When you go to a neighborhood park or hang out at a recreation center, you may not think about the economic impact of the public amenity you are enjoying. But research shows that our public spaces can generate significant economic value. For example, a UN Habitat study showed that every $1 spent on park maintenance in Philadelphia generated nearly $100 in economic value. And when investments are made with intention, public spaces can help catalyze equitable economic opportunity in cities and neighborhoods while reducing costs from health care to climate change.
Here are four ways that public spaces can contribute to local economic growth.
1. Public spaces attract people to live and visit
Research shows that the presence of public spaces in a city can draw people to live there or visit. When deciding where to live, 85% of residents identify proximity to parks, playgrounds, open space or recreation centers as an important factor, and 65% of home shoppers said parks would seriously influence them to move to a community.
Economic data back up the importance of quality of place. In research looking at the revitalization of former industrial towns in the Midwest, Brookings found that high-quality amenities such as recreation opportunities and cultural activities likely contributed more to economic growth than “business-friendly” measures like lower taxes and labor costs. In fact, the researchers demonstrated that “quality of life matters more for population growth, employment growth and lower poverty rates than quality of business environment.”
“In the Great Lakes and Midwest region, we’ve got 10,000 miles of Great Lakes coastline and thousands and thousands of smaller lakes and rivers. Leveraging these natural assets is a powerful economic development path. When you clean up the industrial waterfronts and create public access in multiple forms, it makes a wonderfully enjoyable community, a community that people want to live in.”
— John Austin, Brookings researcher and of director of the Michigan Economic Center, in a recent conversation with Reimagining the Civic Commons
Public spaces also spur tourism, creating jobs and boosting local economies. A National Recreation and Park Association poll found that people seek out park and recreation amenities, including beaches, parks and trails, when choosing a vacation destination. When people visit a place, local economies experience benefits including increased sales at local restaurants, bars, hotels and shops.
One striking example is Riverwalk Park in San Antonio, Texas. Created for $425,000, the riverside park lined with outdoor commerce has overtaken the Alamo as the most popular attraction within the city’s $3.5 billion tourism industry. And in Tulsa, Oklahoma, Guthrie Green — formerly a truck-loading facility — has become the area’s leading destination and a model for sustainability. The park draws 3,000 people every week to daily programmed activities and sparked more than $150 million in investment for commercial and residential projects in downtown Tulsa’s emerging Arts District.
2. Public spaces generate social bonds that spur innovation and employment
The COVID-19 pandemic altered the landscape of America’s workforce in ways that appear to be lasting — and that may lend increased importance to the presence of vibrant public spaces in cities. As of 2022, office space in major U.S. cities remained just 41% occupied as many former office workers continued to work remotely. This indicates that expectations for downtown business districts may need to adapt, shifting from a focus on offices to an emphasis on cultural and social amenities that attract diverse people to interact and exchange ideas.
By drawing diverse people to interact and share space, public spaces such as plazas and parks are ideal for fostering the types of social bonds that lead to professional opportunity. Research has shown that weak social ties, such as those with colleagues or acquaintances, are better for creating job mobility and opportunity than strong social ties, such as relationships with family members and close friends. According to a study from MIT that looked at LinkedIn data, “Your more casual acquaintances… have social networks that overlap less with yours and may provide connections or information you would not otherwise be able to access.”
Public spaces can also spur innovation by functioning as “third places” — physical locations other than work and home where the barrier to entry is low and it’s easy to interact with new people. And public spaces can directly generate business activity by attracting customers, employees and services. For example, Dunkin’ Donuts stores in Brooklyn that are adjacent to parks see on average more than twice as many customers as stores that are not next to parks.
3. Public spaces increase property values
Economic research consistently shows that homes and properties located near parks have higher values than those located farther away. Higher home values not only benefit the owners of these properties, but also add to the tax base of local governments.
However, these impacts are not felt equally. For example, while almost half of all white people in the U.S. live within walking distance of a park, only one-third of Latinos share that same privilege. Further, people in low-income neighborhoods and communities of color have historically faced barriers accessing high-quality public spaces — and poorly maintained parks can detract from the value of nearby properties.
To support equity, cities are developing models to spur higher property values in ways that benefit existing residents. In Detroit, the Strategic Neighborhood Fund (SNF) works to stabilize neighborhoods and attract new residents through projects aimed at boosting economic opportunity and improving quality of life. Launched in three neighborhoods in 2016 and expanded to seven more in 2018, SNF funds community-driven projects that improve public spaces and streetscapes, develop commercial corridors and support affordability for single-family homes.
The initiative is demonstrating the potential for equitable redevelopment. Three years in, 65% of residents in SNF’s three initial neighborhoods reported that property values in their neighborhood had increased, compared with 29% of residents in non-SNF neighborhoods. In spite of this increase in value, SNF neighborhood residents were not more likely than residents of other neighborhoods to be concerned that their neighborhood was getting too expensive.
4. Public spaces help reduce other costs
Public spaces have been shown to contribute to significant and varied cost savings, from reducing health care costs to mitigating the effects of climate change.
Proximity to parks, green space and tree cover are associated with increased physical activity, an association that is strengthened when recreational programming and outreach are also present. The results include reduced health care costs and improved productivity. In Massachusetts, for instance, parks and green spaces contribute physical health benefits equivalent to about $2 billion in reduced health costs related to lack of physical activity. And in New York City’s Central Park, a study found that physical activity in that park alone reduces health care costs and associated losses of labor productivity by $53 million each year.
Public spaces also mitigate the costs of climate change and pollution. One estimate indicated that urban tree cover accounts for 700 million metric tons of carbon storage and a sequestration rate of 22.8 million metric tons a year, with a net cost benefit of nearly $15 billion. The presence of a developed tree canopy can also counteract some of the temperature increases caused by the urban heat-island effect.
The research is clear: Public spaces have the potential to boost local economies in lasting and multifaceted ways. Looking to the future, the economic value generated by parks, trails, plazas and more can help make the case for investment, and the innovative work already underway can provide inspiration for transforming public spaces in ways that support equitable economic growth.
Editor’s note: Our action guide Place Driving Equity shares research, policy recommendations and concrete strategies to advance equity through investments in public space. Download it today to learn how your community’s public spaces can play a role in creating more shared prosperity.
Reimagining the Civic Commons is a collaboration of The JPB Foundation, the John S. and James L. Knight Foundation, The Kresge Foundation, William Penn Foundation, and local partners.
