A Systematic Literature Review of the Economic Effects of Stormwater Best Management Practices (BMPs) on Housing Prices

Abstract

The growing frequency and intensity of flooding is a global challenge. Stormwater best management practices (BMPs) have emerged as promising nature‐based solutions for mitigating runoff and promoting climate change adaptation and benefits to humans that encompass environmental, social, and economic values. Despite extensive research on their environmental and social impacts, the linkages between the economic effects and associated housing sale prices remain unclear.

We systematically reviewed 34 years of research, focusing on three questions: 1) How do stormwater BMPs affect housing prices? 2) What kinds of BMPs that affect housing prices have been studied over the last 34 years? 3) What other variables used in a standard hedonic pricing model contribute to the economic effects of BMPs on housing prices? Using the PRISMA approach, we reviewed articles from January 1990 to September 2024 across Google Scholar, ProQuest, and EBSCOhost search engines, narrowing down more than 20,000 studies to 33 relevant articles.

The study results show that studies of BMPs (trees, detention basins, retention basins, parks, etc.) use various measurements (e.g., percent coverage, proximity) to estimate the economic impacts on housing prices. Our robust findings show that BMPs have substantially more positive (78.7%) than negative effects (54.5%) on housing prices. Trees and parks had a more positive impact on housing prices than detention and retention basins. Although research on BMPs’ economic value is limited, our literature review highlights that estimates of the capitalization of real estate can be influenced by nearby stormwater BMPs, as evidenced by hedonic pricing models.