Maintaining clean water has economic benefits too
When I was eight years old, which seems like a million years ago, I purchased my very first pack of baseball cards at the local arcade. I bought the cards with a handful of tickets I’d won after a particularly sweaty yet dominant round on the ol’ Skee-Ball machine, and the instant the smooth Topps packaging touched my fingertips I truly believed myself a financial genius.
In those days, baseball cards—or any trading cards, for that matter—were like hedge fund portfolios for kids. I didn’t know what awaited me inside that unopened pack of cards, but I was certain it would be something special. Mentally crossing Be Rich off my life goals, I stowed the cards in my fanny pack for safe keeping, puffed my chest out a little, and went off to find my mom to ask for more quarters.
It’s always a strange and exhilarating experience to know you’ve got something valuable at your fingertips, but aren’t entirely sure how valuable it might be. Take our Montana lakes, for instance. I don’t think anyone questions that our incredible waters have a positive impact on real estate, but just how significant is that impact?
Recently, FLBS Environmental Economist Nanette Nelson teamed up with Whitefish Lake Institute's Lori Curtis to estimate the benefits that Whitefish and Flathead Lakes impart on home values in the form of price premiums for lakefront and nearby real estate. Using a hedonic pricing model and a data set that consisted of over 7,000 sales transactions from 2004 to 2018, their study estimated how much more people are willing to pay for homes with lake-associated amenities.
What Nelson and Curtis documented was the far-reaching economic importance of maintaining our high water quality. The data suggest that highly desirable lakes such as Flathead and Whitefish dramatically enhance surrounding property values, thereby contributing significantly to the local economy and tax base.
According to the study, Whitefish and Flathead Lakes contribute upwards of $3 billion to local property values, and $17 - $25 million in property tax revenue annually.
As it turned out, that pack of cards I purchased all those years ago was a pretty solid investment…or at least it should’ve been. Inside that crinkly wrapper, behind the shattered shards of bubble gum and sandwiched between a dozen other Topps cards was a Ken Griffey Jr. rookie card. I probably would’ve recognized its significance if I’d had a better understanding of sports cards back then, which surely would’ve prevented me from trading it for a pog slammer and a Teenage Mutant Ninja Turtle-themed pastry a few weeks later.
At the time, that seemed like the greatest transaction in the world. I mean, the pog slammer had a skateboarding dinosaur on it, and the filling of that Ninja Turtle pastry was radioactive green! It’s only recently—having stumbled upon the knowledge that the same Ken Griffey Jr. rookie card is selling for five-figures online—that I’ve started to regret the decision, wishing I’d opted instead to recognize and appreciate the value of what I had.
Fortunately, I have another a shot at recognizing and safeguarding something special, and the stakes are higher because this is not just about me. Nelson and Curtis’s study helps us by quantifying the real estate and tax benefits of our healthy lakes. Therefore, monitoring and protecting our lakes is not only important for maintaining the ecological integrity and recreational opportunities in our watershed, but also for sustaining the economies of our communities. I for one can’t think of a better investment than taking the steps to protect our amazing watershed…
…unless you have a brightly-colored pop culture pastry you’d be willing to trade?