Money does grow on trees

One cool trick to make London greener

Written by Edward Keeling for the Greater London Project. Ed is the Founder of Albion Airspace.

Trees are fantastic, beautiful and inspiring. You can read about why in dozens of books, including Thomas Pakenham’s homages, Peter Wohlleben’s Secret Life of Trees, and my all-time favourite, Jean Giono’s The Man who Planted Trees.

Trees play just as vital a role in the urban jungle as they do in the real one. London is a forest, which comes with many benefits. Trees reduce pollution, removing 2,481 tonnes of carbon from the atmosphere every year, reducing particulate manner and saving lives. Trees prevent floods by preventing 45% of rain water from reaching the ground, also reducing river pollution from sewage run off. Trees cool areas by 5-12 °C, which is increasingly important as London warms, and keeps cooling bills down in the summer months. Trees support ecology, providing the “wildlife corridors” vital for biodiversity in urban areas. Trees reduce noise pollution. Trees promote health and wellbeing, by alleviating and reducing depression and by encouraging more exercise. Trees make areas feel safer, friendlier and can enhance the social value of living in leafy areas.

But in London planting trees is too hard, and funding the planting is difficult. And it doesn’t need to be.

Excellent efforts are being made to plant more urban trees, particularly by “Trees for Streets”, an arm of the charity Trees for Cities. Trees for Streets are doing formidable work, but planting using a conventional approach. But we can get hundreds more trees planted in London if we appeal to the market driven self-interest of residents.

Because trees are valuable. Not just for the reasons above, but also in cold, hard cash terms. Proximity to trees increases property values between 5 and 15%[1]. This increase can be leveraged to plant more trees.

Consider a hypothetical: a London street may have a mix of houses (worth £1.5 million) and flats (£500,000). The street is 150 metres long, with 25 properties on each side (50 total). The total property value of the street is, say £75 million.

Trees could be planted every 30 feet, which equates to 16 per side and 32 in total. They are planted in the pavement in a typical street tree manner. At a cost of £600 to plant each tree, this is a total cost of £20,000, or £400 per property.

With existing value of £75 million, a very conservative 2% increase in value would provide £1.5 million of added value to the whole street. Whether as house, or split into flats, this equates to a £30,000 added value per property.

However, a street full of freshly-planted saplings probably doesn’t add much value, which comes when the trees are mature. To address this, we can discount to obtain the present value. Assuming the saplings will be mature enough in 15 years to add just 2% to property prices, one can discount the £30,000 uplift by 15 years, at 5% per annum. Discounting still creates a return of £14,431 at today’s value; a return on investment of 36x. This ought to be so compelling that every property owner would willingly fund tree planting on their street – private equity would bite your hand off to make an investment with these returns!

London could be much leafier, with far more streets lined with trees. We don’t need another local government programme to do it, or more capital investment from the Mayor, we just need to give residents the right to plant trees on their road. These investments will more than pay for themselves, according to the most conservative of scenarios. Tree-mendous!

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Community notes:

• NEW EVENT: ​Join the Greater London Project for our second event: “Cultural capital: how London shaped the arts” In conversation with Munira Mirza

• Join the GLP WhatsApp here

• Reads of the week: Check out Jim Waterson’s new newsletter London Centric, on the Inside story of the Transport for London cyberattack. And definitely read The Londoner’s exclusive on MP Jas Athwal, the landlord of a failing children’s home

We hope you have a great(er) week!

Joe & the Greater London Project team

1 Research includes:

“Does Money Grow on Trees?” (2005)

“Urban Forest Values” (1998)

“The Park as a Determinant of Property Values” (1971)

“Assessing the Benefits and Economic Value of Trees” (2017)

“The Contribution of Trees to Residential Property Values” (1980)

“Green Investment Strategies” (2006)

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