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Financing Urban Forestry

Street Trees Autumn

Lexi Kay is the Marketing and Outreach Coordinator at the Environmental Finance Center at the University of North Carolina.

Before joining the staff at the Environmental Finance Center at UNC, I spent a lot of my time in graduate school exploring another passion: urban forestry.  After all, what’s not to love about trees, and shouldn’t all cities have lots of them? I think so, and so do lots of other people out there. But coming to the EFC inspired me to think about urban forestry in a new light: here at the EFC, we love to ask “how do you pay for it”? So it seems natural that I should explore how cities in the US are paying for the maintenance and improvement of their urban forests and how we can ensure that urban forestry programs are financed in a sustainable way.

Last October, our Director Jeff Hughes wrote about using urban forests as local government infrastructure, explaining that urban trees can be seen as an investment, just as improvements in water and sewer infrastructure are. A large body of research has shown that investments in urban forests lead to real benefits. That’s because trees do lots of great things: they save energy; they improve air and water quality; and finally, they carry important social benefits. City trees enhance property values, lower energy bills, defer street maintenance costs, increase commercial activity, and reduce healthcare costs. For example, according to a 2006 report by ICLEI, properties with trees are valued 5% to 15% higher than comparable properties without trees. However, despite these benefits, urban forestry is too often the low man on the totem pole when it comes to municipal spending.

On the national level, limited funding for urban forestry is provided through the US Forest Service. In 2007, $30.1 million was financed to the 50 state Urban and Community Forestry programs. That federal program is currently being redesigned, though the 2014 Urban Community Forestry Advisory Council currently has an open RFP to dole out $900,000 for new programs. Widespread decreased funding (not just at the federal level) and competition with other public services is likely the greatest challenge to urban forest advocates today.

This leaves room for states and municipalities to get creative in financing their urban forestry initiatives. Managing the urban forest is expensive in and of itself; according to a 2007 American Public Works Association report, almost 75% of spending on urban forests goes toward maintenance and management. That leaves a small portion for actually planting new trees, which is what most cities really need.

In the face of funding challenges, cities that are interested in increasing their budgets for urban forestry have several options. For example, the City of San Francisco is considering a wide range of financing options to fund its goal to plant 5,000 trees/year for the next 20 years at a cost of as much as $38 million, including:

  • Establishing a Landscape and Lighting Assessment District (LLAD), a tool used widely throughout California to fund public improvements including street trees, street lights, and recreational facilities. The establishment of a LLAD would require approval from a majority of property owners within the LLAD.
  • Creating a Parcel Tax, or a special tax levied to provide specific benefits. The parcel tax would create a dedicated funding stream for street trees. It must be approved by two-thirds of all voters, rather than just property owners.
  • Issuing a General Obligation Bond that would be retired through the general tax revenues that could be used to fund the capital costs of tree planting and establishment, but could not be used for maintenance. This also would need to be approved by two-thirds of all voters.

Certainly there is no one-size-fits-all solution for urban forestry programs. In addition to the above examples being considered by San Francisco, cities may opt to use other financing techniques, many of which are detailed in the aforementioned APWA report.

Financing Instruments:

  • General Fund and Departmental Funds
  • Federal, State, and Private Foundation Grants
  • Taxes, Special Assessments, and Special Tax Districts
  • Capital Improvement Budgets

Revenue Streams:

  • Tree Work Permit, Development, and Inspection Fees
  • Compensatory Payments and Environmental Fees
  • Utility Bill Donations
  • Memorial and Honor Trees
  • Promotion of Federal Tax Incentives to Citizens
  • Carbon Trading
  • Sale of Municipal Wood Products
  • Private Donations/Corporate Sponsorships

The EFC has been thinking a lot about the broader idea of green infrastructure, which includes urban forestry other strategies to manage stormwater like green roofs, green streets, rain gardens, and more. We’re interested to learn more about what financing strategies are being and can be applied to design the most sustainable green infrastructure programs possible.

SeedlingWhat works for financing urban forestry and other green infrastructure projects? Do you have any interesting examples to share? Comment below!

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    6 comments to Financing Urban Forestry

    • [...] Financing Urban Forestry | Alexandra Kay | Environmental Finance at the University of North Carolina “Certainly there is no one-size-fits-all solution for urban forestry programs. In addition to the above examples being considered by San Francisco, cities may opt to use other financing techniques, many of which are detailed in the aforementioned APWA report.” [...]

    • [...] Financing Urban Forestry | Alexandra Kay | Environmental Finance at the University of North Carolina “Certainly there is no one-size-fits-all solution for urban forestry programs. In addition to the above examples being considered by San Francisco, cities may opt to use other financing techniques, many of which are detailed in the aforementioned APWA report.” [...]

    • Pat

      Very interesting article. I agree that there should be more forestry wherever possible and need to be mindful of costs. Thanks for posting.

    • Mike

      While the facts might be that the average municipality spends 75% of their budget on tree maintenance, I would disagree with the assertion that most cities need more trees (ergo more money for tree plantings). Too often the “infrastructure” is ignored and poorly maintained. When budgets get tight maintenance is the first to get cut. Yet, everyone wants a photo op with a tree being planted. If trees planted 3,5,25, and 50 years ago had been properly maintained the cities would have more trees. Plus, these trees would be healthier, more vigorous hence sequestering more carbon, etc….

    • Thanks for starting this very important discussion Lexi. Here’s where I’m at, the summer was too short & it’s the end of the day, please forgive me, I’m feeling passionate: 1) How do we pay for trees? Let’s have a bake sale! How come stormwater pipe projects get bonded for 10′s to 100′s of million of dollars, but us Green Infrastructure advocates, have to get by on pocket change? Please pay for GI projects with municipal bonds. Please Retirement fund administrators, invest in tree infrastructure @ 6% to 8% returns rather than gamble on the stock market or get 1/2% from bank accounts. 2) Please, enough already with the tree counts. Please San Francisco, with one of the lowest urban tree canopy coverages in the country, please do this: instead of a 100,000 crummy trees @ $380 each that live for <20 years, please give us 10,000 trees @ $5,000 each that live for 50 to 100 years. 3) Also, SF, the maker of Silva Cells that grows big trees under pavement is based in San Francisco, please support a home-grown company & grow big trees at the same time. 4)Emerald Ash Borer (EAB) will kill all untreated ash trees; 100's of square miles of urban canopy in North American cities will be lost soon. Whatever gains in non-point pollution that have been made will be reversed as the <1" storms will soon land on pavement not on leaves & branches, carrying E.coli, Phosphorous, Heavy metals, etc. to our lakes, rivers & seas. 5) Cities, please prevent treat the biggest Ash trees for EAB for the next 10 to 20 years, so that we can plant the new trees needed to replace that disappearing Ash canopy & save our hard won water quality. Thanks for reading, Peter MacDonagh

    • IRA Doc

      This has been an interesting read. I currently reside in the Los Angeles are and I wonder myself where a lot of the money goes when financing forestry. One of my favorite places to visit is Griffith Park because it still retains a lot of natural habitat.
      I’m all for the support of boosting forestry in large city and municipal areas. There’s nothing quite like the smell of sequoias amid an urban environment.

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