# RECORD 4ecf623f40ce01fde8d4ac0ee88291986f7a72fa
# TITLE: Economic Assessment of South African Urban Green Spaces Using the Proximity Principle: Municipal Valuation vs. Market Value
# YEAR: 2021.0  VENUE: Urban Planning  DOI: 10.17645/up.v6i4.4407
# AUTHORS: L. Lategan; J. Cilliers; Zinea Huston; N. Blaauw; S. Cilliers
# PAGES: 13  CANDIDATE TABLE PAGES (1-based): [6, 8]
# ABSTRACT: Urban green spaces (UGSs) deliver ecosystem services and potential economic benefits like increases in proximate residential property prices. The proximity principle (PP) premises that property prices increase as distance to UGS decreases. The PP has generally been confirmed by studies using municipal valuations and market values internationally. Conversely, South African studies have mostly employed municipal valuations and results have rejected the PP. There is an accepted interrelationship, but also often discrepancies, between municipal valuations and market values, presenting scope for this article to explore whether negative results are confirmed when market values replace municipal valuations in PP studies in the South African context. Accordingly, a statistical analysis of market values is completed in the Potchefstroom case study, where five test sites are replicated from studies that employed municipal valuations for longitudinal comparison. Results verify generally higher market values than municipal valuations and confirm the PP in two, but reject the PP in three, of five test sites. Previous studies employing municipal valuations in the case study confirmed the PP in one instance, thus presenting certain, but limited, inconsistencies between findings based on municipal valuation vs. market value. Results suggest that the market’s willingness to pay for UGS proximity is sensitive to the ecosystem services and disservices rendered by specific UGS, but not significantly more than reflected in municipal valuations. Overall, findings underscore the need to protect and curate features that encourage willingness to pay for UGS proximity to increase municipal valuations and property taxes to help finance urban greening.


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Urban Planning (ISSN: 2183–7635)
2021, Volume 6, Issue 4, Pages 54–66
https://doi.org/10.17645/up.v6i4.4407
Article
Economic Assessment of South African Urban Green Spaces Using the
Proximity Principle: Municipal Valuation vs. Market Value
Louis Lategan 1,*, Juaneé Cilliers 2, Zinea Huston 1, Nadia Blaauw 1 and Sarel Cilliers 1
1 Unit for Environmental Sciences and Management, North‐West University, South Africa;
E‐Mails: latlou.info@gmail.com (L.L.), zineahuston@gmail.com (Z.H.), blaauw.nadia@yahoo.com (N.B.),
sarel.cilliers@nwu.ac.za (S.C.)
2 School of Built Environment, University of Technology Sydney, Australia; E‐Mail: juanee.cilliers@uts.edu.au
* Corresponding author
Submitted: 27 April 2021 | Accepted: 27 July 2021 | Published: 14 October 2021
Abstract
Urban green spaces (UGSs) deliver ecosystem services and potential economic benefits like increases in proximate resi‐
dential property prices. The proximity principle (PP) premises that property prices increase as distance to UGS decreases.
The PP has generally been confirmed by studies using municipal valuations and market values internationally. Conversely,
South African studies have mostly employed municipal valuations and results have rejected the PP. There is an accepted
interrelationship, but also often discrepancies, between municipal valuations and market values, presenting scope for this
article to explore whether negative results are confirmed when market values replace municipal valuations in PP studies in
the South African context. Accordingly, a statistical analysis of market values is completed in the Potchefstroom case study,
where five test sites are replicated from studies that employed municipal valuations for longitudinal comparison. Results
verify generally higher market values than municipal valuations and confirm the PP in two, but reject the PP in three, of
five test sites. Previous studies employing municipal valuations in the case study confirmed the PP in one instance, thus
presenting certain, but limited, inconsistencies between findings based on municipal valuation vs. market value. Results
suggest that the market’s willingness to pay for UGS proximity is sensitive to the ecosystem services and disservices ren‐
dered by specific UGS, but not significantly more than reflected in municipal valuations. Overall, findings underscore the
need to protect and curate features that encourage willingness to pay for UGS proximity to increase municipal valuations
and property taxes to help finance urban greening.
Keywords
green infrastructure; market value; municipal valuation; proximity principle; South Africa; urban green space
Issue
This article is part of the issue “Towards Green(er) Cities: Contextualizing Green Benefits for Urban Spaces and
Contemporary Societies” edited by Juaneé Cilliers (University of Technology Sydney, Australia).
© 2021 by the authors; licensee Cogitatio (Lisbon, Portugal). This article is licensed under a Creative Commons Attribu‐
tion 4.0 International License (CC BY).
1. Introduction
Urban green spaces (UGSs) include land parcels of var‐
ious types located within the urban boundary, cov‐
ered by permeable surfaces, soil, or flora (Girma et al.,
2019, p. 138). Zoning classifications include residen‐
tial, recreational, commercial, or agricultural categories
to accommodate land uses like communal parks, play‐
grounds, sport facilities, greenways, green walls and
roofs, urban forests, private gardens, wetlands and ripar‐
ian areas, and street‐side vegetation. UGSs may also
encompass informal, residual, or unattended parcels,
including derelict properties, vacant lots, and spaces
along transportation corridors (J. Cilliers, 2013, p. 100;
Girma et al., 2019, p. 138). Scholarly interest in UGSs
has peaked in recent years, recognising their potential
contributions to urban quality of life and service deliv‐
ery as components of green infrastructure (du Toit et al.,
Urban Planning, 2021, Volume 6, Issue 4, Pages 54–66
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Table 3. Dependent t‐test results.
Area
Zone
N
(188)
Municipal
Valuation
in South
African
Rand/m2
Market
Value
in South
African
Rand/m2
Municipal
Standard
Deviation
Market
Standard
Deviation
Effect Size
T‐test
a ≈0,2 small
b ≈0,5 medium
c ≈0,8 large
Statistically
significant
difference
between
municipal and
market (p < 0,05)
Grimbeek Park
1
14
1,260.7
1,252.91
237.61
375.85
0,02a
0,941
2
14
1,611.67
1,584.32
295.96
421.64
0,06b
0,668
3
13
1,699.25
1,493.18
269.72
208.74
0,76c
0,019
van der Hoff
1
15
1,290.59
1,683.48
341.15
753.19
0,52b
0,016
Park
2
15
1,472.43
1,579.05
237.86
224.65
0,45b
0,143
3
13
1,624.3
1,902.34
279
339.58
0,82c
0
Heilige Akker
1
10
1,751.96
2,299.21
353.01
631.25
0,87c
0,012
2
12
1,904.15
2,692.38
280.09
858.19
0,92c
0,005
3
14
1,850.28
1,930.69
757.54
356.16
0,19a
0,603
Oewersig
1
14
1,668.44
2,355.76
338.6
642.54
1,07c
0
2
14
1,852.15
2,480.35
360.64
876.91
0,72c
0,031
3
13
1,549.2
2,037.73
415.18
255.85
1,52c
0
Potchefstroom
1
9
1,116.44
2,139.69
336.36
1,213.69
0,84c
0,019
Dam
2
9
1,303.45
2,223.11
421.46
408.47
2,25c
0,001
3
9
1,448.64
2,308.59
421.61
1,009.9
0,85c
0
significantly higher than municipal valuations in four of
five test sites, with the exception of Grimbeek Park.
Figure 1 illustrates the differences captured in Table 3
regarding fluctuations from Zone 1 to Zone 3 in each
test site.
In Grimbeek Park, results presented a general rejec‐
tion of the PP from Zone 1 to 3, but confirmed the prin‐
ciple between Zones 2 and 3 with regard to estimated
market values. Findings differed slightly in that munic‐
ipal valuations showed a consistent upward trajectory
to reject the PP from Zone 1 to 3. In van der Hoff Park,
the PP was confirmed between Zone 1 and Zone 2, but
rejected between Zones 1 and 3. Thus, differing slightly
from municipal valuation findings that showed a con‐
sistent upward trajectory, but confirming findings on a
rejection of the PP in general terms. In Heilige Akker,
the PP was rejected between Zone 1 and Zone 2, but
confirmed for Zone 1 to Zone 3. Findings concurred
with data from municipal valuations showing a peak
in Zone 2, but departed where the PP was rejected.
For Oewersig, data rejected the PP between Zone 1
and Zone 2, but confirmed the principle for Zone 1 to
Zone 3. Results were mirrored in municipal valuations.
For Potchefstroom Dam, Zone 3 presented a higher mar‐
ket value estimate than Zone 2 and Zone 1, resulting in
a rejection of the PP. This trend echoed findings derived
from municipal valuations.
Statistical substantiation to the findings above were
provided via ANOVA and Kruskal‐Wallis testing using
2020 market value estimates. For ANOVA an effect size
of ≈0.2 indicates a small, no practically significant differ‐
ence; an effect size of ≈0.5 indicates a medium, practi‐
cally visible difference; and an effect size of ≈0.8 indi‐
cates a large, practically significant difference. For the
Kruskal‐Wallis test, an effect size of ≈0.1 indicates a
small or no practically significant difference; an effect
size of ≈0.3 indicates a medium or practically visible
difference; and an effect size of ≈0.5 indicates a large
or practically significant difference. Results are captured
in Table 4.
The results from the Kruskal‐Wallis test were pre‐
ferred when the outcomes of statistical tests differed.
This is also reflected in Table 5 that summarises com‐
plete results in conjunction with Combrinck et al.’s (2020)
main findings.
7. Conclusions
Municipal valuations were considerably lower than esti‐
mated market values in almost all test sites and a large
practically significant difference could be established;
in general, by a significant 28%, which is well above
accepted standards of deviation. Grimbeek Park pre‐
sented an interesting case, as the only example in which
municipal valuations exceeded estimated market values.
It falls beyond the scope of this article to investigate
the reasons behind this and opportunities for further
research are thus presented. As a point of departure for
future investigations, it is interesting to note that in a
review of the five test sites included in this research,
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3000
2500
R/m2
2000
1500
Zone 1
Zone 2
1472,43
Zones
Van der Hoff Park
Zone 3
1000
500
0
1579,05
1902,34
1624,3
Market
Municipal
B
1290,59
1683,48
3000
2500
R/m2
2000
1500
Zone 1
Zone 2
1584,32
Zones
Grimbeek Park
Zone 3
1000
500
0
1611,67
1699,25
1493,18
Market
Municipal
A
1252,91
1260,7
3000
2500
R/m2
2000
1500
Zone 1
1668,44
2355,76
Zone 2
Zones
Oewersig
Zone 3
1000
500
0
2480,35
2037,73
1549,2
Market
Municipal
D
1852,15
3000
2500
R/m2
2000
1500
Zone 1
2299,21
Zone 2
Zones
Heilige Akker
Zone 3
1000
500
0
2692,38
1930,69
1850,28
Market
Municipal
C
1904,15
1751,96
3000
2500
R/m2
2000
1500
Zone 1
Zone 2
Zones
Potchefstroom Dam
Zone 3
1000
500
0
Market
Municipal
E
1116,44
2139,69
1303,45
2223,11
2308,59
1448,64
Figure 1. Mean South African Rand/m2 municipal valuation and estimated market values for the Potchefstroom sample.
based on attributes related to UGSs and the environmen‐
tal, social, and economic benefits (as ecosystem services)
offered, Combrinck (2020) found that Grimbeek Park’s
UGS delivered the highest overall scores. As a supple‐
mentary consideration, the UGS in Grimbeek Park pre‐
sented the only example of a golf course. Several interna‐
tional studies have indicated that golf courses specifically
increase proximate property values at significant levels
(Crompton & Nicholls, 2020; Nicholls & Crompton, 2007;
Yates & Cowart, 2019).
Another interesting observation relates to the zone
in which values reached a peak in each test site. Using
municipal valuations, Combrinck et al. (2020) established
peaks in Zone 1 in no test sites; peaks in Zone 2 in two
test sites (Heilige Akker and Oewersig); and peaks in
Zone 3 in three test sites (Grimbeek Park, van der Hoff
Park, and Potchefstroom Dam). In contrast, estimated
market values delivered peaks in Zone 1 for no test sites
(yet, in van der Hoff Park Zone 1 presented a higher
estimate than Zone 2); peaks in Zone 2 for three test
sites (Grimbeek Park, Heilige Akker, and Oewersig); and
peaks in Zone 3 for two test sites (van der Hoff Park and
Potchefstroom Dam). Peaks were thus registered signifi‐
cantly differently using municipal valuation vs. estimated
market value.
The absence of peaks in Zone 1 in both data sets,
even where the PP was confirmed (Heilige Akker and
Oewersig) underscores the negative impacts of adja‐
cency to UGS in South Africa, ascribed to ecosystem
disservices such as crime, a lack of maintenance, and
other nuisance factors (see Davoren & Shackleton, 2021,
and Table 1). The presence of a higher market value
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Table 4. ANOVA and Kruskal‐Wallis testing.
Area
Zone
N
(188)
Market
Value in
South
African
Rand/m2
Standard
Deviation
Effect Size
ANOVA
Kruskal‐
Wallis
ANOVA
Kruskal‐Wallis
Statistically
significant
difference
between
means
(p < 0,05)
Statistically
significant
difference
between
mean
ranks
(p < 0,05)
a ≈0,2 small
a ≈0,1 small
b ≈0,5 medium
b ≈0,3 medium
c ≈0,8 large
c ≈0,5 large
1 with…
2 with…
1 with…
2 with…
Grimbeek Park
1
14
1,252.91
375.85
2
14
1,584.32
421.64
0.79c
0,373b
0,047
0,057
3
13
1,493.18
208.74
0.64b
0.22a
0,411b
0,028a
van der Hoff
Park
1
15
1,683.48
753.19
2
15
1,579.05
224.65
0,14a
0,140a
0,237
0,022
3
13
1,902.34
339.58
0,29a
0,95c
0,440c
0,457c
Heilige Akker
1
10
2,299.21
631.25
2
12
2,692.38
858.19
0,46b
0,197a
0,017
0,011
3
14
1,930.69
356.16
0,58b
0,89c
0,287b
0,615c
Oewersig
1
14
2,355.76
642.54
2
14
2,480.35
876.91
0,14a
0,052a
0,208
0,35
3
13
2,037.73
255.85
0,49b
0,50b
0,224a
0,252b
Potchefstroom
Dam
1
9
2,139.69
1,213.69
2
9
2,223.11
408.47
0,07a
0,468c
0,93
0,203
3
9
2,308.59
1,009.9
0,14a
0,08a
0,177a
0,135a
estimate in Zone 1 than Zone 2 in van der Hoff Park
and more peaks in Zone 2 than Zone 3, when contem‐
plating estimated market value vs. municipal valuation,
indicate that whilst immediate adjacency is not always
valued, some proximity to UGSs may be appreciated to
capitalise on ecosystem services (see Escobedo, 2021,
p. 227, and Table 1) and reduce the potential impacts of
ecosystem disservices, despite the presence of domes‐
tic UGSs. This may also relate to the impacts of visual
access to public greenery that present pleasant vistas or
offer amenities (Panduro & Veie, 2013, p. 126; Sharmin,
2020). Although the aim of this study was not to deter‐
mine to what extent the market’s willingness to pay is
sensitive to the ecosystem services and ecosystem dis‐
services produced by specific UGSs, the importance of
acknowledging these aspects is emphasised in the litera‐
ture (Davoren & Shackleton, 2021).
The results in Figure 1, together with the average
medium practically significant differences established
from zone to zone, confirmed the PP in two test sites
using estimated market values compared to one when
employing municipal valuations. These are not over‐
whelming contrasts, but preliminary findings indicate
that the relationship between UGS proximity and willing‐
ness to pay for proximity may be less clear‐cut and lin‐
ear in South Africa than previously reported based on
municipal valuations (Cilliers & Cilliers, 2015; Combrinck
et al., 2020). Results still contrast with international
norms on the general confirmation of the PP using esti‐
mated market values as variables. These preliminary find‐
ings suggest that the influence of the variable employed
(municipal valuation vs. market value) can thus poten‐
tially be disregarded as an explanation for exceptions
identified in previous South African‐based research on
the PP (Table 2).
Although efforts to quantify the value of UGSs have
increased, more research is needed in the Global South
to provide case studies to guide context‐based planning
(S. S. Cilliers et al., 2021) and clarify the relationship
between UGS proximity and willingness to pay. Future
studies may compare municipal valuations and market
value estimates on a larger scale in various sites and
may consider the physical attributes and specific ecosys‐
tem services and ecosystem disservices rendered by indi‐
vidual UGSs through more qualitative approaches to
address certain limitations of this research. The complex‐
ity of developing integrated urban planning and man‐
agement systems focusing on ecosystem services and
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Table 5. Comparative summary of results.
Municipal Valuation (2019)
Estimated Market Value (2020)
Test Site
Estimated
market
value
higher
than
municipal
valuation
Zone 1
vs.
Zone 2
Zone 2
vs.
Zone 3
Zone 1
vs.
Zone 3
PP from
zone to
zone
General
effect
size (non‐
parametric
test)
Verdict PP
based on
municipal
valuation
Zone 1
vs.
Zone 2
Zone 2
vs.
Zone 3
Zone 1
vs.
Zone 3
PP from
zone to
zone
General
effect
size (non‐
parametric
test)
Verdict PP
(estimated
market
value)
Grimbeek
Park
No
Lower
Lower
Lower
(Zone 3
peak)
Rejected
(Zone 1 to 3)
Large
Rejected
Lower
Higher
(Zone 2
peak)
Lower
Confirmed
(Zone 2 to 3)
Rejected
(Zone 1 to 3)
Medium
Rejected
van der Hoff
Park
Yes
Lower
Lower
Lower
(Zone 3
peak)
Rejected
(Zone 1 to 3)
Medium
Rejected
Higher
Lower
Lower
(Zone 3
peak)
Confirmed
(Zone 1 to 2)
Rejected
(Zone 1 to 3)
Medium
Rejected
Heilige Akker
Yes
Lower
Higher
(Zone 2
peak)
Lower
Rejected
(Zone 1 to 3)
Small
Rejected
Lower
Higher
(Zone 2
peak)
Higher
Rejected
(Zone 1 to 2)
Confirmed
(Zone 1 to 3)
Medium
Confirmed
Oewersig
Yes
Lower
Higher
(Zone 2
peak)
Higher
Confirmed
(Zone 1 to 3)
Medium
Confirmed
Lower
Higher
(Zone 2
peak)
Higher
Rejected
(Zone 1 to 2)
Confirmed
(Zone 1 to 3)
Small
Confirmed
Potchefstroom
Dam
Yes
Lower
Lower
Lower
(Zone 3
peak)
Rejected
(Zone 1 to 3)
Medium
Rejected
Lower
Lower
Lower
(Zone 3
peak)
Rejected
(Zone 1 to 3)
Medium
Rejected
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