How to Determine the Value of Your Trees
Well-placed trees bring value to your property in many ways. They make your landscape more attractive, purify the air, attract wildlife and perform a myriad of other benefits. These are all good things, but simply expounding the benefits of trees all day does no good. To inspire people to spend money on planting and caring for trees, a dollar value needs to be put behind the benefit.
Luckily there are several methods we can use to determine the dollar value behind trees and their associated benefits. Below is an overview of a few of the methods that you can use to determine the dollar value of tree benefits on your property. You can also use them to determine what type of tree to plant and where to place it.
Tree Valuation Websites
i-Tree
i-Tree is a suite of software tools from the USDA Forest Service that provides urban and rural forestry analysis and benefits assessment. It includes several different applications for quantifying the benefits of trees, while including the monetary value of each benefit.
i-Tree Design is the most useful of the i-Tree suite for homeowners. It provides a simple way to determine current and future benefits of existing and planned trees on your property. With inputs of species, location, tree size, and condition, i-Tree will quantify benefits related to greenhouse gas mitigation, air quality improvements, and stormwater interception. A dollar value of each of these over time is also calculated.
This is also a great tool for determining what species to plant, and where to plant it. Use this in combination with tree species selection tools to determine what would perform best on your property.
Example:
I utilized i-Tree Design to determine the projected benefits for trees at a sample property in northeast Wisconsin. Using the tool, I placed 4 trees – 2 swamp white oak (Quercus bicolor) and 2 Norway spruce (Picea abies). Using the tool, I placed them in locations where they would have the most benefit. The application can also model tree canopy growth over time so that you can estimate if the trees you plant will outgrow their space. You can also draw the location of your house to help determine energy saving benefits to heated and air conditioned spaces.
Map of where I placed 4 trees using i-Tree Design. Darker green indicates planting locations with the greatest potential benefit.
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Graph of tree benefits over 20 years, expressed in dollars.
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i-Tree estimated that these four trees would provide $4,391 worth of benefits over 20 years. In year 20 alone they would provide $320 in benefits. The largest monetary benefit of these trees is energy savings in the Winter. These 4 trees together will save approximately $2,000 in Winter energy costs over 20 years, mainly through the blocking of prevailing winter winds. This doesn’t, however, include the cost of planting or maintaining the trees.
National Tree Benefit Calculator
The National Tree Benefit Calculator is another easy way for you to quickly determine tree value in monetary terms. You simply enter your zip code and then tree species and size and the calculator will determine the dollar savings associated with your trees on an annual basis. It’s a little quicker to use than i-Tree Design as it doesn’t require you to draw structures or place trees in specific locations. However, its estimates may be a little less accurate because of this as it doesn’t take individual property characteristics into account.
Summary of benefits calculated for a 6-inch American beech (Fagus grandifolia) in Chicago, Illinois.
Tree Appraisal
Tree appraisal is the most commonly accepted method to determine the value of trees. To properly assess trees for appraisal, one must have a solid background in arboriculture. But even if you are not an arborist you can determine a rough value by using the method outlined below. Tree appraisal methods accepted within the tree care industry are outlined in the Council of Tree and Landscape Appraisers Guide for Plant Appraisal, 9th edition.
Trunk Formula
The trunk formula is the best method for appraising individual trees that are considered too large to replace. Determination of the value of a tree is based on the cost of the largest commonly available transplantable tree and its cost of installation, plus the increase in value due to the larger size of the tree being appraised. These values are adjusted per the species of the tree and its physical condition and landscape placement.
Using the trunk formula, appraised value is determined through following calculation:
Appraised Value = Basic Tree Cost X Species% X Condition % X Location %
The basic tree cost is determined by comparing the cost of installing the largest commonly available transplantable tree of a high-quality species to the size of the appraised tree. This cost is typically published by a regional committee or state chapter of the International Society of Arboriculture.
Species ratings are based on species characteristics, without regard to condition or location. Factors considered in determining species ratings generally include environmental adaptability, biological traits, maintenance requirements and aesthetic characteristics. Species ratings are published by a regional committee as well. In Illinois these ratings can be found on the Illinois Arborist Association website.
Condition rating considers the condition of the tree's roots, trunk, scaffold branches, small branches and twigs and foliage and/or buds.
Location rating considers the overall site rating. This is then compared to the tree's individual placement in the landscape and its contribution to the landscape to determine an overall location rating.
For a detailed breakdown of the calculations involved in the trunk formula, check out our recent blog post on the topic.
Example
Your neighbor removed your 32-inch bur oak, which has a species rating of 90%. The tree was in excellent condition, with a rating of 24/32. You have a well-manicured landscape in an affluent neighborhood. The tree is well-placed in the back yard, where it provides energy-saving shade, wildlife habitat and decreased flooding impacts during heavy rains. These equate to a location rating of 80%.
In Illinois, this tree would be worth $9,700.
Market Approach
The market approach to tree appraisal is based on an investigation of property sales. One of the biggest benefits of having trees around your house is the real increase they bring to your property value. Trees, in conjunction with a properly cared for landscape, have been shown to increase property values by as much as 20%. Studies have shown how trees increase property value. You’ll have to hire a real estate appraiser (likely in conjunction with an arborist) to determine the value of your property, and the potential value impact of your trees. You can find a qualified real estate appraiser through the National Association of Real Estate Appraisers.
Income Approach
This approach is used when trees on a property serve an income based function, such as timber value or agriculture. This approach basically calculates the loss in income suffered by tree loss.
Summary
As you can see, there are several ways to determine the value of your trees in monetary terms. Some of these, like i-Tree can be utilized with little knowledge of trees and tree care. Others, such as tree appraisal, require a good amount of arboriculture knowledge. Use these tools to educate yourself and other on the benefits of existing and potential trees on your property.