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Calculating the Value of a Tree

Calculating the Value of a Tree

TreeScience During the month of August, more than two dozen ASLA members around the country will be finishing up our peer reviews of the newly completed draft of the 10th edition of The Guide for Plant Appraisal. Since 1997 ASLA has actively participated in the seven-member Council of Tree and Landscape Appraisers (CTLA), which is responsible for writing and updating The Guide. ASLA and our representative, Tim Toland, have been working with other members of CTLA to ensure that critical concepts are clearly presented in the document, which promises to be an invaluable resource for landscape professionals.

Although plant appraisals are conducted for many reasons—from compensation for a loss to justification for a maintenance budget, the appraisal process itself is based on the straightforward premise that plants (and landscapes) have value.  This simple statement can lead to a complicated and thoughtful process when attempting to calculate an actual dollar amount, especially once you start asking even a few qualifying questions.

  • Is the value of a tree affected by its location? Its overall health and structural soundness?
  • How does the value of a tree in a nursery container differ from the value of a tree planted or naturally growing on a property?
  • Do homeowners or public agencies value trees differently than loggers or real estate developers?

The authors of the 10th edition of The Guide for Plant Appraisal took on the herculean task of demystifying the processes and methods for answering questions like these.  The result is a practical reference guide for producing “reasonable and credible plant and landscape valuation” in a myriad of real-life circumstances.  Readers can expect to achieve a deeper understanding of the terminology and concepts common to both the plant appraisal and the larger appraisal community as well as an understanding of how to apply them in practice to make economically sound decisions.

When choosing a method to develop an opinion of the value of a tree, the new edition emphasizes the importance of correctly identifying the context of an appraisal assignment—the type of property (real estate or personal property) being appraised and the type of value (market or highest-and-best-use) being sought. One of the strengths of the updated edition is its consideration of many other types of value (such as amenity, ecosystem, and heritage values) and special appraisal situations (such as wetlands) that are governed by regulation and may require collaboration with other specialists.

Streetside location of trees as well as the shrub bed where replanting was considered (McPherson 2007)

As an illustration, let’s take a look at a published example of benefit-based tree valuation used to answer a street-tree maintenance question “Would it be more cost-effective to keep trees that are damaging a sidewalk or remove and replace them in a more suitable location nearby?”  Using only the cost-based appraisal approach to assess five street trees in Davis, it might appear that these trees have a substantial value (more than $8,000). However, if the costs of future sidewalk and curb repair are factored in, the trees could be considered to have a substantial negative value. But, when you also include the loss of environmental benefits over time and the upfront costs of removing and replanting these trees, it can be demonstrated that it makes more financial sense to leave the trees in place. The most powerful lesson comes when you compare the above scenarios to the cost-effectiveness of initially planting the trees in the nearby shrub bed—which could have resulted in a savings of $220 to $2,492 per tree!

NotetreeScience: above, beneath, and inside the plan view—a regular column on tree-related issues of interest to landscape architects in the Bay Area—is compiled by Laurel Kelly, ASLA, landscape architect at H.T. Harvey & Associates. Laurel is also an ISA-certified arborist and Registered Consulting Arborist® (email: laurel-kelly@att.net).

For more information about benefit-based tree valuation, see an article cited in the 10th edition of The Guide for Plant Appraisal:  McPherson, E. G. “Benefit-Based Tree Valuation.” Arboriculture & Urban Forestry 33.1 (2007): 1-11, or a related presentation by Dr. McPherson Benefit-Based Tree Appraisal is available.  The 9th edition of The Guide for Plant Appraisal and the associated Workbook are available from the International Society of Arboriculture (ISA). The regional supplement for California, Species Classification and Group Assignment, is available from the Western Chapter of the ISA.

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