Welcome to our new series ECON: 901. These publications will delve into economic subjects close to home where we live, work, and play. Please feel free to provide feedback or suggestions for any local topics that could be worthwhile to explore (IMG@dwassetmgmt.com). After all, these pieces are for you, written by one of you.
Like any major city, Memphis has challenges. Among the two most prominent issues are lack of economic progress and the health of its citizens. To believe that these areas are not intertwined is taking a too narrow a view. Poverty leading to deteriorating health resulting in the disenfranchisement of some of the populace is a better embodiment of our reality. If the root causes of our difficulties overlap, then we should advocate for more robust solutions. The answer is that Memphis is in dire need of more green space. Memphis has a few great parks. Shelby Farms, one of the country’s largest urban parks, has undergone a fantastic transformation. Tom Lee Park welcomes one hundred thousand plus visitors every year. Overton Park is well known for its old growth forest and place in the annals of American history thanks to the Citizens to Preserve Overton Park winning a historic Supreme Court case that prevented I-40 from bisecting it.¹ Outside of these examples, Memphis leaves a lot to be desired in terms of green space.
The Trust for Public Land pegs Memphis as the 91st ‘best’ large city for parks.² Even including Shelby Farms, Memphis ranks near the bottom for parkland as a percentage of city area. This ranking finds our city below Detroit and above Laredo, Texas. Digging deeper reveals that this is not by chance. Low population density certainly doesn’t help but a more significant reason is lack of investment both from an organizational and financial standpoint. Memphis abolished its Parks Commission in 2000 and parks maintenance is split between two agencies which reduces efficiency by increasing complexity. Financially, in 2014 research found that Memphis parks and recreation program spends only $47 per resident for its parks and recreation which is under two-thirds of the national big-city median of $73.³ When comparing total city spending to peer cities, Memphis fares even worse allotting just $43 versus an average of $91.
²https://parkscore.tpl.org/rankings_advanced.php#sm.001do5cdi1bwef68vvc18hpj2cmfs ³https://www.tpl.org/sites/default/files/files_upload/ccpe-memphis-parks-report.pdf Source: https://www.tpl.org/sites/default/files/files_upload/ccpe-memphis-parks-report.pdf
We should care about these circumstances because parks are tailor made to help alleviate some of our most pressing problems. Economic Impact Memphians can use any economic positives that it can get. In 2018 the University of Memphis published a report stating that Memphis is the second highest rate of poverty among metro areas with greater than 1 million people. According to Kiplinger Memphis ranks 85th out of 100 cities in terms of highest home prices.4 The economic impact of parks has been well-documented and results in positive economic benefits. Research has pointed to a 5% increase in property values for homes within 500 feet of a park as a conservative estimate.5 For larger destination-style parks the economics get much more attractive. The transformation of Shelby Farms is estimated to create an additional ~$7 million in economic benefits derived from increased jobs, concessions, and overall visitor spending. Of this amount, nearly $1 million will be collected in tax revenue which can then be reinvested in the local community. Property wise, an expected $66 million in increased property value can be attributed to Shelby Farms and the associated Greenline network.6 Health Wallethub recently placed Memphis as the 3rd fattest city in the US.7 Other ‘contenders’ on this list can be found on the poverty list mentioned earlier. Research backs up the thinking that, in the US, lower-income people tend to have higher rates of obesity, sedentariness, and diabetes. The American Journal of Preventative Medicine notes that that “easy access to a place to exercise results in a 5.1 percent median increase in aerobic capacity, along with weight loss, a reduction in body fat, improvements in flexibility, and an increase in perceived energy.”8 4https://www.kiplinger.com/tool/real-estate/T010-S003-home-prices-in-100-top-u-s-metro-areas/index. php 5https://conservationtools.org/guides/98-economic-benefits-of-parks 6Younger Associates, “The Economic Impact and Significance Of Shelby Farms Park,” (March 3, 2014) 7https://wallethub.com/edu/fattest-cities-in-america/10532/ 8Emily B. Kahn et al. and the Task Force on Community Preventive Services, “The Effectiveness of Interventions to Increase Physical Activity,” American Journal of Preventive Medicine 22, no. 4S (2002)
Source: http://diabetes.diabetesjournals.org/content/60/11/2667 The fact that under half of those most in need of parks have no easy access to them furthers our claim that Memphians deserve not just great parks but more in general. Other benefits also manifest themselves with a flourishing park system that are less quantifiable. Environmentally, parks improve air quality, reduce storm-water runoff, and reduce carbon dioxide. Mental health increases by being outside. Evidence is mounting on the positive effects that green space has on community cohesion in that public parks produce social interaction among different demographic groups. To be sure, local groups are actively working to improve our city’s landscape. Shelby Farm Park Conservancy has done a fantastic job both in major improvements to the park itself and by creating the Greenline, a 10.65-mile urban trail that is not even supported by tax dollars.9 The Wolf River Conservancy is furthering the pace of connectivity through its master plan of developing the Greenway to run through its 853 acres of land (larger than NYC’s Central Park) that would allow a Memphian to travel from Collierville to the Wolf River Harbor. Despite the noble efforts of these groups, Memphis needs more. Local government needs to increase resources as stated earlier at the least to determine a single unifying vision. On an individual level, a 2014 report by the Trust for Public Land identified the need for the “silent majority…to constructively speak up” so Memphis can move to the ‘next level.’10 Research has shown that green space increases property values and improves physical health among other less tangible benefits such as better mental health and enhanced community cohesion. Indeed, parks are sparks. 9http://www.shelbyfarmspark.org/shelby-farms-greenline 10https://www.tpl.org/sites/default/files/files_upload/ccpe-memphis-parks-report.pdf
IMPORTANT NOTES AND DISCLOSURES This piece is being made available for educational purposes only and should not be used for any other purpose. Certain information contained herein concerning economic trends and performance is based on or derived from information provided by independent third-party sources. Duncan Williams Asset Management believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. Opinions expresses in these materials are current only as of the date appearing herein and are subject to change without notice. The information herein is presented for illustration and discussion purposes only and is not intended to be, nor should it be construed as, investment advice or an offer to sell, or solicitation of an offer to buy securities of any type of description. Nothing in these materials is intended to be tax or legal advice, and clients are urged to consult with their own legal advisors in this regard.