118. Urban Trees

Summary

Podcast Summary: The Economics of Everyday Things – Episode 118 "Urban Trees"

Host: Zachary Crockett (Freakonomics Network)
Date: December 15, 2025

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Overview of the Episode

In this episode, Zachary Crockett explores the hidden economics, environmental benefits, and social importance of urban trees. Through interviews with urban foresters, economists, and social scientists, the podcast uncovers how trees are valued, who is responsible for their planting and maintenance, and the immense return on investment (ROI) they provide to cities and residents alike.

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Key Discussion Points & Insights

1. The Magic—and Economics—of Urban Trees

• Personal Story: The episode opens with Geoffrey Donovan’s story about a pagoda tree in Portland, originally brought home as a sapling from Nixon’s inauguration, now a towering presence that provides substantial "kaleidoscope of benefits." (01:12)
• Value Perception Shift: Donovan, a former U.S. Forest Service economist and now a consultant, says he sees trees as both beautiful and highly valuable economically.

  "People are willing to spend a lot of money on [trees] to plant and maintain." — Geoffrey Donovan (01:40)

2. How Cities Plan and Plant Urban Trees

• Canopy Cover Studies: Cities review aerial data to determine tree coverage, which can range from above 50% (Atlanta) to less than 10% (Phoenix). Seattle sits at an average of 33%. (03:39)
• Environmental Justice: Poor and minority communities often have less tree cover due to historic redlining and systemic racism, leading to higher heat exposure and lower quality of life.

  "Communities of color are more likely to live in hotter neighborhoods with fewer trees... So it creates an urgency for cities to plant trees with an environmental justice lens." — Jana Dilley (Urban Forester, Seattle), (05:11)

3. Complexity of Urban Tree Planting

• Planting Isn't Simple: Kathleen Wolfe highlights the complications: poor soil quality, rubble under sidewalks, irrigation challenges, and the need for careful species selection to avoid later problems.

  "Well, planting trees in cities is really complex." — Kathleen Wolfe (07:01)

• Cost Considerations: Tree planting can cost $1,000–$1,500 per street tree in Seattle due to site complexity and the need for larger, hardier species by roads (08:26). Parks can use smaller, cheaper trees.

• Long-Term Care and Liabilities: The costs to maintain, prune, and eventually remove aging street trees can be far higher, especially due to infrastructure conflicts (roots breaking sidewalks, trees growing into power lines). (09:10–09:33)

• Private and Residential Trees: In many cities, maintaining sidewalk and backyard trees falls on homeowners. Seattle's "Trees for Neighborhoods" helps plant 1,000 trees per year in target districts (10:46).

4. Placing Dollar Value on Trees

• Hedonic Pricing Model: Donovan used this method to analyze East Portland home sales: a single street tree increases a home’s sale price by over $7,000; it also raises the value of nearby homes by $13,000 cumulatively. (16:39–17:25)

  "Two thirds of those benefits spill over for free to their neighbors. And economists call that a positive externality." — Geoffrey Donovan (17:25)

• Impact on City Revenues: Street trees in Portland boost property tax revenues by $15.3 million—five times more than yearly tree maintenance costs. (17:54)

  "The investment is self-financing." — Geoffrey Donovan (18:13)

5. Broader Benefits Beyond Real Estate

• Energy Savings & Crime: Sacramento study – shade from street trees noticed to drop home summer electric bills by ~$25 each month. Houses with street trees also correlate with less crime, counteracting the so-called "broken windows" effect. (18:57)

  "Trees, particularly mature trees, send the opposite signal [of disorder]." — Geoffrey Donovan (18:57)

• Retail Benefit: Kathleen Wolfe found shoppers are willing to pay 9–12% more in retail districts with tree canopies, associating treed districts with better merchants and experiences. (19:38)

6. Environmental and Health Impacts

• Stormwater, Air, Carbon: Tools like iTree quantify that a single mature tree can deliver hundreds of dollars’ worth of stormwater mitigation, air pollution removal, and energy savings over 20 years.

  "Seattle's urban forest removes about 725 metric tons of pollution a year at a value of $5.6 million." — Jana Dilley (21:30)

• US Total: The USDA reports America’s urban forests provide $18 billion/year in environmental benefits. (22:01)
• Health Outcomes: Trees filter air and water, cool cities, reduce stress, and are associated with better birth weights and fewer heart attacks. (22:15)
• Loss = Health Harm: Donovan’s study of the emerald ash borer pest found that tree loss led to 22,000 additional respiratory and cardiovascular deaths across 15 states. (23:18)

  "In the wake of all these trees dying, people died too." — Geoffrey Donovan (23:30)

7. The Decline of Urban Tree Cover & The Case for Investment

• Annual Losses: Urban tree cover is declining by approximately 36 million trees per year due to urban expansion and development. (23:39)
• ROI on Trees: Donovan stresses the overwhelming cost-benefit of urban trees.

  "All those benefits certainly far outweigh any costs you might have." — Geoffrey Donovan (24:02) "The ROI on a tree is pretty damn good." — Zachary Crockett (24:20)
  "Oh, it's preposterous." — Geoffrey Donovan (24:24)

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Memorable Quotes

• On Urban Forestry's Diversity Needs:

  "It's kind of like diversifying your stock portfolio. You don't want to put all your chips on one tree." — Zachary Crockett (06:10) "That's right." — Jana Dilley

• On the Pleasure of Economic Models:

  "Is ‘hedonic’ pricing a reference to some kind of pleasure?" — Zachary Crockett (24:52) "Sadly, no. Applying hedonic models has never made me particularly giddy." — Geoffrey Donovan (24:54)

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Timestamps for Important Segments

• 01:12–02:33: Geoffrey Donovan on the origins and economic perspective of a single urban tree
• 03:07–05:40: Jana Dilley on city planning, environmental justice, and redlining’s legacy
• 07:01–08:26: Kathleen Wolfe explains complications of urban tree planting
• 08:26–09:33: Cost breakdown of planting vs. maintaining city trees
• 16:03–17:54: Donovan's real estate pricing study (hedonic pricing), externalities, municipal tax impacts
• 18:57–20:10: Broader social and retail benefits (crime, shopping behavior)
• 20:22–22:01: Environmental benefits (stormwater, air, carbon sequestration) and valuation tools
• 22:15–23:30: Public health outcomes related to tree cover, including case studies of pest-related loss
• 24:02–24:24: Donovan and Crockett discuss the vast ROI on urban trees

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Conclusion

Crockett and his guests make a compelling case: trees are not just aesthetic improvements but vital economic assets, offering extraordinary returns in property value, public health, climate resilience, and social well-being. Although urban tree cover is currently in decline, the evidence presented suggests that investing in urban trees is one of the most cost-effective and beneficial strategies for cities—and individuals—looking to improve their environments and economies.

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For listeners who want the big ideas without the science jargon, this episode’s takeaway is clear: planting and maintaining urban trees is a lot more complex—and rewarding—than it might look from the sidewalk.

Transcript

[A]

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In Geoffrey Donovan's neighborhood in Portland, Oregon, there's a beautiful pagoda tree. It's around 50 years old and it towers above the homes on the street.

[C]

There was a little seedling brought home from Richard Nixon's inauguration, and it's been planted opposite my house. That's one tiny sapling that somebody probably carried home on a plane with them. They put it in the ground, and 50 years later, it's providing this kaleidoscope of benefits. It's just magical.

[B]

It's one of more than 4 million trees in Portland's urban landscape. They're beautiful to look at, but they're also a valuable resource.

[C]

What do I see when I look at a tree? Well, I still see it as a beautiful thing. You know, I'm still technically human, but I also see something that people are willing to spend a lot of money on to plant and maintain.

[B]

Donovan is the owner of Ash and Elm, a tree consultancy. Before that, he spent 25 years working as an economist for the U.S. forest Service.

[C]

What I'm trying to do is quantify the benefits of urban trees. There's the classic dilemma in economics. You know, if you can't count it, it doesn't count. What I'm trying to do is count it. So when a city government is deciding on its budget, it's not just thinking about roads and things like that. It also thinks about the benefits that trees. When you start doing cost benefit analysis on trees, it becomes laughable. The benefits to the city are so much higher, often orders of magnitude higher.

[B]

Than the costs for the Freakonomics radio network. This is the economics of everyday things. I'm Zachary Crockett. Today, urban trees. There are an estimated 5.5 billion trees in cities across the U.S. they line commercial corridors, parks, busy intersections, and residential streets. And they come in all shapes, sizes and species. Maples, sweet gums, palms, firs, and pines.

[D]

Trees really are part of the infrastructure of a city.

[B]

That's Jana Dilley. She's an urban forester for the city of Seattle, working under Seattle Public Utilities. She's one of many people who who work together to plant new trees in the city each year.

[D]

In Seattle, it's not just Seattle public utilities. There are eight other departments that also work on trees. The Parks Department takes care of trees and parks property. The Department of Transportation takes care of trees along streets. We are really one big family when it comes to maintaining an urban forest.

[B]

Every city has its own system for deciding where to plant trees on its streets. Sometimes it's up to city officials. Other times there's collaboration with local forestry nonprofits and advocacy groups. But the process often begins with a review of the canopy cover, an aerial analysis that shows the percent of the city that is covered in trees. Some cities, like Atlanta, have over 50% tree coverage. Others, like Phoenix, have less than 10%. At 33%, Seattle is right around average. But this data only tells people like Dilley so much. To really understand the city's need for trees, she has to look at neighborhood level data specifically to do with exposure and heat.

[D]

So in Seattle, we asked volunteers to go around the city at a set time and day and take temperature readings from a number of different places. And when you map those temperature readings out, it shows us where in the city it's hottest and where it's coolest. In Seattle, we found at least a 17 degree temperature difference between the hottest and coolest areas. We know that planting trees to reduce heat is important because high heat events have a big impact on human health. Damage to roads, infrastructure, power outages, lower quality of life and increased drought, increased water use, and stress on wildlife populations.

[B]

Poorer neighborhoods are often most in need of new trees.

[D]

As we designed cities over the past hundred years, we made a lot of choices about where we placed roads and how we built homes. And the redlining and racism that came with it shaped not just the homes and the roads, but but where we left space for trees. Communities of color are more likely to live in hotter neighborhoods with fewer trees. So it creates an urgency for cities to plant trees with an environmental justice lens.

[B]

Once specific sites for trees are identified, it's not as simple as just plunking down any tree.

[D]

We need to think about the right tree species that's gonna fit in that site and survive in the location. And another thing we think about is how many trees of any particular variety are planted in the city. Because we don't want to over plant any one kind of tree if your city is planted with a wide variety of species and is more resilient to pests and diseases.

[B]

So it's kind of like diversifying your stock portfolio. You don't want to put all your chips on one tree.

[D]

That's right.

[B]

When a new tree is planted, it's important to think long term. The tree, like the world around it, changes considerably over time.

[D]

How tall and wide is that tree going to be, and is there going to be space for it in 20 years? Another important question is climate change. We're planting trees that we think will survive in the climate 50 years from now. We need to think about proximity to power lines and other electrical infrastructure. We need to think about other human needs, such as roads, sidewalks, buildings, solar panels.

[B]

After all of these considerations are cleared, it's time to plant the trees. And that can introduce a whole new set of issues.

[E]

Many people think about trees in cities. It's like, oh, you just go to Home Depot or someplace and you buy a tree and you put it in the ground. Well, planting trees in cities is really complex.

[B]

Kathleen Wolfe is a social scientist and was a researcher at the University of Washington School of Environmental and forest sciences research 28 years. She's also been involved in urban tree plantings in Seattle. And she says the process comes with a lot of headaches.

[E]

The city will cut the sidewalk to create the space to plant the trees. And then once you remove that paving, you find horrible fill, rock, rubble, bricks, all sorts of stuff that people used before just to fill that. Then you have to think about soils. The soils are horrible. They have to think about water infrastructure to make sure that the trees are watered routinely.

[B]

So who pays for trees on public city streets?

[E]

Typically, cities will cover some of the costs because many of them are pursuing additional canopy goals.

[B]

Jana Dilley says funding can also come from broader government budgets and environmental organizations. Any and all funding is welcome because planting trees can be quite expensive in a city like Seattle.

[D]

So the Department of Transportation in Seattle, when they planted tree, I believe that cost them about $1,000 to $1,500 per tree. And that's on the higher end, because there are a lot of complications that come in planting along the street. And we're also trying to plant trees there that are larger at the time we plant them and more resilient to the harsh environment along the side of a road. In the parks department, when we plant on parks land, that is cheaper because we're planting smaller trees that don't take as much site prep work.

[B]

But the cost of planting the trees is relatively small compared to the cost of maintaining them. All those trees that live for over 100 years need to be budgeted for long term. Their roots can cause millions of dollars worth of damage to sidewalks, introducing liability issues for the city. And the older they get, the more costs they incur above ground, too.

[D]

If you think of a tree along the street and say that tree is at the end of its life and it's got some decay and some risk factors, and we need to take that tree out, that may cost us quite a bit because we may need to close some lanes of traffic. We may need to bring in some special equipment. We may need to have special staff that can climb the tree to cut branches. We may need to work around power infrastructure and make sure that we're being safe there. If we're planting a tree underneath power lines that's too tall and eventually grows up and reaches those power lines, now we have to spend a lot of money coming out constantly to prune that tree back away from the lines so that we're not causing fires altogether.

[B]

The city of Seattle spends more than $20 million a year to plant and maintain its urban canopy. But not all urban trees are the responsibility of city government. In some places, the cost of maintaining sidewalk trees in residential neighborhoods falls on homeowners. Owners are also responsible for trees on their property, like those in backyards, although they sometimes get some help.

[D]

One thing we do in Seattle, where about two thirds of our urban forest is residential and privately owned, is that we have a residential tree planting program called trees for neighborhoods, where we plant 1,000 trees per year with residents in high heat and low canopy neighborhoods.

[B]

So if you think about trees as an economic asset, what makes them worth all these costs? How do you measure the return on investment of city greenery? That's coming up. The economics of everyday things is sponsored by Mint Mobile. Don't let big wireless and your overpriced phone bill suck the joy out of the holidays this year. Right now, all of Mint Mobile's unlimited plans are 50% off. You can get three, six or four or 12 months of unlimited premium wireless for 15 bucks a month. It's their best deal of the year and it makes it easy for you to give your expensive wireless bill the Scrooge treatment. Turn your expensive wireless present into a huge wireless savings future by switching to Mint Shop. Mint unlimited [e-mail] economics that's mintmobile.com limited time offer upfront payment of $45 for 3 month, $90 for 6 month or $180 for 12 month plan required $15 per month equivalent taxes and fees Extra initial plan term only over 35 gigabytes may slow when network is busy Capable device required availability, speed and coverage varies see mintmobile.com. The Economics of Everyday Things is sponsored by Acorns so many people are focused on where their money is today. Acorns is the financial wellness app that cares about where your money is going tomorrow and with Acorns potential screen you can find out what your money is capable of. Acorns is a smart way to give your money a chance to grow. Sign up now and Acorns will boost your new account with a $5 bonus. Investment join the over 14 million all time customers who have already saved and invested over $27 billion with Acorns. Head to acorns.com economics or download the Acorns app to get started. Paid non client endorsement compensation provides incentive to positively promote Acorns tier 2 compensation provided potential subject to various factors such as customers, accounts, age and investment settings. Does not include Acorns fees. Results do not predict or represent the performance of any Acorns portfolio. Investment results will vary. Investing involves risk. Acorns Advisors LLC, an SEC registered investment advisor. View important [e-mail] Economics. The Economics of Everyday Things is sponsored by Shopify. Running a small business can get overwhelming fast. It often feels like there's always a never ending to do list and another choice to make. Well. Shopify, the commerce platform behind millions of businesses and 10% of all e commerce in the US can help. Want to build a beautiful online store to match your brand's style? Shopify has got hundreds of ready to use templates. Plus Shopify's AI tools can help write product descriptions, page headlines and even enhance your product photography. Shopify can even help you create email and social campaigns wherever your customers are so you can get the word out. Without a marketing team with expertise in everything from managing inventory to international shipping to processing returns, make Shopify your commerce expert. If you're ready to sell, you're ready for Shopify. Turn your big business Idea into sales with Shopify on your side. Sign up for your $1 per month trial and start selling today at shopify.com go to shopify.com everyday things shopify.com everyday things. Most of the infrastructure in a city can be justified in economic terms. If you're building a bridge, you can track revenue from tolls. But urban trees aren't so straightforward. It's pretty easy to look at a nice leafy tree and see that it has aesthetic value. But how do you assess the environmental, behavioral, and health benefits that tree provides?

[C]

In my case, I have an economist toolbox.

[B]

As a natural resource economist Geoffrey Donovan has spent most of his career trying to answer this question.

[C]

I'm trying to put a market value on the benefits of urban trees. And those values can be from the intuitive to the less intuitive.

[B]

One way to think about the value of a tree is to measure its impact on real estate prices. Back in the summer of 2007, Donovan and his team went around East Portland and collected Data on nearly 3,500 trees in front of single family homes that sold in the previous 10 months. They noted the details of each property. Square footage, number of bedrooms and bathrooms, zip codes. And then they used a framework called hedonic pricing. It's a way to break down the value of a commodity, like a house, into individual attributes.

[C]

You're trying to decompose that house price into its constituent parts. So let's say a house cost $500,000. You're trying to say, well, you know, how much does each bedroom contribute to that house price? Each bathroom, how much does the size of the house contribute? You know, each square, how much does that make the house price go up? I found the value of urban trees quite high because it's an aggregate measure of all the values that urban trees provide.

[B]

Donovan found that a single tree in front of a home raised that home sale price by more than $7,000. Moreover, that same tree increased the value of adjacent homes within a 100 foot radius by a combined sum of around $13,000.

[C]

You have a tree outside somebody's home, they're 100% responsible for maintaining that tree, for planting it, for pruning it. But two thirds of those benefits spill over for free to their neighbors. And economics call that a positive externality.

[B]

That's not the only positive externality.

[C]

If something increases the sales price of a home, it's going to increase property tax revenues. Right, because property tax revenues are a function of sales price.

[B]

In that same study, Donovan estimated that Portland street trees were increasing property Tax revenues to the tune of $15.3 million, about five times more than the homeowners spent annually on maintaining them. It was an indication that urban trees paid for themselves many times over.

[C]

I've talked to city councils about this, and they get very interested when you mention that finding. If you were advocating for the city to spend things on libraries, on education, on whatever it may be, it's not often that you can make a credible argument that the investment is self financing.

[B]

But Donovan says that real estate value and property tax revenue are just one small part of a tree's benefits. In Sacramento, he found that the shade provided by certain street trees reduced a home's electric bill by an average of around $25 during the summer months. And in a separate study, he also looked into less intuitive behavioral benefits.

[C]

You may be familiar with the broken windows hypothesis. It's a hypothesis in criminology, and it suggests that neighborhoods with signs of disorder. So broken windows, graffiti, garbage, they send a subliminal signal to a criminal that if they were to commit a crime, they're less likely to be seen, they're less likely to be caught. Trees, particularly mature trees, send the opposite signal. We found if a house had street trees, that was always associated with reduced crime.

[B]

Kathleen Wolf, the environmental researcher at the University of Washington, found that stores in retail districts have similar behavioral benefits.

[E]

We evaluated how shoppers responded to trees in business districts and in several CITIES in the U.S. people judge that the merchants in the places having a tree streetscape were more knowledgeable and would be more pleasant. We also learned shoppers claim they would be willing to pay 9 to 12% more for equivalent goods and services in those places having a nicer canopy.

[B]

Then there are the environmental benefits that trees provide. Things like air pollution removal, carbon sequestration, lower energy costs, lower emissions, and reduction of stormwater runoff.

[E]

They intercept water. That means you have perhaps less water moving into your stormwater drain system. In a city, that's a cost savings because you don't have to upgrade the pipes and drains that are needed to collect that water. Air quality trees intercept microparticles, and if you reduce the amount of particles, a city is not paying as much. Potential fines for not meeting air quality standards.

[B]

The US Forest Service has a suite of tools called iTree that aims to place a value on these environmental benefits. You can even use it to estimate the total value of the benefits of a single tree. I punched in the details of a mature sweetgum tree in front of my mom's house in California. It's the kind that has those little spiky balls. According to Itree, it'll provide around $150 worth of value in stormwater mitigation, $200 in air pollution removal, and $300 in energy savings over 20 years across an entire city. This can add up again. Here's Jana Dilley, the urban forester who works with the city of Seattle.

[D]

Seattle last did a complete study of this type in 2012. Thus, the data is a little old, but still illustrative. The carbon storage benefits of Seattle's trees were worth over $11 million. We know that our urban forest removes about 725 metric tons of pollution from the environment every year at a value of $5.6 million. And we know that the reduced energy use that comes from the presence of trees saves Seattle about $6 million a year.

[B]

A 2018 report from the USDA placed the total environmental benefits of America's urban forests at $18 billion a year. But the most significant benefits urban trees provide are related to health.

[D]

They clean the air we breathe. They clean the water around us. They keep us cool on hot days. They reduce stress. We know that being among trees helps us focus and learn better. There have been studies that have linked living among healthy, mature trees to healthy birth weights for newborn babies and reductions in heart attacks.

[B]

These benefits can be hard to conceptualize on a daily basis, but they're most visible when trees are taken away. One case study that always comes up when you talk to tree researchers is that of the emerald ash borer, an invasive pest that that killed more than 100 million trees in the eastern and midwestern states. Geoffrey Donovan has studied the impact of that tree loss on human health.

[C]

The emerald ash borer. You can accuse it of many things, but not bigotry. You know it's going to kill the trees in rich neighborhoods, poor neighborhoods, white neighborhoods, minority neighborhoods. It doesn't care. And although that loss of trees is tragic, it's statistically a gift.

[B]

Donovan looked at data in 15 states and found that the loss of trees contributed to an additional 22,000 respiratory and cardiovascular related deaths compared to non affected areas.

[C]

In the wake of all these trees dying, people died too.

[B]

Despite all of these benefits, the latest data shows that urban tree cover is in decline at a rate of about 36 million trees per year. Many cities are expanding to accommodate growing populations, and developers often see old trees as a waste of valuable land. But Geoffrey Donovan says it's hard to find a greener investment.

[C]

Carbon sequestration, reduced cooling costs, increase house price, increased public health, improved crime reduced stormwater runoff. All those benefits certainly far outweigh any costs you might have.

[B]

So all things considered, the ROI on a tree is pretty damn good.

[C]

Oh, it's preposterous.

[B]

For the economics of everyday things. I'm Zachary Crockett. This episode was produced by me and Sarah Lilly and mixed by Jeremy Johnston. We had help from Galvin Abuaji. Is the hedonic and hedonic pricing a reference to some kind of pleasure?

[C]

Sadly, no. Applying hedonic models has never made me particularly giddy.

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