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

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

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.

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)

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)

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

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.

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.