Funding and Valuation

Because trees can live for decades, funding for urban forests requires long-term planning. It should incorporate the costs of tree care and staffing.⁹² Successful cities combine multiple funding and financing tools to support the urban forest.^{88, 94}

Municipal funding for urban forests can come from diverse sources, such as:

1. Municipal budget allocation. For example, some cities choose to allocate a portion of tax proceeds from real estate taxes to tree management. The cost of tree planting can also be included in municipal bonds for specific improvement projects, like street repairs.⁸⁶
2. Regulatory fees. Cities can apply proceeds from the enforcement of municipal codes or policies related to zoning or tree protection (such as permits outlining tree removal and replacement). When landowners fail to comply, the permit holder may be required to pay a fine.⁸⁸
3. Partnerships. Both public-private and intergovernmental partners can pool resources for a common goal. Private donations, sponsorships, and endowments may also provide supplemental resources.⁹¹

(Source: McDonald et al., 2017; VCL, n.d.; Knuth, 2005)

Incentives can motivate residents, the private sector, NGOs, and communities to protect, manage, or expand the urban forest.⁸⁸ Examples of such incentives includes:

• Fast-tracking of permits for development
• Exemption from taxes or refunds/waivers for private landowners to reward tree planting or protection of standing trees
• Provision of grants and loans for forest projects on private lands, when funding is available

(Source: Knuth, 2005)

Some cities utilize business improvement districts (BIDs), areas in which businesses voluntarily pay a levy in order to fund supplemental services such as landscaping, street cleaning, and safety, in the BID. The services are implemented by a non-profit partner, designed to retain businesses and attract people to the area.⁹² Such a program could provide funding for street tree plantings and maintenance.

It may be possible to recoup some costs of urban forest management. For example, reutilization and sale of waste wood from urban trees can create a revenue stream while diverting materials from landfills.⁹⁰ Damaged or dying trees may be turned into commercial lumber or mulch.⁹⁰

The importance of assessing value

Urban forests are often considered a type of natural capital, or element of nature that generates value for humans either directly or indirectly.⁹³ Natural capital can be valued in both monetary and non-monetary terms.⁸⁷

Economic valuation of urban forests may help decision-makers, city leaders, businesses, private property owners, and others to understand their benefits and costs.³⁰ When the benefits of urban forests are not valued or understood by decision-makers, businesses, and residents, it may be difficult to prioritize their funding or management, especially in low- or middle-income countries with many urgent planning priorities.⁸⁵