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Environmental economics: WAPOA measures value of clean water

IDEAL TOWNSHIP--The water quality in Minnesota lakes has a measurable economic benefit, members of the Whitefish Area Property Owners Association learned at the organization's annual meeting.

Destyn St. Hilaire splashes with his friends at Whipple Beach in Baxter Tuesday. (Brainerd Dispatch/ Steve Kohls) Gallery
Destyn St. Hilaire splashes with his friends at Whipple Beach in Baxter Tuesday. (Brainerd Dispatch/ Steve Kohls) Gallery
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IDEAL TOWNSHIP-The water quality in Minnesota lakes has a measurable economic benefit, members of the Whitefish Area Property Owners Association learned at the organization's annual meeting.

Patrick Welle, a professor emeritus from Bemidji State University, studied the relationship extensively and published several papers on the topic. Welle told the group at its June 11 meeting his studies found that not only is the clarity of water a factor in lakeshore property value, it's actually the "most important explanatory factor."

"Economics shows that it is much cheaper to do prevention effectively than it is to try to do mitigation after the fact," Welle said. "And some damages are irreversible."

A study Welle and three others produced in 2003 examined the effect of water quality on lakeshore property values within the Mississippi River headwaters region. This included lakes in Cass, Crow Wing, Morrison and Aitkin counties. The study was later updated with more recent data and resulted in similar conclusions.

"Water quality has a positive relationship with property prices," the 2003 study stated. "Implicit prices of water quality was determined and calculations were made to illustrate the changes in property prices on the study lakes if a 1-meter change in water clarity would occur. Expected property price changes for these lakes are in the magnitude of tens of thousands to millions of dollars. The evidence shows that management of the quality of lakes is important to maintaining the natural and economic assets of this region."


Tom Watson, president of WAPOA, told the more than 100 people in the Ideal Town Hall that Welle's findings show the importance of protecting water quality in the Whitefish Chain of Lakes and beyond.

Using recent data from Crow Wing County and University of Minnesota Extension sources, Watson sought to make the case stronger protections must be pursued to protect an economically valuable region of the county.

According to Watson's analysis based on 2014 property value assessments, the economic market value in communities represented by northern Crow Wing County lakes associations is nearly 30 percent of market value in the entire county. This includes the communities of Crosslake, Fifty Lakes, Manhattan Beach, Timothy Township, Jenkins Township, Ideal Township, Mission Township and Pelican Township. On the non-commercial seasonal residential recreational properties, 48.1 percent of those in the county are in these areas.

According to 2008 data from the University of Minnesota Extension, tourism and second homeownership spending in Crow Wing County is the third highest outside of the Twin Cities metro area.

Watson said these figures are strong evidence of a need to manage water quality and prevent the spread of aquatic invasive species.

"Realtors have stated that the first questions people ask when they're looking at lakefront property is, 'Does it have zebra mussels? Does it have milfoil?'" Watson said. "We need to get the attention of elected officials. They have a major asset here."

This idea is central to some of the initiatives the lakes associations pursue, particularly those focused on natural shorelines. Runoff from manicured lawns along shorelines can increase five to 10 times as compared to a natural shoreline, the Minnesota Department of Natural Resources reports, and this runoff carries with it phosphorous, sediment, toxic chemicals, pesticides and other pollutants with a negative impact on water quality.

Welle said despite the strong correlation between water quality and higher property values, a wrinkle in the data shows there is also a relationship between developed, manicured lawns and higher sale prices for lakeshore properties. Welle said finding a way to reverse these contradictory circumstances would be key to ensuring lakes area economies continue to benefit from high quality waters.


Welle noted lakes with better water quality and healthier ecosystems have the capacity to more effectively resist AIS as well. He cautioned against what has happened to the Great Lakes, where the presence of AIS leads to $5 billion in economic losses annually.

"Ten or 20 years from now, we're not going to have the same quality of lake," Welle said. "It's not going to be as valuable as it could be. ... It is not going to be as good for the economy locally."

CHELSEY PERKINS may be reached at 218-855-5874 or chelsey.perkins@brainerddispatch.com . Follow on Twitter at www.twitter.com/DispatchChelsey .

Chelsey Perkins is the community editor of the Brainerd Dispatch. A lakes area native, Perkins joined the Dispatch staff in 2014. She is the Crow Wing County government beat reporter and the producer and primary host of the "Brainerd Dispatch Minute" podcast.
Reach her at chelsey.perkins@brainerddispatch.com or at 218-855-5874 and find @DispatchChelsey on Facebook, Twitter and Instagram.
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