Economic Outcomes of Urban Floodplain Restoration: Implications for Puget Sound

Brandon Parsons, PLA at American Rivers
June 10, 2020

A new report by American Rivers and ECONorthwest documents the economic outcomes of urban floodplain restoration on local and state budgets and tax revenue. Here is a link to the project fact sheet and full report.

A large portion of restoration funding for the Puget Sound is generated from tax revenue. Yet, preliminary estimates show that Washington State could lose $7 billion in revenue due to COVID-19 over the next four years – potentially resulting in deep cuts across the board, including a decrease in restoration funding as salmon and Southern Resident orca populations continue to decline and flood risk intensifies due to climate change.  While COVID presents unprecedented challenges, funding shortfalls are common in the state budget and competition for limited funding is fierce. Moving forward, it will be even more essential for policy makers to understand the revenue implications of their funding decisions and invest in programs that will accomplish multiple benefits while showing a high return on their investment.

Similarly, local communities must be increasingly strategic about how to invest their limited resources to provide the most benefit to their residents. In urban communities, river valleys and their historic floodplains are often the epicenter of competing interests. Decades of floodplain development have replaced healthy habitat with industrial, commercial and residential development – degrading the environment and cutting off many communities from their greatest natural resource. These impacts disproportionately affect low income communities where access to clean water and open space are already more limited. As our population continues to increase, it is critical that we restore what we can in our urban communities and conserve our remaining natural resources.

In their natural condition, floodplains and river corridors provide critical flood protection and are essential to the recovery of the Puget Sound salmon and the Southern Resident orcas that depend on them. They also provide important educational, recreational and health benefits if made publicly accessible. However, many communities get a substantial portion of their tax revenue from the development in their river valleys forcing a perceived trade-off between restoration and economic growth.

Development, restoration and local budgets are not in conflict. In fact, they present an opportunity for communities to achieve both financial and ecological outcomes through properly designed floodplain restoration projects.

American Rivers believes that it is essential, now more than ever, to understand the full economic outcomes of urban floodplain restorations so that families across the country can rediscover their rivers and communities can make smarter and more equitable land use decisions in the future.

A recent report on the Economic Outcomes of Urban Floodplain Restoration by American Rivers, ECONorthwest and Environmental Sciences Associates (ESA) showcases examples from around the country on the direct financial benefits of urban floodplain restoration on local and state budgets. During the course of this work we completed a systematic national and regional literature review and conducted interviews with prominent floodplain practitioners, policy makers, planners and developers from across the county on the impacts and lessons learned from urban floodplain restoration in their communities. Our report demonstrates that there is a substantial economic benefit when communities invest in floodplain restoration, through:

  • reduced flood risk and lower flood insurance rates;
  • increased property values;
  • increased high value development outside of the floodplain;
  • increased jobs and economic activity;
  • increased business and employee attraction and retention; and
  • increased tax revenue.

There has been a lot of great work done of the ecosystem services associated with floodplain restoration in the region. By examining how restoration impacts local and state budgets, we are hoping to fill in an important gap in our collective knowledge and contribute to a more complete understanding of the economic outcomes associated with urban floodplain restoration. Key findings from our research include:

  1. Restoring floodplains and promoting economic activity are not mutually exclusive.
  2. As the rivers are cleaned, people want to use them to live, work, and play.
  3. Successful urban floodplain restoration is designed to improve local ecosystems, reduce flood risk and improve quality of life.
  4. When planned appropriately, the benefits of floodplain restoration outweigh the costs, yielding positive net impacts on local and state budgets.
  5. Floodplain restoration can be another tool for city planners and developers as they make land-use decisions.

The goal of this report is to illuminate the economic outcomes of investing in urban floodplain restoration as we work to reduce our flood risk, restore salmon populations, increase equity and grow our economies in an increasingly constrained and stressed environment. Our intent is for the results of this study to serve as a resource for communities as they make decisions about the highest and best use of their land in a way that balances healthy, functional rivers and economic growth. Although the geographic focus is the Puget Sound, the findings of this report are broadly applicable to locations across the country with similar perceived tensions between floodplain restoration and urban development or communities interested in obtaining the highest economic return as they invest in their river corridors.

The full report can be located on American Rivers website HERE.

Over the next year, we will expand upon this work to develop specific case studies across the Puget Sound. In Phase 2, we will evaluate regional case studies to effectively quantify and communicate local floodplain benefits in terms that are compelling to local governments, decision-makers and business leaders. The case studies will further contribute to development of a benefit calculator tool that can be applied to existing and proposed floodplain projects calibrated to local conditions for waterways in the Puget Sound basin. The specific sites for case studies are still under review and will be selected with approval by the project steering committee and project partners.

The third and final phase will occur in late 2021 or 2022. At which time, we will finalize the benefit calculator tool and work closely with our partners to recommend policy and funding mechanisms to support more widespread urban floodplain restoration in communities across Puget Sound.

Please contact Brandon Parsons, PLA at for more information on this project:

Generous financial support for this project was provided by the King County Flood Control District, Watershed Resource Inventory Area (WRIA) #9, the Urban Waters Federal Partnership, The Russell Family Foundation and the Bullitt Foundation.