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Study finds substantial economic benefits from Whitefish, Flathead lakes

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Area researchers have found two clear western Montana lakes – Flathead and Whitefish – generate home values that result in upwards of $3 billion in property value and $25 million in property tax revenues for local and state governments.

The study was conducted by the University of Montana’s Flathead Lake Biological Station and the Whitefish Lake Institute.

“We sought to economically quantify the aesthetic benefits landowners derive from living on or near lakes with exceptional water quality,” said Nanette Nelson, an FLBS research economist and lead author of the study. “Our results suggest that highly desirable lakes like Flathead and Whitefish Lakes enhance surrounding property values, thereby contributing significantly to the local tax base and economy of both lake-based communities.”

The study dataset included over 7,000 arms-length sales transactions occurring within 2 km of Whitefish Lake and Flathead Lake between 2004 and 2018.

Results revealed a 254 percent or $1.3 million average premium for the same home on the lakefront of Whitefish Lake versus 2 km from the lake. Flathead Lake exhibited a 114 percent or $0.5 million average premium. Summing across all properties within 2 km of both lakes yielded aggregate premiums upwards of $3 billion.

The effect of Flathead Lake on surrounding lakefront parcels equaled $12 million to $17 million in property tax revenues, while Whitefish Lake generated $5 million to $8 million. This is important because in the state of Montana, over 94 percent of local government and school district tax collections are derived from property taxes.

“This study reveals the economic importance of maintaining water quality in our lakes,” said Lori Curtis, WLI science and education director and study co-author. “Scientists from the bio station and WLI conduct research and continuously monitor the health of the two lakes, engage students in water quality education and make recommendations to help citizens and leaders make informed resource management decisions.

“These study results provide us with an economic argument in communicating the significance of maintaining water quality and of our work,” she said.

The FLBS mission is to serve the Flathead Lake region, the state of Montana, the nation and the world by advancing cutting-edge research, monitoring, education and outreach platform for limnology, ecology and environmental science at Flathead Lake.

Founded in 2005, the Whitefish Lake Institute is committed to science, education and community stewardship to protect and improve Whitefish Lake and Whitefish-area water resources today and provide a collective vision for tomorrow.

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