IDEAS home Printed from https://ideas.repec.org/a/eee/juecon/v78y2013icp1-18.html
   My bibliography  Save this article

The effect of voluntary brownfields programs on nearby property values: Evidence from Illinois

Author

Listed:
  • Linn, Joshua

Abstract

Brownfields are properties whose redevelopment is hampered by known or suspected contamination and by concerns about associated liability. Because failing to redevelop brownfields may negatively affect welfare and the environment, a number of states have created voluntary programs to reduce liability risks and encourage redevelopment of brownfields. For clean or remediated properties, the state certifies that owners of such sites are not subject to federal or state liability under certain conditions. Certification could increase nearby property values because of decreased contamination risk and amenities associated with redeveloping the brownfield. This paper focuses on the Site Remediation Program in Illinois, and estimates the effect of brownfields certification on nearby property values. Employing several strategies to account for unobserved and time-varying variables that may be correlated with certification, I find that the entry and certification of a brownfield 0.25miles away raises the value of a property by about 1% compared to an otherwise identical property.

Suggested Citation

  • Linn, Joshua, 2013. "The effect of voluntary brownfields programs on nearby property values: Evidence from Illinois," Journal of Urban Economics, Elsevier, vol. 78(C), pages 1-18.
    • Handle: RePEc:eee:juecon:v:78:y:2013:i:c:p:1-18
    DOI: 10.1016/j.jue.2013.04.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0094119013000351
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jue.2013.04.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kris Wernstedt & Peter Meyer & Anna Alberini & Lauren Heberle, 2006. "Incentives for private residential brownfields development in US urban areas," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 49(1), pages 101-119.
    2. Esteban Rossi-Hansberg & Pierre-Daniel Sarte & Raymond Owens, 2010. "Housing Externalities," Journal of Political Economy, University of Chicago Press, vol. 118(3), pages 485-535, June.
    3. Anna Alberini, 2007. "Determinants And Effects On Property Values Of Participation In Voluntary Cleanup Programs: The Case Of Colorado," Contemporary Economic Policy, Western Economic Association International, vol. 25(3), pages 415-432, July.
    4. Robin R. Jenkins & Elizabeth Kopits & David Simpson, 2006. "Measuring the Social Benefits of EPA Land Cleanup and Reuse Programs," NCEE Working Paper Series 200603, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Sep 2006.
    5. Gamper-Rabindran, Shanti & Timmins, Christopher, 2013. "Does cleanup of hazardous waste sites raise housing values? Evidence of spatially localized benefits," Journal of Environmental Economics and Management, Elsevier, vol. 65(3), pages 345-360.
    6. Daniel P. McMillen, 2012. "Repeat Sales as a Matching Estimator," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 40(4), pages 743-771, December.
    7. John Y. Campbell & Stefano Giglio & Parag Pathak, 2011. "Forced Sales and House Prices," American Economic Review, American Economic Association, vol. 101(5), pages 2108-2131, August.
    8. J.J. Prescott & Jonah E. Rockoff, 2011. "Do Sex Offender Registration and Notification Laws Affect Criminal Behavior?," Journal of Law and Economics, University of Chicago Press, vol. 54(1), pages 161-206.
    9. Patrick Bajari & Jane Cooley Fruehwirth & Kyoo il Kim & Christopher Timmins, 2012. "A Rational Expectations Approach to Hedonic Price Regressions with Time-Varying Unobserved Product Attributes: The Price of Pollution," American Economic Review, American Economic Association, vol. 102(5), pages 1898-1926, August.
    10. Gibbons, Stephen & Machin, Stephen, 2005. "Valuing rail access using transport innovations," Journal of Urban Economics, Elsevier, vol. 57(1), pages 148-169, January.
    11. Jeffrey Zabel & Dennis Guignet, 2010. "A Hedonic Analysis of the Impact of LUST Sites on House Prices in Frederick, Baltimore, and Baltimore City Counties," NCEE Working Paper Series 201001, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Jan 2010.
    12. Michael Greenstone & Justin Gallagher, 2008. "Does Hazardous Waste Matter? Evidence from the Housing Market and the Superfund Program," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(3), pages 951-1003.
    13. Chang, Howard F. & Sigman, Hilary, 2007. "The effect of joint and several liability under superfund on brownfields," International Review of Law and Economics, Elsevier, vol. 27(4), pages 363-384, December.
    14. Zabel, Jeffrey E. & Guignet, Dennis, 2012. "A hedonic analysis of the impact of LUST sites on house prices," Resource and Energy Economics, Elsevier, vol. 34(4), pages 549-564.
    15. Ihlanfeldt, Keith R. & Taylor, Laura O., 2004. "Externality effects of small-scale hazardous waste sites: evidence from urban commercial property markets," Journal of Environmental Economics and Management, Elsevier, vol. 47(1), pages 117-139, January.
    16. Allen Blackman & Sarah Darley & Thomas P. Lyon & Kris Wernstedt, 2010. "What Drives Participation in State Voluntary Cleanup Programs? Evidence from Oregon," Land Economics, University of Wisconsin Press, vol. 86(4), pages 785-799.
    17. Hilary Sigman, 2010. "Environmental Liability and Redevelopment of Old Industrial Land," Journal of Law and Economics, University of Chicago Press, vol. 53(2), pages 289-306, May.
    18. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    19. Larry Dale & James C. Murdoch & Mark A. Thayer & Paul A. Waddell, 1999. "Do Property Values Rebound from Environmental Stigmas? Evidence from Dallas," Land Economics, University of Wisconsin Press, vol. 75(2), pages 311-326.
    20. Nancey Leigh & Sarah Coffin, 2005. "Modeling the relationship among brownfields, property values, and community revitalization," Housing Policy Debate, Taylor & Francis Journals, vol. 16(2), pages 257-280.
    21. Boyd, James & Harrington, Winston & Macauley, Molly K, 1996. "The Effects of Environmental Liability on Industrial Real Estate Development," The Journal of Real Estate Finance and Economics, Springer, vol. 12(1), pages 37-58, January.
    22. McMillen, Daniel P., 2008. "Changes in the distribution of house prices over time: Structural characteristics, neighborhood, or coefficients?," Journal of Urban Economics, Elsevier, vol. 64(3), pages 573-589, November.
    23. Lucas W. Davis, 2011. "The Effect of Power Plants on Local Housing Values and Rents," The Review of Economics and Statistics, MIT Press, vol. 93(4), pages 1391-1402, November.
    24. Patrick Bajari & Jane Cooley & Kyoo il Kim & Christopher Timmins, 2010. "A Theory-Based Approach to Hedonic Price Regressions with Time-Varying Unobserved Product Attributes: The Price of Pollution," NBER Working Papers 15724, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lucija Muehlenbachs & Elisheba Spiller & Christopher Timmins, 2015. "The Housing Market Impacts of Shale Gas Development," American Economic Review, American Economic Association, vol. 105(12), pages 3633-3659, December.
    2. Klusáček, Petr & Alexandrescu, Filip & Osman, Robert & Malý, Jiří & Kunc, Josef & Dvořák, Petr & Frantál, Bohumil & Havlíček, Marek & Krejčí, Tomáš & Martinát, Stanislav & Skokanová, Hana & Trojan, Ja, 2018. "Good governance as a strategic choice in brownfield regeneration: Regional dynamics from the Czech Republic," Land Use Policy, Elsevier, vol. 73(C), pages 29-39.
    3. Kousky, Carolyn & Walls, Margaret, 2014. "Floodplain conservation as a flood mitigation strategy: Examining costs and benefits," Ecological Economics, Elsevier, vol. 104(C), pages 119-128.
    4. Peter M. Schwarz & Gwendolyn L. Gill & Alex Hanning & Caleb A. Cox, 2017. "Estimating The Effects Of Brownfields And Brownfield Remediation On Property Values In A New South City," Contemporary Economic Policy, Western Economic Association International, vol. 35(1), pages 143-164, January.
    5. Margaret Walls & Carolyn Kousky & Ziyan Chu, 2015. "Is What You See What You Get? The Value of Natural Landscape Views," Land Economics, University of Wisconsin Press, vol. 91(1), pages 1-19.
    6. Franco, Sofia F. & Cutter, W. Bowman, 2022. "The determinants of non-residential real estate values with special reference to environmental local amenities," Ecological Economics, Elsevier, vol. 201(C).
    7. Kamila Turečková & Stanislav Martinát & Jan Nevima & František Varadzin, 2022. "The Impact of Brownfields on Residential Property Values in Post-Industrial Communities: A Study from the Eastern Part of the Czech Republic," Land, MDPI, vol. 11(6), pages 1-21, May.
    8. Kevin Haninger & Lala Ma & Christopher Timmins, 2017. "The Value of Brownfield Remediation," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(1), pages 197-241.
    9. Alberto Longo & Danny Campbell, 2017. "The Determinants of Brownfields Redevelopment in England," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(2), pages 261-283, June.
    10. Wang, Xiaohan & Yang, Mengjun, 2024. "The effect of soil pollution information disclosure on housing prices," China Economic Review, Elsevier, vol. 83(C).
    11. Dröes, Martijn I. & Koster, Hans R.A., 2016. "Renewable energy and negative externalities: The effect of wind turbines on house prices," Journal of Urban Economics, Elsevier, vol. 96(C), pages 121-141.
    12. Mark van Duijn & Jan Rouwendal & Richard Boersema, 2014. "Transformations of Industrial Heritage: Insights into External Effects on House Prices," Tinbergen Institute Discussion Papers 14-122/VIII, Tinbergen Institute.
    13. Green, T.L., 2018. "Evaluating predictors for brownfield redevelopment," Land Use Policy, Elsevier, vol. 73(C), pages 299-319.
    14. Ayoung Woo & Sugie Lee, 2016. "Illuminating the impacts of brownfield redevelopments on neighboring housing prices: Case of Cuyahoga County, Ohio in the US," Environment and Planning A, , vol. 48(6), pages 1107-1132, June.
    15. Thomas P. Lyon & Haitao Yin & Allen Blackman & Kris Wernstedt, 2018. "Voluntary Cleanup Programs for Brownfield Sites: A Theoretical Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 70(2), pages 297-322, June.
    16. Brad R. Humphreys & Adam Nowak, 2015. "Professional Sports Facilities, Teams and Property Values: Evidence from Seattle's Key Arena," Working Papers 15-06, Department of Economics, West Virginia University.
    17. Steve Gibbons & Stephan Heblich & Esther Lho & Christopher Timmins, 2016. "Fear of Fracking? The Impact of the Shale Gas Exploration on House Prices in Britain," SERC Discussion Papers 0207, Centre for Economic Performance, LSE.
    18. Oriyomi Modupe Okeyinka & Rana Khan & Chaminda Pathirage & Charf El Dine Mahammedi & Antony West, 2023. "A Critical Review of Developers’ Decision Criteria for Brownfield Regeneration: Development of the BRIC Index," Sustainability, MDPI, vol. 15(9), pages 1-25, April.
    19. van Duijn, Mark & Rouwendal, Jan & Boersema, Richard, 2016. "Redevelopment of industrial heritage: Insights into external effects on house prices," Regional Science and Urban Economics, Elsevier, vol. 57(C), pages 91-107.
    20. Humphreys, Brad R. & Nowak, Adam, 2017. "Professional sports facilities, teams and property values: Evidence from NBA team departures," Regional Science and Urban Economics, Elsevier, vol. 66(C), pages 39-51.
    21. Hitaj, Claudia & Lynch, Lori & McConnell, Kenneth E. & Tra, Constant I., 2018. "The Value of Ozone Air Quality Improvements to Renters: Evidence From Apartment Building Transactions in Los Angeles County," Ecological Economics, Elsevier, vol. 146(C), pages 706-721.
    22. Walsh, Patrick & Mui, Preston, 2017. "Contaminated sites and information in hedonic models: An analysis of a NJ property disclosure law," Resource and Energy Economics, Elsevier, vol. 50(C), pages 1-14.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Steve Gibbons & Stephan Heblich & Esther Lho & Christopher Timmins, 2016. "Fear of Fracking? The Impact of the Shale Gas Exploration on House Prices in Britain," SERC Discussion Papers 0207, Centre for Economic Performance, LSE.
    2. Phaneuf, Daniel J. & Liu, Xiangping, 2016. "Disentangling property value impacts of environmental contamination from locally undesirable land uses: Implications for measuring post-cleanup stigmaAuthor-Name: Taylor, Laura O," Journal of Urban Economics, Elsevier, vol. 93(C), pages 85-98.
    3. Lucija Muehlenbachs & Elisheba Spiller & Christopher Timmins, 2015. "The Housing Market Impacts of Shale Gas Development," American Economic Review, American Economic Association, vol. 105(12), pages 3633-3659, December.
    4. Robin R. Jenkins & Elizabeth Kopits & David Simpson, 2006. "Measuring the Social Benefits of EPA Land Cleanup and Reuse Programs," NCEE Working Paper Series 200603, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Sep 2006.
    5. Walsh, Patrick & Mui, Preston, 2017. "Contaminated sites and information in hedonic models: An analysis of a NJ property disclosure law," Resource and Energy Economics, Elsevier, vol. 50(C), pages 1-14.
    6. Kim, GwanSeon & Schieffer, Jack & Mark, Tyler, 2020. "Do superfund sites affect local property values? Evidence from a spatial hedonic approach," Economic Analysis and Policy, Elsevier, vol. 67(C), pages 15-28.
    7. Doron Lavee & Tomer Ash & Gilat Baniad, 2012. "Cost‐benefit analysis of soil remediation in Israeli industrial zones," Natural Resources Forum, Blackwell Publishing, vol. 36(4), pages 285-299, November.
    8. Thomas P. Lyon & Haitao Yin & Allen Blackman & Kris Wernstedt, 2018. "Voluntary Cleanup Programs for Brownfield Sites: A Theoretical Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 70(2), pages 297-322, June.
    9. Janet Currie & Lucas Davis & Michael Greenstone & Reed Walker, 2013. "Do Housing Prices Reflect Environmental Health Risks? Evidence from More than 1600 Toxic Plant Openings and Closings," NBER Working Papers 18700, National Bureau of Economic Research, Inc.
    10. Karen A. Sullivan, 2017. "Brownfields Remediation: Impact on Local Residential Property Tax Revenue," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 19(03), pages 1-20, September.
    11. Kim, GwanSeon & Schieffer, Jack & Mark, Tyler, 2016. "Do Superfund Sites Affect Local Property Values? Evidence from a Spatial Hedonic Approach," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235835, Agricultural and Applied Economics Association.
    12. Gabriel Ahlfeldt & Pantelis Koutroumpis & Tommaso Valletti, 2017. "Speed 2.0: Evaluating Access to Universal Digital Highways," Journal of the European Economic Association, European Economic Association, vol. 15(3), pages 586-625.
    13. Guoying Deng & Manuel A. Hernandez & Shu Xu, 2020. "When Power Plants Leave Town: Environmental Quality and the Housing Market in China," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 77(4), pages 751-780, December.
    14. Christian Almer & Stefan Boes & Stephan Nüesch, 2017. "Adjustments in the housing market after an environmental shock: evidence from a large-scale change in aircraft noise exposure," Oxford Economic Papers, Oxford University Press, vol. 69(4), pages 918-938.
    15. Grislain-Letrémy, Céline & Katossky, Arthur, 2014. "The impact of hazardous industrial facilities on housing prices: A comparison of parametric and semiparametric hedonic price models," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 93-107.
    16. Ahlfeldt, Gabriel M. & Nitsch, Volker & Wendland, Nicolai, 2019. "Ease vs. noise: Long-run changes in the value of transport (dis)amenities," Journal of Environmental Economics and Management, Elsevier, vol. 98(C).
    17. Aarland, Kristin & Osland, Liv & Gjestland, Arnstein, 2017. "Do area-based intervention programs affect house prices? A quasi-experimental approach," Journal of Housing Economics, Elsevier, vol. 37(C), pages 67-83.
    18. Chuanwang Sun & Xiaochun Meng & Shuijun Peng, 2017. "Effects of Waste-to-Energy Plants on China’s Urbanization: Evidence from a Hedonic Price Analysis in Shenzhen," Sustainability, MDPI, vol. 9(3), pages 1-18, March.
    19. Gamper-Rabindran, Shanti & Timmins, Christopher, 2013. "Does cleanup of hazardous waste sites raise housing values? Evidence of spatially localized benefits," Journal of Environmental Economics and Management, Elsevier, vol. 65(3), pages 345-360.
    20. John Braden & Xia Feng & DooHwan Won, 2011. "Waste Sites and Property Values: A Meta-Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 50(2), pages 175-201, October.

    More about this item

    Keywords

    Hedonic regression; Contamination; Voluntary cleanup programs;
    All these keywords.

    JEL classification:

    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:juecon:v:78:y:2013:i:c:p:1-18. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622905 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.