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The Effect of Voluntary Brownfields Programs on Nearby Property Values: Evidence from Illinois

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  • Linn, Joshua

    (Resources for the Future)

Abstract

Brownfields are properties for which 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 certification of a brownfield 0.25 miles away raises property values by about one percent. In aggregate, the program has increased nearby property values by about two percent.

Suggested Citation

  • Linn, Joshua, 2012. "The Effect of Voluntary Brownfields Programs on Nearby Property Values: Evidence from Illinois," RFF Working Paper Series dp-12-35, Resources for the Future.
    • Handle: RePEc:rff:dpaper:dp-12-35
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    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.

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    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

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