Voluntary Brownfields Certification Programs and Property Values

Sep 10, 2012
Voluntary Brownfields Certification Programs and Property Values
RFF Featureabandoned factory
September 10, 2012
Several states have enacted voluntary cleanup programs for brownfields—sites for which redevelopment is hindered because of possible threats to human health and the environment—to mitigate the potential negative environmental and social welfare effects that can result from neglecting such properties. Theoretically, these certification programs correct a market failure that causes insufficient redevelopment and reduces property values. Despite theoretical arguments, empirical research has found mixed evidence on the benefits of such programs.
Most previous studies have focused attention on the effects of cleanup and certification on the values of brownfields properties themselves. RFF Fellow Joshua Linn, in a new discussion paper, takes a broader view and estimates the effects of brownfields certification programs on nearby residential property values. He examines the Site Remediation Program in Illinois, finding that the program has increased property values by about two percent and that the effect appears to be stronger for low-price houses.