FEEM working papers "Note di lavoro" series
2005 .111

What are the Effects of Contamination Risks on Commercial and Industrial Properties? Evidence from Baltimore, Maryland


Authors: Alberto Longo, Anna Alberini
Series: Climate Change and Sustainable Development
Editor: Carlo Carraro
Type: Journal
Keywords: Contaminated sites registries,Distance to contaminated sites,Hedonic pricing model,Brownfields
JEL n.: Q51,Q53,R33
JEL: Journal of Environmental Planning and Management
Pages: Vol. 49, No. 5, pp. 713-737
Date: 09/2006

Abstract

Using the hedonic pricing approach, we investigate how the information released on public registries of contaminated and potentially contaminated sites affects nearby commercial and industrial properties in Baltimore, Maryland. We find that commercial and industrial properties are virtually unaffected by proximity to a site with a history of contamination. Knowing that the site is no longer considered contaminated does not have a rebound effect on property prices either. We also find that urban economic development policies, such as Empowerment Zones and Enterprise Zones, have little effect on property values. In sum, brownfield properties in Baltimore are not particularly attractive investments for developers, and there is little potential for self-sustaining cleanup based on appropriate fiscal incentives, such as Tax Increment Financing. It is doubtful that "one size fits all" measures to encourage the cleanup of contaminated sites can be successful in this context.

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