What are the Effects of Contamination Risks on Commercial and Industrial Properties? Evidence from Baltimore, Maryland
01.01.2005
Alberto Longo, Anna Alberini
Q51,Q53,R33
Contaminated sites registries,Distance to contaminated sites,Hedonic pricing model,Brownfields
Climate Change and Sustainable Development
Carlo Carraro
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.