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Determinants and Effects on Property Values of Participation in Voluntary Cleanup Programs: the Case of Colorado

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  • Anna Alberini

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Abstract

State Voluntary Cleanup Programs (VCPs) were established starting in the 1990s to encourage the environmental remediation and redevelopment of contaminated properties. These programs typically offer liability relief, subsidies and other regulatory incentives in exchange for site cleanup. This paper asks three questions: First, what type of properties are attracted to voluntary cleanup programs? Second, what is the interaction between these state programs and other incentives for remediation and economic development, such as Enterprise Zone and Brownfield Zone designations? Third, what is the effect of participation in the VCP on property values? We use data from Colorado’s VCP to answer these questions. We find that most of the properties enrolled in this program were not previously listed on EPA’s contaminated site registries, and that most applicants seek to obtain directly a “no further action†determination without undergoing remediation. The main determinants of participation are the size of the parcel and whether the surrounding land use is primarily residential, while other incentives have little effect. Properties with confirmed contamination sell at a 47% discount relative to comparable uncontaminated parcels, and participation tends to raise the property price, but this latter effect is not statistically significant. Taken together, these findings suggest that the participating properties are those with high development potential, and hint at the possibility that owners or developers may be seeking to obtain a clean bill of health from the State with only minimal or no cleanup efforts. Were these findings confirmed with data from other states, they would raise doubts about the effectiveness of voluntary programs in encouraging remediation and their usefulness in reversing some of the undesired effects of the Superfund legislation.

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Bibliographic Info

Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa06p126.

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Date of creation: Aug 2006
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Handle: RePEc:wiw:wiwrsa:ersa06p126

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  1. Alberto Longo & Anna Alberini, 2006. "What are the effects of contamination risks on commercial and industrial properties? evidence from Baltimore, Maryland," Journal of Environmental Planning and Management, Taylor & Francis Journals, Taylor & Francis Journals, vol. 49(5), pages 713-737.
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Cited by:
  1. Paolo Rosato & Anna Alberini & Valentina Zanatta & Margaretha Breil, 2008. "Redeveloping Derelict and Underused Historic City Areas: Evidence from a Survey of Real Estate Developers," Working Papers, Fondazione Eni Enrico Mattei 2008.60, Fondazione Eni Enrico Mattei.
  2. Anna Alberini & Dennis Guignet, 2008. "Voluntary Cleanups and Redevelopment Potential: Lessons from Baltimore, Maryland," Working Papers, Fondazione Eni Enrico Mattei 2008.87, Fondazione Eni Enrico Mattei.
  3. Linn, Joshua, 2012. "The Effect of Voluntary Brownfields Programs on Nearby Property Values: Evidence from Illinois," Discussion Papers, Resources For the Future dp-12-35, Resources For the Future.
  4. Anna Alberini & Margherita Turvani & Aline Chiabai & Stefania Tonin, 2007. "Public Policies for Contaminated Site Cleanup: The Opinions of the Italian Public," Working Papers, Fondazione Eni Enrico Mattei 2007.11, Fondazione Eni Enrico Mattei.

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