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Environmental Liability and Redevelopment of Old Industrial Land

  • Hilary Sigman

Many communities are concerned about the reuse of potentially contaminated land (brownfields) and believe that environmental liability is a hindrance to redevelopment. However, with land price adjustments, liability might not impede the reuse of this land. This article studies state liability rules-specifically, strict liability and joint and several liability-that affect the level and distribution of expected costs of private cleanup. It explores the effects of this variation on industrial land prices and vacancy rates and on reported brownfields in a panel of cities across the United States. In the estimated equations, joint and several liability reduces land prices and increases vacancy rates in central cities. The results suggest that liability is at least partly capitalized but does still deter redevelopment. (c) 2010 by The University of Chicago. All rights reserved.

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File URL: http://dx.doi.org/10.1086/649803
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Article provided by University of Chicago Press in its journal The Journal of Law and Economics.

Volume (Year): 53 (2010)
Issue (Month): 2 (05)
Pages: 289-306

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Handle: RePEc:ucp:jlawec:v:53:y:2010:i:2:p:289-306
Contact details of provider: Web page: http://www.journals.uchicago.edu/JLE/

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