Examination of Housing Price Impacts on Residential Properties Before and After Superfund Remediation Using Spatial Hedonic Modeling

Although recent brownfields redevelopment research using theories of real estate valuation and neighborhood change have indicated negative effects on surrounding residential housing, little evidence exists to show price impacts and sociodemographic change after remediation. This study examines the extent and size of the economic impact of Superfund sites on surrounding single-family residential properties before and after remediation in Miami-Dade County and examines trends for contemporaneous sociodemographic changes. The study combines the economic impact from changes in environmental quality with contemporaneous sociodemographic changes within the purview of environmental and social justice. This study uses spatial hedonic price modeling on a comprehensive dataset of property-level data, with corresponding sales prices of housing transactions while controlling for other structural, neighborhood, and submarkets characteristics for assessing economic impact. Findings revealed that housing sales prices for single-family residential properties significantly increases as distance to the nearest contaminated Superfund increases. Following remediation, this negative impact declined and housing values increased significantly in neighborhoods with remedied Superfund sites albeit more so in low housing submarkets than premium submarkets. Spatial hedonic models outperformed traditional OLS models in presenting unbiased efficient parameter estimates, correcting for spatial dependence. Although no evidence for gentrification was observed, there existed significant differences between certain sociodemographic characteristics of neighborhoods around contaminated Superfund sites and those of properties located elsewhere leading to concerns of environmental and social justice. Findings suggest that low-income minority populations are more likely to be living in neighborhoods around contaminated Superfund sites and experience a greater negative effect on housing sales prices; these sites are also less likely to be remedied as compared to sites located elsewhere. The findings highlight not only the revealed preferences of homeowners with respect to environmental disamenities, but also help inform policymakers and researchers of the impact of brownfields redevelopment on economic and sociodemographic characteristics of a growing urban region with evolving cultural and social diversity. Incorporating influences of housing submarkets, neighborhood amenities, and spatial dependence help provide a holistic and comprehensive model for examining environmental disamenities and provide a better understanding for neighborhood change.