The impact of chemical hazardous sites on residential values
The Emergency Planning and Community Right to Know Act (EPCRA) has been in existence for twenty years yet no comprehensive study has been performed studying the impact it has on housing values surrounding disclosed sites. While many of the issues have been studied individually, no previous study has investigated them in their entirety. Additionally, no previous study has specifically investigated the impact on nearby housing values of Risk Management Program sites or the impact that Tier Two sites have on nearby housing values.
September 11, 2001 (9/11), shook the American consciences about their security, but did it increase their fear of neighborhood environmental hazards? If publicly available information is being used to value property, then residential values near potential terrorist targets should have declined in the aftermath of 9/11. No previous study investigated if a hedonic model could be used to measure the impact that potential terrorist targets have on nearby housing values.
This study uses a hedonic model to test four hypotheses in Lubbock, Texas. The first hypothesis questions if housing prices near EPA listed chemical hazards are lower, ceteris paribus. This study finds that housing values are lower near Permitted Water Discharge sites, Risk Management Program sites, and Hazardous Waste Handler sites. The second hypothesis questions if housing prices are lower near EPA-designated Tier Two sites, ceteris paribus. This study does not find that housing values are lower near Tier Two sites. The third hypothesis questions if the negative impact of either EPA listed sites or Tier Two sites grew after 9/11. This study finds the negative impact of being between 2/3 of a mile and one mile of a Hazardous Waste Handler does grow after 9/11. The last hypothesis questions if the new listing of chemical hazardous sites or the listing of governmental enforcement action lowers nearby housing values. This study finds no immediate impact on housing values resulting from the listing of new sites or enforcement action.