EPA Touts Superfund’s Impact on Property Values

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Superfund boosts local economies, the Environmental Protection Agency said in a Jan. 5 memo, but the benefits may be more nuanced than those claims.

President Obama asked each of his cabinet members to write “exit memos” about their agency’s progress under his administration. The EPA’s memo, released Jan. 5, details “historic progress” for environmental protection.

The EPA claims that cleaning up and removing sites from the National Priorities List of hazardous waste sites prioritized for remediation increased local property values by 19 percent to 25 percent.

However, in the same 2012 study that produced those statistics, the authors said proposing a site for the National Priorities List actually reduces some property values by about 12 percent.

Though cleanup usually results in a net increase in property values, it may not be as high as 25 percent, according to the study.

Informing the Market

Listing a property on the NPL provides buyers and sellers more information about its value.

“Even if the market is already aware of the site and the extent of contamination, the proposal of the site to the NPL may further decrease housing values by stigmatizing the neighborhood,” the study said.

Homes in less prosperous communities see bigger increases in property values after cleanup, the study said.

The stigma on an NPL-listed site tends to evaporate once the site has been cleaned up, Nancy J. Rich, partner at Katten Muchin Rosenman, LLP, told Bloomberg BNA.

“If you’re coming into the neighborhood as a buyer…you have no concern because the problem’s been addressed,” she said.

Estimating Value

Lenny Siegel, executive director of the Center for Public Environmental Oversight, told Bloomberg BNA it can be hard to pinpoint exactly what changes a property’s value, but utility is essential.

“When you’re making properties usable, you’re making them more valuable. More valuable to their owners, more valuable to the taxing agencies,” he said.

As part of its superfund accomplishments, the agency also counts more than 2,700 removal actions and remedial site assessments and the addition of 142 sites to the National Priorities List.

About 460 superfund sites were readied for their anticipated use over the past eight years, according to the memo.

As of November, 1,300 sites were listed on the NPL.

Benefit for Brownfields

Property values near brownfields also benefit from remediation, according to a 2015 National Bureau of Economic Research working paper.

“Brownfields Program cleanups yield positive, statistically significant, but highly-localized effects on housing prices,” the paper said.

The EPA Jan. 5 announced that it would give 19 communities $3.8 million to help plan the cleanup and re-use of brownfields sites.

Those communities include Providence, R.I.; Norfolk, Va.; Middlesborough, Ky.; and Harrisburg, Pa.

Rich said those communities need agency grants because the costs of studying and remediating brownfields sites in depressed economies are prohibitively high.

“Those sites are the more challenging ones because of the fact that you’re not going to have a developer who says, ‘Gosh, this is a hot area,’” she said.

Anticipating Change Under Trump

Siegel said he’s unsure what will happen to superfund under President-elect Donald Trump and the new administration.

“Their hostility to EPA seems centered around climate change, so I’ve got a wait-and-see attitude,” he said.

He notes that most superfund cleanups are paid by responsible parties and don’t always rely on federal funding.

Rich expects the new administration and new EPA head to take a hard look at the agency’s Brownfields Program grants.

“The administration, I believe, will be interested in promoting development and business, so it will be an interesting confluence of values that they’ll have to evaluate,” she said.

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