Environmental Liability and Redevelopment of Old Industrial Land

Hilary Sigman ()

Departmental Working Papers from Rutgers University, Department of Economics

Abstract: 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. Existing literature has found price reductions in response to liability, but few studies have looked for an effect on vacancies. This paper studies variations in state liability rules --- specifically, strict liability and joint and several liability --- that affect the level and distribution of expected private cleanup costs. 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. Neither a price nor quantity effect is estimated from strict liability. The results suggest that liability is at least partly capitalized, but does still deter redevelopment.

Keywords: Environmental policy; Tort reform; Real estate; Brownfields (search for similar items in EconPapers)
JEL-codes: Q5 K32 R33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-env and nep-ure
Date: 2006-08-18
View list of references View citations in EconPapers

Downloads: (external link)
ftp://snde.rutgers.edu/Rutgers/wp/2006-09.pdf (application/pdf)

Related works:
Working Paper: Environmental Liability and Redevelopment of Old Industrial Land (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:rut:rutres:200609

Access Statistics for this paper

More papers in Departmental Working Papers from Rutgers University, Department of Economics
Contact information at EDIRC.
Series data maintained by ().