TY  - JOUR
AU  - Sigman,Hilary
TI  - Environmental Liability and Redevelopment of Old Industrial Land
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15017
PY  - 2009
Y2  - May 2009
UR  - http://www.nber.org/papers/w15017
L1  - http://www.nber.org/papers/w15017.pdf
N1  - Author contact info:
Hilary Sigman
Department of Economics
Rutgers University
75 Hamilton Street
New Brunswick, NJ  08901-1248
Fax: 732/932-7416
E-Mail: sigman@econ.rutgers.edu
AB  - 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.
ER  -