Municipal Solid Waste Incinerator Impacts on Residential Property Values and Sales in Host Communities

Chris Zeiss

DOI: 10.2190/9K1K-8WQ6-8LP9-EU7R


Property value effects of new municipal waste incinerators often concern residents in prospective host communities. Despite numerous studies of property values using standard approaches, the results show insignificant or inconsistent results. This article describes in detail the mechanism that determines property value differences in response to waste facility impacts and tests the key issues in the process. Key items and assumptions that underlie the linear "hedonic property value" model include: 1) the facility's impacts, 2) residents' and potential buyers' perception and understanding of the impacts, and 3) assumptions that property value data is well behaved and that other factors in the real estate market are constant. The analysis of property values at waste facilities shows that many studies reveal insignificant or marginal effects. Few show significantly negative impacts and some show positive property value impacts. A detailed case study of property values and sales at a new incinerator site shows no significant effects of facility impacts on sales prices or on the number of sales in the host community. Tests of key assumptions show that some are poorly met by the data. Property value guarantees are offered as a method of encouraging residents to accept the facility, but the guarantees do not sway the most concerned respondents. In conclusion, the implications for facility siting are discouraging because the results do not corroborate the standard approach to predicting property value impacts. Therefore, analysts are left without a method to predict impacts or to determine effective methods of addressing residents' concerns. The results mean that future research must carefully trace residents' perceptions of impacts at the time of purchase, test the model's assumptions, and adapt the model accordingly.

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