Environmental Valuation & Cost-Benefit News

Link: http://www3.interscience.wiley.com/journal/121541168/abstract

Abstract: The literature on home value diminution attributable to environmental degradation and its possible reversal typically ignores indirect effects upon neighborhood characteristics that can exacerbate the overall change in property values, resulting in underestimates of diminution and overestimates of recovery. Furthermore, to the extent that direct price effects and neighborhood transition effects respond differently to remediation efforts, the relatively new postremediation literature misses an important part of the recovery process. This study examines both direct and indirect effects and finds in the case of Houston Environmental Protection Agency Superfund sites that, while the direct value impacts of proximity to toxic waste sites was significantly reduced after remediation, the indirect effects associated with induced demographic changes were much slower to reverse, producing a housing market inertia that stifled full home value recovery.

by Recai Aydin 1 and Barton A. Smith 2
1. College of Business, Lamar University, Beaumont, TX 77710 or recai.aydin@lamar.edu. 2. University of Houston, Houston, TX 77004 or bsmith@uh.edu.
Real Estate Economics via Wiley Interscience www3.interscience.wiley.com
Volume 36, Issue 4; Pages 777-812
Published on behalf of the American Real Estate and Urban Economics Association
DOI: 10.1111/j.1540-6229.2008.00230.x About DOI

Link: http://www.appraisalinstitute.org/taj

This article is intended as a road map for appraisers who have a landfill consulting assignment. Construction or expansion of a solidwaste landfill typically triggers an extensive permitting process. Real estate appraisers are sometimes called on to present evidence and/or testimony for clients who support or oppose the proposed landfill improvements. This article sets forth information and techniques to assist the appraiser in providing that appraisal service. A literature review is included.
...
Among the studies reviewed are the following

In a study entitled, “An Evaluation of the Impact of a Well-Designed Landfill on Surrounding Property Values,” Bleich, Findlay, and Phillips describe a landfill in the San Fernando Valley in Los Angeles, California, that has created “no significant difference in either current prices or in appreciation rates (and thus prices over time) over a ten-year period.” Various appraisal methods for measuring an impact on property value were employed, including an analysis of over 1,600 sales transactions in three nearby neighborhoods. Based on the study results, the authors conclude that “a landfill, if well-designed and -managed, can be a good neighbor and have no statistically measurable negative impact on surrounding property values.” However, the San Fernando Valley landfill that is the subject of the study is located on the north slope of a hill. The south slope, which abuts the neighboring homes, is undeveloped land owned by the county. Consequently, the actual dumping area is not visible from the neighboring homes.

These findings are in contrast to those of Flynn et al. Their research uses various appraisal research methods.... In addition to the diminution in selling prices, this study found that “both nuisance and potential health problems are perceived to be related to a reduced level of marketability, lower selling prices, and increased homeowner flight [sellers taking a loss in order to quickly move out of an area].”

In “A Review of Sanitary Landfill Impacts on Property Values,” Cartee provides information on four studies of landfill value impacts to nearby residential developments. One of the studies indicates that the amount of waste handled at a particular landfill would influence property impacts. “For landfills handling large volumes of waste (i.e., over 500 tons daily) the rate of new residential construction and sales of residences and lots was much less than those landfills receiving 300 tons or less per day.” Cartee also describes a study that finds development of a sanitary landfill can, in some cases, enhance property values. This generally occurs in remote locations where “the introduction of infrastructure such as new or improved access road, utilities, drainage, etc. [built in conjunction with the landfill] has actually stimulated additional development” with specific cases of “increases in land values and new construction.” ... The landfill that is the subject of their study is a publicly owned and operated landfill in the Pacific Northwest. Through paired sales analysis, they find that property values next to the landfill are “lower than in comparable areas more distant from the landfill.”

Flynn at al. also interviewed buyers, sellers, and other market participants to understand market attitudes about the location. They find that “sale transactions or projects that did not occur may be as telling as those that did,” meaning that some transactions are not available for analysis because the prospective buyer or developer walked away from the property when they realized the extent of potential impact from the neighboring landfill. At the completion of the research, the authors link “the landfill with a stigma effect of public opinion about the desirability of housing and property” nearby. They estimate the resulting loss in property value to be 8% to 10%.

The Reichert, Small, and Mohanty study, “The Impact of Landfills on Residential Property Values,” has been widely referenced in other research. This study of areas near five municipal landfills in Cleveland, Ohio, finds that neighborhoods of more expensive homes experience a greater loss in property values (5.5%–7.3%) than older neighborhoods with less expensive homes (3%–4%). The study results also indicate that the effect of a landfill is “essentially nonexistent for predominantly rural areas.” Reichert, Small, and Mohanty report that “homeowners who own more expensive homes are more sensitive to landfill problems.” They also find that “in areas where the population is younger and better educated, very concerned about health issues and child safety, and has a significant housing investment to protect, the potential adverse landfill impact can be significant.” They conclude, “Buyers who are general community perceptions of environmental risks, density of the local population, proximity to population centers, and design features of the landfill, including its physical profile, volume and nature of waste handled, and other site characteristics.”

An article by Guntermann, “Sanitary Landfills, Stigma and Industrial Land Values,” reports on a study of the impact of landfills upon vacant industrial land. The study includes twelve landfills in the Phoenix area, with sales transactions studied over the period from 1984 to 1994. Ten of the landfills were MSW landfills, and two were landfills for commercial refuse only. The landfills in the study were a mixture of open and closed facilities. The study results indicate that “land values around open solid waste landfills are reduced relative to the values of other industrial parcels,” and Guntermann concludes that the reduction of value “is attributable to solid waste landfills and not to refuse landfills.” This study also finds that closed landfills do not adversely affect industrial land value, and that commercial refuse landfills do not have a negative impact on vacant industrial land.

“Price Effects of Landfills on House Values,” by Nelson, Genereux, and Genereux reports on a study of an existing landfill in suburban Minneapolis-St. Paul, Minnesota. Sales of houses over a 10-year period were studied, with distances varying from 0.35 to 1.95 miles from the center of the landfill. The study included 708 sales, and the results indicate a reduction in value between 6% and 12%. The authors state that “given a choice between two sites offered for the same price and identical in every respect, except that one is closer to a landfill, home buyers will choose the site that is farther away.” The study results indicate that the adverse price effect seen in the study was limited to a distance of about two miles, after which there is “little, if any, adverse price effect.” The landfill that was the subject of the study began operation in 1967, so the authors caution that it was not “built and operated pursuant to modern standards.” Nonetheless, they conclude, “it seems from the analysis reasonable to assume that unless new landfills achieve a state of operations such that the urban housing markets view them as essentially benign, one should expect that landfills will have negative price effects.”
...
by Shawn E. Wilson, MAI
The Appraisal Journal from the Appraisal Institute www.appraisalinstitute.org/taj
Volume 77, Issue 1; Winter, 2009; Pages 24-37
This article is in the EBSCO Business Source Premier which is available free of charge from many libraries including the New York Public Library www.NYPL.org more specifically you can search at http://wfsearch.webfeat.org/clients/nypl/nyplsubjects.asp?int=a and the article is located at:
http://wf2dnvr5.webfeat.org/eVQ3M1199/url=http://web.ebscohost.com/ehost/detail?vid=1&hid=114&sid=1015a201-f09a-433a-acd5-6dc1bda0cffa%40sessionmgr107&bdata=JkF1dGhUeXBlPWNvb2tpZSxpcCx1cmwsY3BpZCZjdXN0aWQ9bnlwbCZzaXRlPWVob3N0LWxpdmU%3d#db=buh&AN=36658929

Link: https://www.energystar.gov/istar/pmpam/#

Portfolio Manager is an interactive energy management tool that allows you to track and assess energy and water consumption across your entire portfolio of buildings in a secure online environment. Portfolio Manager can help you set investment priorities, identify under-performing buildings, verify efficiency improvements, and receive EPA recognition for superior energy performance.

The following improvements were implemented on February 23, 2009
1. ENERGY STAR Benchmarking Starter Kit - Learn how to benchmark your building step by step
Benchmarking your buildings' energy performance is a key first step to understanding and reducing energy consumption and your carbon footprint. All buildings can assess their energy performance, water efficiency, and carbon emissions using Portfolio Manager.
Once you have collected the necessary data, benchmarking is quick and simple.
2. Updates to the Hotel, K-12 Schools, and Pools Space Models - Effective February 23, 2009, important updates will be made in Portfolio Manager which will impact energy performance ratings. EPA has updated the methodologies used to create ratings for buildings composed of these space types with the new 2003 Commercial Building Energy Consumption Survey (CBECS) data. These updates reflect the most recent market data available and an improved statistical methodology.
3. New and Revised Building Import Templates - Portfolio Manager allows you to import facility data into Portfolio Manager using a downloadable Excel template. This minimizes manual data entry of large sets of facility data. Import templates are available for each of the space types that can be rated in Portfolio Manager.
4. New Multifamily Housing Space Type - Effective February 23, 2009, Portfolio Manager users can benchmark energy and water consumption for Multifamily Housing facilities. EPA defines Multifamily Housing as any residential building containing 2 or more rental or individually-owned residential units. Occupants of Multifamily housing can include tenants and/or individual owners (e.g. cooperators). Users are strongly encouraged to enter data in all of the optional fields presented, as this data will help EPA in its efforts to develop comparative energy performance metrics for the Multifamily Housing industry.
U.S. Environmental Protection Agency (EPA) www.EPA.gov

Link: http://www.nytimes.com/2009/05/09/us/09grace.html

A federal court jury on Friday acquitted the big chemical products company W. R. Grace and three of its former executives on all charges that they had knowingly contaminated the small Montana mining town of Libby with asbestos, then conspired to cover up the deed.
...
At least 200 people have died of asbestos-related diseases and hundreds more have been sickened in Libby, population about 2,600. And there is no doubt that the Zonolite Mountain vermiculite mine, owned and operated by Grace from 1963 to 1990, was the source of the asbestos.

But the jury in Federal District Court in Missoula, deliberating for less than two days after a nearly three-month trial, unanimously concluded that the contamination was not criminal.

The verdict was a repudiation of the federal government’s case, which portrayed Grace as a greedy mine operator, aware of the dangers created by its mining operations and then callously, criminally covering up its crime.
...
The company could have been fined millions of dollars in fines if convicted, while defendants faced prison time of up to 15 years on the most serious charges.

By Kirk Johnson
FOR FULL STORY GO TO:
http://www.nytimes.com/2009/05/09/us/09grace.html
The New York Times www.NYTimes.com
Published: May 8, 2009

Link: http://yosemite.epa.gov/opa/admpress.nsf/2dd7f669225439b78525735900400c31/f6078062feb67137852575a00065183a!OpenDocument

In a settlement announced today, Atlantic Richfield Company (ARC) agreed to perform cleanup work, estimated at $8 million, at the former Anaconda Copper Mine site in Yerington, Nev., and pay the U.S. Environmental Protection Agency $2.2 million for response and oversight work conducted by the agency in areas of the mine formerly operated by ARC or its predecessor, Anaconda Minerals.
...
The settlement specifically requires ARC to conduct the following activities with EPA’s oversight and approval:
· Cover expanses of ARC’s former evaporation ponds to prevent the accumulation of standing water that threatens wildlife and to prevent the migration of hazardous dust from the site;
· Remove radiological materials in the former process areas to a level that is safe for permanent workers at the site;
· Abate threats from abandoned electrical systems;
· Remove asbestos laden transite pipe within the site;
· Continue operation and maintenance of the heap leach fluid system at the site to prevent catastrophic discharges of acidic fluids and operate a system to deter wildlife from approaching the acidic fluids.

The EPA has spent approximately $10 million at the Anaconda Copper Mine site investigating and addressing wastes abandoned at the site. Specific actions include a spring 2006 action by the EPA to cap 100 acres of mine tailings to prevent erosion and dust blowing from the site, remove transformers, and build a collection pond to improve the Arimetco heap leach fluid system. The EPA completed additional repairs to the heap leach system in 2007 and 2008 to prevent discharges to ground water. ARC is performing other response actions at the site, including broad investigation of the nature and extent of ground water contamination, under two previous EPA Orders. Last year, ARC reimbursed EPA for $2.77 million in costs.

Site Background:
Originally known as the Empire Nevada Mine, the site began operation around 1918 and was acquired in 1953 by Anaconda Minerals. From 1977 to 1982 the company was owned by ARC and then sold to Don Tibbals, a local resident, who subsequently sold most of his interests to Arimetco Inc.

Arimetco operated a copper recovery operation from existing ore heaps within the site from 1989 to November 1999. Arimetco has terminated operations at the site and is currently managed under the protection of the United States Bankruptcy Court in Tucson, Ariz.

The threats on the site come from metals contaminating the groundwater and fugitive dust that could impact human health and surface water. Mining operations enhanced levels of naturally occurring uranium, making the radiological substance more pervasive and mobile in and around the site. Additional concerns include contaminated surface water that can impact wildlife.

For a site overview visit: http://www.epa.gov/region09/anaconda/
For a video of site conditions before EPA’s removal actions: http://www.epa.gov/region09/superfund/anaconda/

U.S. Environmental Protection Agency (EPA) www.EPA.gov
Press Release dated April 22, 2009

Link: http://yosemite.epa.gov/opa/admpress.nsf/Press%20Releases%20By%20Date

U.S. Environmental Protection Agency Region 5 has issued a proposed cleanup plan for the Laufen International facility at 10233 Sandyville Road S.E., in East Sparta, Ohio. The public is invited to provide written comments on the plan until June 1.

The $7 million proposed cleanup, required by a 2005 Resource Conservation and Recovery Act consent agreement between EPA and Laufen International will address lead and zinc containment on 15.4 acres where U.S. Ceramic Tile previously managed waste tile and waste water sludge.

The plan calls for soil and sediment removal with offsite disposal, and protective covers to eliminate exposure. The metals contamination has affected soil, surface water and sediment. Ponds and drainageways on the property are also part of the cleanup.

An EPA "Statement of Basis document that provides a summary of the environmental contamination investigation and identifies remedies proposed to clean up the site is available at http://www.epa.gov/reg5rcra/wptdiv/permits/actions.htm#2009

U.S. Environmental Protection Agency (EPA) www.EPA.gov
http://yosemite.epa.gov/opa/admpress.nsf/d0cf6618525a9efb85257359003fb69d/405c6387d6c5713e852575ac0056c113!OpenDocument>
Press Release dated May 4, 2009