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Are Superfund sites super bad for housing prices?

Posted by bdaley August 5, 2008 07:49 PM

By Beth Daley, Globe Staff

Say the word Superfund when buying a house and well, people tend to get nervous.

Known as some of the most hazardous and dangerous waste sites in the United States, I’ve known people who didn't buy homes near them, fearful that toxic substances could be leaking into the nearby air or water to harm them. Think Civil Action.


woburn.jpg
Woburn contaminated site, 1980 (Globe photo)

So you’d probably think that if a Superfund site got cleaned up, housing prices would rise accordingly.

Not so, according to new research by Massachusetts Institute of Technology environmental economist Michael Greenstone who co-wrote a paper this month in the Quarterly Journal of Economics.

Greenstone compared neighborhoods around Superfund sites to neighborhoods surrounding toxic sites where Superfund cleanups did not take place and found that house prices and rental rates did not increase when a site was cleaned. In addition, the population of the neighborhoods and rate of new home construction near cleaned Superfund sites remained at pre-cleanup levels.

About two-thirds of 1,600 sites eligible for Superfund money around the country have undergone some kind of clean-up since the program began in1980, according to Greenstone. So far, about $43 million has been spent per site on average and another estimated $30 billion is needed to clean up the remaining sites, he notes. The average cleanup takes 12-13 years to complete.

“The lengthy interventions are disruptive and very expensive,’’ said Greenstone. “The housing market’s clear message is that the cleanups are not worth it to the people living near these sites.”

Greenstone’s point is that given how many environmental problems the world faces, from climate change to air pollution, why waste so much money on something that does not appear to improve people’s lives. If cleaned up sites don’t cause higher housing prices, why do it?

Of course, some would argue that a cleanup’s value is in improving public health and the environment – not housing prices. Others may say that a Superfund site’s reputation may last longer than the pollution does, but that is not a reason not to clean it up.

What do you think?


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8 comments so far...
  1. Wow. That is one of the most short-sighted opinions on Superfund I've ever read.

    The housing market is not the only measure of how a cleanup helps public health, the community, the economy, and the environment. If run correctly (and not shackled by political compromises) CERCLA (the Superfund law) would ensure that the polluters pay for the clean ups that they caused. Yes, there is a cost, but it should fall on those who reaped the benefit originally.

    Or we could just let it fester because the hidden hand (as interpreted by this economist) says it isn't worth the trouble.

    Posted by Paul August 6, 08 09:01 AM
  1. 43 million since 1980 and another 30 billion to go? IS THIS FOR REAL? Way to kill and environment settlement by not funding it. I had no idea.

    Posted by austin August 6, 08 09:23 AM
  1. Super fund site clean ups are for the public health and welfare first and property values a distant second. How many children need to get sick and die before it becomes worth the trouble to fix a problem?

    Posted by dpgIII August 6, 08 10:19 AM
  1. Perhaps its important because the health of our environment and our community is far more important than the value of a few homes... but then again, some people would rather our kids get cancer, our rivers stay polluted we have these eyesores sitting amongst us.

    Posted by mtbr1975 August 6, 08 10:33 AM
  1. Would Mr. Greenstone buy a house on top of a Superfund site that wasn't cleaned up? I doubt it ...

    Posted by Bob M. August 6, 08 10:39 AM
  1. Property value should not even figure into the thought about whether or not to clean up a Superfund site. It is high time we stop being so anthropocentric and putting monetary value on everything, and just do it because it is the right thing to do for all - human or not.

    Posted by LB August 6, 08 12:18 PM
  1. Mr. Greenspan's not a fool. He's not going to buy a house anywhere.

    Posted by Ion Freeman August 6, 08 05:00 PM
  1. Most superfund cleanups are just cosmetic. Many old dumpsites are simply covered with grass and turned into parks, golf courses, or schools. Much of the Superfund money was spent on consultants and attorneys. I wouldn't want to live anywhere near a closed dump whether it was on the Superfund list or not.

    Posted by Janice England August 9, 08 02:18 PM
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