| The main objective of this research is to estimate the impact of brownfields on the surrounding property values by using a Maximum Likelihood-based hedonic price model that takes into account the phenomenon of spatial dependence among real estate property values and thus yields coefficient estimates that are unbiased and consistent. The study aims to also contribute additional relevant information to the urban and regional planning literature by determining the magnitude of the total impact traditional hedonic variables, and in particular brownfield sites, have on the value of single-family residential properties. The total impact represents the cumulated effect determined by each explanatory variable and by the spatial dependence phenomenon. The results of the Maximum Likelihood estimation procedure indicate that the negative externalities on property values determined by the presence of brownfield sites in their neighborhood are limited to the first 1,000 feet around brownfields. Based on these findings, the loss in property value for each of the properties included in the analyzed sample and the corresponding tax revenue loss for the city are calculated. Although the magnitude of the loss in property values alone may not justify the need for public support for brownfield redevelopment, it opens a new array of directions for future research, such as, to name just a couple, the need to compare the potential monetary gains from brownfield redevelopment with the actual costs of redevelopment or the need to look beyond single-family residential properties in calculating the total impact of brownfields on the surrounding property values. |
