Brownfield Areas and Housing Value: Evidence from Milan

Abstract

Using a transaction price database, in this paper we evaluate the economic effect of abandoned and derelict real estate areas on housing prices in Milan Italy from 1993 to 2016. We find that brownfields are widespread throughout Milan, with larger abandoned and derelict areas prevalent in the suburbs. Standard hedonic price models show that nearby brownfield areas lower housing prices, with stronger effects for larger derelict and abandoned areas. Economic losses are more relevant to houses in the historical city center and are affected by real estate market trends.

The Impact of Brownfields on Residential Property Values in Post-Industrial Communities: A Study from the Eastern Part of the Czech Republic

“…Our study on the impact of brownfields on the price of neighbouring properties confirmed that brownfields truly reduce (devaluate) property value in their neighbourhood (please see, for example, Bond and Cook [62]). Primary (4.1) and secondary (4.2) research performed in the selected municipalities and regions of the Czech Republic proved analogous findings that had already been detected in numerous studies ( [26]: Cincinnati, Ohio; [28] Milan; [8]: Milwaukee and Minneapolis [18], New Jersey; [34]: Illinois; [63], Atlanta and Cleveland [40]: Chicago). However, such studies on Central European towns and cities are still quite rare.…”

“…With properties at a 2000-foot distance, the impact of brownfields on the property value started to be insignificant. Gibilaro et al [28] claim, in their study, that the existence of brownfields has a negative impact on the property market, as it leads to a drop in demand for houses, flats, and other properties [29], and at the same time, it reduces the rental value. As a result, the owners of the affected properties are the unintentional recipients of the loss caused by this undesirable effect (a negative externality) and their rental revenues are lower than they could potentially be.…”

“…One of the many impacts of neglected brownfields is their effect on the value of neighbouring properties. Plenty of studies have already focused on this topic and analysed the relation between the occurrence of brownfields and the impact on the value of residential properties located in their immediate neighbourhood [23][24][25][26][27][28]. In particular, we may mention the study [26], which analysed the value of more than 6800 properties in the City of Cincinnati (Ohio, USA) located within 2000 feet (about 610 m) from brownfields.…”

The presence of polluting sites in urban contexts: an analysis of the effects on the dynamics of the residential real estate market

“…A more significant decline in property values can be seen if abandoned and abandoned brownfield sites are in the vicinity of the center (within a 0.5 km radius of the core). In fact, it appears that the value of a property's neighbors may depend on more than just its proximity to a brownfield-in addition, it may depend on how many nearby abandoned sites there are (Gibilaro and Mattarocci, 2019). A similar method was used by Bacot and O'Dell (2006) to analyze the effects of brownfield regeneration on the property values of nearby residential properties in Milwaukee (WI, USA) and Minneapolis (MN, USA) in an effort to quantify the effects of brownfield on property value.…”

“…According to the aim of the research related to the verification of the existence and, possibly, the extent of the influence that the presence of the 41 SIN determines on the real estate market dynamics, a set of independent variables capable of enucleating the main peculiarities of the SIN is identified. These are technological factors and locational ones and aim to provide a summary of the fundamental intrinsic characteristics of each site with respect to its status quo and location in the geographical context of reference (Angelakoglou et al, 2019;Gibilaro and Mattarocci, 2019). Furthermore, a range of factors which consider the potential influence of the proximity to the polluting site on human health is identified and collected (called health variables).…”