The value of a healthy home: Lead paint remediation and housing values

Abstract

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A sound investment? Traffic noise mitigation and property values

“…This study finds a gain-to-funding ratio of 1.4 to 1.7 for the noise mitigation programme. These figures are similar to the corresponding ratios from U.S. lead remediation programmes (Billings and Schnepel 2017;Theising 2019) and smaller than the ratios from Superfund cleanups in the U.S. (Gamper-Rabindran and Timmins 2013), public housing improvements in the Netherlands (Koster and Van Ommeren 2019) and a U.S. urban revitalization programme (Rossi-Hansberg, Sarte, and Owens III 2010).…”

The price and allocation effects of targeted mandates: Evidence from lead hazards

“…only state where the mandate increased property values, suggesting that the state's lead-safe certificate model is particularly effective at spurring abatement. Second, Billings & Schnepel (2017) find that federally-funded lead remediations increase home values and have tremendous returns on investments. By showing that unfunded remediation mandates decrease property values and fail to attract families with children into old homes, my findings suggest that liquidity constraints might prevent some landlords from undertaking beneficial investments.…”

Inside buildings

“…Research has shown individuals are willing to pay rent or a price premium to limit or avoid exposure to hazards such as air pollutants or lead (Billings and Schnepel, 2017). The question is whether such patterns are also visible in our sample.…”

“…Similarly, studies on lead paint remediation programs provide evidence of avoidance behavior relative to sources of indoor pollution. Individuals are willing to pay a rent or price premium to be in houses that are certified to be lead-free (Billings and Schnepel, 2017).…”

“…These results point at a split incentive or external effects problem, where the agent making the investment decision is not the direct beneficiary of the investment outcomes. Home owners reap the full benefit of their renovation investments, both in increased house value (see for instance Billings and Schnepel, 2017) and in improved health and comfort. Landlords, on the other hand, only receive the benefit of increased home values following renovations, while the health benefits affect the tenants only.…”