Determining the Property Value Impact of Landfills

The decline in property value can be due to owner\u27s act or exogenous act from the operation of landfills. Landfill neighbors, especially home owners, perceive landfill operation to pose environmental safety problem such as ground water contamination and methane gas leakage that could affect home value. Owners of landfills, especially those landfills that accept only dry waste (limited purpose landfill), claim that since their facilities meet the requirements of environmental regulations and the type of waste they accept could not possibly produce methane gas and leachate there is no property value impact of their facilities. Several studies have shown that landfills do not have impact on property value. However, one recent study found that a large regional landfill have impact on property value. The property value impact of a limited purpose landfill located in Portland, Oregon, was investigated in this study. Data were gathered for homes in approximately one half mile radius around the landfill for the periods before the landfill opened, during operation, and after closure. Hedonic estimation technique incorporated in a multiple linear regression was used to control for a key variable (proximity or distance between the landfill and homes) and examine the relationship of this variable and sale price of homes. The results show that distance of homes (the proxy for perception) from the landfill was positively related and statistically significant with sale prices of homes during the period the landfill was in operation. Distance of homes sold in the periods the landfill was not in existence or operation was not positively related nor statistically significant with sale prices. That is, the operational effects of the landfill was capitalized into property value. With this result, the issue of whether neighbors of landfills should be compensated deserve more attention. The results of this study would be very helpful in negotiating compensation. The results also show that if adequate pollution mitigation measures are in place landfill zoning ordinance should be based on the fact that landfill sites would yield maximum economic benefit to the owner after closure