Brownfields Remediation: Impact on Local Residential Property Tax Revenue

Karen A Sullivan

doi:10.1142/s1464333217500132

Abstract

The US Environmental Protection Agency (EPA) Brownfields Program provides grants to assess and clean up brownfields. There are few studies that estimate tax revenue impacts from cleanup beyond those generated directly from within the remediated site’s property lines. This study estimates the increased residential property tax revenue attributable to brownfields cleanup at 48 sites remediated between 2004 and 2011 under the EPA Brownfields Cleanup Grants Program. Findings from a previous study of a 5% to 15.2% property value increase following cleanup at these sites are applied to the assessed values of nearby residential properties along with local tax laws, assessment ratios, and rates to estimate tax revenue gained as a result of brownfields cleanup. The estimated increase in residential property tax revenue for a single tax year from remediating 48 brownfields properties was between $29 million and $97 million (2014 USD).

Highlights

The US Environmental Protection Agency (EPA) Brownfields Program provides grants to assess and clean up brownfields
Given the importance of tax revenues for local municipalities to provide goods and services to the local community and that a frequently identified barrier to brownfields redevelopment is a lack of cleanup funding,3 it is surprising that little attention has been paid to measuring the benefits that brownfields cleanup and redevelopment provide to local governments beyond taxes and jobs generated from the project site itself (De Sousa et al, 2009). This study addresses this knowledge gap by estimating the increased residential property tax revenue attributable to brownfields cleanup at 48 sites that were remediated between 2004 and 2011 under the EPA Brownfields Cleanup Grants Program
HMT’s (2017) fixed effects and quasi-experimental approaches together yield a consistent conclusion — “averaging over the experiences at a nationally representative sample of brownfields properties, cleanup leads to housing price increases between 5.0% and 15.2%.”. This analysis utilises the property value increases identified in HMT (2017) to estimate the additional residential property tax revenue resulting from cleanup for a subset of sites originally included in the HMT (2017) analysis

Summary

Introduction

The US Environmental Protection Agency (EPA) Brownfields Program provides grants to assess and clean up brownfields. Whether for commercial, industrial, residential, recreational, greenspace or other productive use, may result in jobs to local residents, increased property values, or it may provide recreational or other services to make the community a better place to live. Cleanup and redevelopment can increase local tax revenue by returning abandoned properties to the tax rolls. If land cleanup and reuse result in higher values of nearby properties, brownfields redevelopment can further increase the local property tax revenues. Changes in the number of new businesses, employment rates and incremental consumer spending can affect state income tax and local and state sales tax revenue (US Environmental Protection Agency, 2011). Increased tax revenues provide a larger pool of funds for municipalities to provide public services and education to local communities

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Results

Conclusion