Chamblee et al. [1] conducted an econometric investigation to assess the effects of a Superfund site on the value of non-source land near Ashville, North Carolina. The source site in question had a previous history of electroplating manufacturing conducted by CTS Corporation from 1959 to 1985. Following an assessment process that commenced in 1984, the Superfund site was officially designated to the EPA’s National Priorities List in March 2012. The primary concern was trichloroethylene (TCE) within a groundwater plume that extended beyond the site's boundaries. This contamination also posed a potential vapor intrusion risk in shallow groundwater areas. Notably, several private water wells had to be decommissioned due to the designation of Superfund site on the NPL, and certain properties had to be connected to public water.
To estimate the impact of environmental contamination on land values, the researchers utilized an Ordinary Least Squares (OLS) model specification in their hedonic regression analysis. The study encompassed a period ranging from 1996 to 2010, during which 186 sale observations were obtained from the Buncombe County, NC, Tax Department. Independent variables were incorporated into the models to account for variations in land characteristics. Furthermore, the depth of contaminated water flow was identified as a critical aspect to be considered in this regression analysis.
The results derived from the hedonic analysis provided evidence of significant decreases in land values associated with shallow-flow groundwater contamination. In contrast, land values remained largely unaffected by deep-flowing contaminated groundwater. The OLS models demonstrated that properties predicted to have groundwater contamination based on geographic and topographic factors experienced a Property Value Diminution (PVD) of 17.55%. Additionally, land values of properties adjacent to contaminated water wells exhibited a PVD of 54%. The authors also acknowledged that their analysis may not completely account for the financial impacts of property contamination for parcels that have become unmarketable due to actual contamination or the potential risk of contamination.
[1] Chamblee, John F, Carolyn A Dehring, Craig A Depken II, and Joseph R Nicholson. “Water Contamination, Land Prices, and the Statute of Repose.” The journal of real estate finance and economics 51, no. 3 (2015): 398–414.