Evaluation of stigmatized properties

Open access

Abstract

Stigmatized property is real estate burdened with an external negative effect. Individual cases are spread along a broad spectrum, along many dimensions that include the rational and the irrational, the acute and the chronic. Examples for the stigmatizing effect are a nearby airport, ground water contaminated by chemicals, presence of a high-voltage power line, and so on. Eval­uation of these properties needs special methodology. Stigma can reduce the property’s market value through a particular, multi-layered filter. The author systematically examines the professional literature’s cases of evaluation of stigmatized properties. The research aims to organize and compare the cases in order to calculate the market value of stigmatized properties. Based on the analysis, six significant dimensions are identified. A focus group of 19 experts examined and individually evaluated the stigma­tizing effects along these different dimensions. The author suggests that it is possible to estimate the stigma’s effect and compare different cases to one another effectively. The results allow the international methodology of valu­ation to be processed.

Affuso, E., de Parisot, C., Ho, C., & Hite, D. (2010). The impact of hazardous waste on property values: The effect of lead pollution. Urbani izziv, 21(2), p. 2010. doi: 10.5379/ urbani-izziv-en-2010-21-02-005.

Andersson, H., Jonsson, L., & Ögren, M. (2010). Property prices and exposure to multiple noise sources: Hedonic regression with road and railway noise. Environmental and Resource Economics, 45(1), pp. 73-89.

Baranzini, A., Schaerer, C., Ramirez, J. V., & Thalmann, P. (2008). ‘Feel it or measure it. Percieved vs. measured noise in hedonic models’. In: EAERE 16th Annual Conference, June, 25-28, 2008, Gothenburg, Sweden.

Batalhone, S., Nogueira, J., & Mueller, B. (2002). Economics of Air Pollution: Hedonic Price Model and Smell Consequences of Sewage Treatment Plants in Urban Areas, Department of Economics Working Paper 234, University of Brasilia.

Bateman, I., Day, B., Lake, I., & Lovett, A. (2001). The Effect of Road Traffic on Residential Property Values: A Literature Review and Hedonic Pricing Study. Report to the Scottish Executive Development Department. School of Environmental Sciences, University of East Anglia, Norwich.

Bell, R. (2001). The impact of airport noise on residential real estate. The Appraisal Journal, 69(3), pp. 312-321.

Benson, E. D., Hansen, J. L., Schwartz, A. L., & Smersh, G. T. (1998). Pricing residential amenities: The value of a view. Journal of Real Estate Finance and Economics, 16(1), pp. 55-73.

Bickerstaff, K. (2004). Risk perception research: Socio-cultural perspectives on the public experience of air pollution. Environment International, 30, pp. 827-840.

Bickerstaff, K., & Walker, G. (2001). Public understandings of air pollution: The ‘localisation’ of environmental risk. Global Environmental Change, 11(2001), pp. 133-145.

Boes, S., & Nüesch, S. (2011). Quasi-experimental evidence on the effect of aircraft noise on apartment rents. Journal of Urban Economics, 69(2011), pp. 196-204. doi: 10.1016/j. jue.2010.09.007.

Brandt, S., & Maennig, W. (2010). Road noise exposure and residential property prices: Evidence from Hamburg. Transportation Research Part D: Transport & Environment, 16(1), pp. 23-30.

Brandt, S., & Maennig, W. (2011). The impact of rail access on condominium prices in Hamburg. Transportation, 39(5), pp. 997-1017. doi: 10.1007/s11116-011-9379-0.

Brandt, S., & Maennig, W. (2012). Perceived externalities of cell phone base stations: The case of property prices in Hamburg, Germany. Environment & Planning A, 44(2), pp. 396-410. doi: 10.1068/a44292.

Carriazo-Osorio, F. (1998). Impacts of air pollution on property values: An economic valuation for Bogotá. Master thesis, Colombia.

Chalmers, J. A., & Voorvaart, F. A. (2009). High-voltage transmission lines: Proximity, visibility and encumbrance effect. The Appraisal Journal, 2009(Summer), pp. 227-245.

Chan, K. W., & Chin, T. L. (2002). A Critical Review of Literature on the Hedonic Price Model and Its Application to the Housing Market in Penang. In: The Seventh Asian Real Estate Society Conference, Seul, p. 12.

Chapman, D., & Ludlum, M. (2014). Teaching stigmatized property: You don’t have a ghost of a chance. Journal of Business Cases and Applications, 11. http://www.aabri.com/ manuscripts/131758.pdf.

Chau, K. W., Wong, S. K., & Yiu, C. Y. (2004). The value of the provision of a balcony in apartments in Hong Kong. Property Management, 22(3), pp. 250-264.

Damigos, D., & Anyfantis, F. (2011). The value of view through the eyes of real estate experts: A fuzzy Delphi approach. Landscape and Urban Planning, 101(2011), pp. 171-178. doi: 10.1016/j.landurbplan.2011.02.009.

Deaton, B. J., & Hoehn, P. J. (2002). The effect of hazardous waste sites on property values in zones of high industrial activity: A hedonic approach. In: AAEA 2002 Annual Meetings, Long Beach.

Dorin, A. G., & Simth, J. W. (1999). The impact of communication towers on residential property values. Right of Way, 1999, pp. 11-17.

Federal Aviation Administration. (1994). The Effect of Airport Noise on Housing Values: A Summary Report. Washington, DC.

Gamper-Rabindran, S., & Timmins, C. (2013). Does cleanup of hazardous waste sites raise housing values? Evidence of spatially localized benefits. Journal of Environmental Economics and Management, 65(3), pp. 345-360. doi: doi:10.1016/j.jeem.2012.12.001.

Gayer, T. W., & Viscusi, K. (2002). Housing price responses to newspaper publicity of hazardous waste sites. Resource and Energy Economics, 24(2002), pp. 33-51.

Gibbons, S., & Machin, S. (2005). Valuing rail access using transport innovations. Journal of Urban Economics, 57(1), pp. 148-169.

Greenberg, M., & Hollander, J. (2006). Neighborhood stigma twenty year later: Revisiting superfund sites in Suburban New Jersey. The Appraisal Journal, 2006(Spring), pp. 161-173.

Gregory, R., & Satterfield, T. (2002) Beyond perception: The experience of risk and stigma in community contexts. Risk Analysis, 22(2), pp. 347-358.

Gregory, R., Slavic, P., & Flynn, J. (1996). Risk perceptions, stigma, and health policy. Health & Place, 2(4), pp. 213-220.

Hajnal, I. (2012). Estimation of value modification factor with hedonic modeling: A case study. In: Creative Construction Conference 2012, June 30 - July 3, 2012, Budapest, Hungary.

Hajnal, I. (2015): Appraisal of work-in-progress buildings. Procedia Engineering, 123, pp. 224-232.

Hajnal, I. (2017). An investigation of property value impairment caused by noise, in the case of the Budapest Ferenc Liszt International Airport, Using a Hedonic Model. Periodica Polytechnica Social and Management Sciences, 25(1), pp. 49-55. doi:10.3311/PPso.8850.

Hamilton, J.T., & Viscusi, W.K. (1999). Calculating Risks? The Spatial and Political Dimensions of HazardousWaste Policy. MIT Press, Cambridge, MA.

Harrison, D., & Rubinfeld, D.L. (1978). Notes - The air pollution and property value debate: Some empirical evidence. The Review of Economics and Statistics, 60(1), pp. 635-638.

Hofmann, J. V. (1999). When bad things happen to good properties, Tierra Grande. The Real Estate Center Journal, 1278, 1999.

Horváth, K., & Hajnal, I. (2014). Value impairment of contaminated real estate. Periodica Polytechnica Social and Management Sciences, 22(2), pp. 141-148. doi: 10.3311/PPso.7389.

Hurd, B. H. (2002). Valuing superfund site cleanup: Evidence of recovering stigmatized property values. The Appraisal Journal, 2002(October), pp. 426-437.

Ihlanfeldt, K. R., & Taylor, L. O. (2004). Externality effects of small-scale hazardous waste sites: Evidence from urban commercial property markets. Journal of Environmental Economics and Management, 47(2004), pp. 117-139. doi: 10.1016/S0095-0696(03)00070-6.

Jud, G. D., & Winkler, D. T. (2006). The announcement effect of an airport expansion on housing prices. Journal of Real Estate Finance and Economics, 33, pp. 91-103. doi: 10.1007/ s11146-006-8943-4.

Kholhase, J. (1991). The impact of toxic waste sites on housing values’. Journal of Urban Economics, 30, pp. 1-26.

Lange, E., & Schaeffer, P. V. (2001). A comment on the market value of a room with a view. Landscape and Urban Planning, 55(2), pp. 113-120. doi: 10.1016/S0169-2046(01)00148-7.

Lazic, A., & Golaszewski, R. (2006). A Technical Note on Aircraft Noise and its Cost to Society. GRA, Incorporated, Corporate White Paper.

Linden, L., & Rockoff, J. (2006). There goes the neighborhood? Estimates of the impact of crime risk on property values from Megan’s laws; national bureau of economic research, Working Paper 12253.

Magill, A. W., & Schwan, C. F. (1989). Searching for the Value of a View. Research Paper PSW-RP-193. Pacific Southwest Forest and Range Experiment Station, Forest Service, U.S. Department of Agriculture, Berkeley, CA, 9 p.

McDonough, C. C. (2003). The impact of wireless towers on residential property values. Assessment Journal, 2003(Summer), pp. 25-30.

Moffatt, S., Bush, J., & Dunn, C. (2001). Even the birds round here cough’: Stigma, air pollution and health in Teesside. Health and Place, 7(1), pp. 47-56. doi: 10.1016/S1353-8292(00)00037-X.

Morgan, R. M. (1994). The expansion of the duty to disclosure in real estate transactions: It’s not just for sellers anymore. Florida Bar Journal, (February 31), 68(2), pp. 28-35.

Mundy, B. (1992). The impact of hazardous materials on property value, revisited. The Appraisal Journal, 60(4), pp. 463-471.

Nelson, J. P. (2004). Meta-analysis of airport noise and hedonic property values: Problems and prospects. Journal of Transport Economics and Policy, 38(1), pp. 1-28.

Nelson, J. P. (2008). Hedonic property value studies of transportation noise: Aircraft and road traffic. In: Baranzini, A., Ramirez, J., & Schaerer, C. (eds.). Hedonic Methods in Housing Markets, Pricing Environmental Amenities and Segregation. ISBN: 978-0-387-76814-4, Springer, 2008.

Neupane, A., & Gustavson, K. (2008). Urban property values and contaminated sites: A hedonic analysis of Sydney, Nova Scotia. Journal of Environmental Management, 88(2008), pp. 1212-1220. doi: 10.1016/j.jenvman.2007.06.006.

Roddewig, R. (1996). Stigma, environmental risk and property values: 10 critical inquiries. Appraisal Journal, (Oct), LXTV (4), pp. 375-387.

Saphores, J., & Ismael, A. (2005). Smelly local polluters and residential property values: A hedonic analysis of four orange county (California) cities. Estudios Económicos, 20(2), pp. 197-218.

Scholz, D. (1989). Hazardous waste contamination: Implications for commercial/industrial land transactions in Silicon Valley. Berkeley Planning Journal, 4(1), pp. 96-113.

Slovic, P. (2009). Talking About Recycled Water-and Stigmatizing It. Decision Research Report No.15-01. Decision Research March, Eugene, OR, p. 2009.

Townsend, D. A. (2004). Report on the national antenna tower policy review. Industry Canada, 2004 December 6, pp. 132-139.

Valdes, C. (2008). Comparing methodologies that correlate property values and airport noise. Master’s thesis, Saint Jose University.

Yeh, S. (2015). Revealing the rapist next door: Property impacts of a sex offender registry. International Review of Law and Economics, 44(2015), pp. 42-60. doi: 10.1016/j.irle. 2015.08.001.

Yu, S.-M., Han, S.-S., & Chai, C.-H. (2007). Modeling the value of view in high-rise apartments: A 3D GIS approach. Environment and Planning B: Planning and Design, 34, pp. 139-153. doi: 10.1068/b32116.

Organization, Technology and Management in Construction: an International Journal

Co-published with University of Zagreb, Faculty of Civil Engineering

Journal Information

Metrics

All Time Past Year Past 30 Days
Abstract Views 0 0 0
Full Text Views 110 110 12
PDF Downloads 35 35 9