Cleaning up the Great Lakes: Housing market impacts of removing legacy pollutants

The Great Lakes and their tributaries make up the largest freshwater system on the planet, providing drinking water and recreational value to millions of people. Yet manufacturing plants left a legacy of toxic pollutants in the region, tarnishing it as part of the “Rust Belt.” In 1987, the Area of Concern (AOC) Program designated 30 areas in the region as having hazardous water quality. Almost 1.23 billion federal dollars have been spent since 2004 on grants to clean up the areas. Our paper provides causal estimates of the program's impact on local housing markets. We find negative effects of AOC designation on housing prices, indicating that consumers value clean water and incorporate information about water quality into their housing purchases. Grants exert positive effects on housing prices, confirming the valuation of water quality. The grants’ estimated benefits exceed their costs.

Duke Scholars

Author Robyn Meeks Sanford School of Public Policy