Looking Under the Hood 5.6 – A Recent Study of Dioxin Groundwater and Soil Contamination Impacts to Assessed Home Values in Midland, Michigan

Real estate pricing research provides evidence that properties potentially exposed to perceived or actual health risks through groundwater, soil, and air may experience price impacts. Looking Under the Hood reviews publications that illustrate the theoretical, methodological, and data challenges faced by scholars and practitioners studying contamination and its impact on property values.  

Zwickle, et al (2019).,[1] explored the impacts of off-site groundwater and soil contamination from dioxins in Midland, Michigan. Dow Chemical Company’s local facility was found to be the source of the dioxin constituent, which had migrated into the Tittabawassee River and surrounding residential properties. The authors constructed a multilevel, longitudinal model using 229 home observations from the Midland City assessor’s office. Zwickle, et al. noted limitations of using assessed values compared with actual transactional date, but without control measures for such subjectivity. The data set included 50 impaired homes (above 250/ppt dioxin limit) and 179 unimpaired residences (below the actionable level). The impaired properties were subsequently remediated. Little to no difference was found between impaired and unimpaired assessed homes.

The authors do mention that the model was limited by not using transactional data and few available independent variables (ie. location and age). They ultimately found that dioxin contamination decreased assessed values for the unremediated homes that had been below the actionable level of 250/ppt.  A 1/ppt increase in dioxin concentration decreased the predicted assessed home value by $9 to $27. This impact was statistically significant, but not for the remediated homes. The indicated property value diminution was similar for both sets of data.

[1] Zwickle, Adam, Jeffrey G. Cox, Jie Zhuang, Joseph A. Hamm, Brad L. Upham, Minwoong Chung, Shannon Cruz, and James W. Dearing. “The Effect of Dioxin Contamination and Remediation on Property Values.” International Journal of Environmental Research and Public Health 16, no. 20 (2019).