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IMPACTS OF HAZARDOUS WASTE SITES ON PROPERTY VALUES AND

REMEDIATION TECHNIQUES

Article · October 2004

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IMPACTS OF HAZARDOUS WASTE SITES ON

PROPERTY VALUES AND REMEDIATION
TECHNIQUES

Data · January 2016

DOI: 10.13140/RG.2.1.1835.0163

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 IMPACTS OF HAZARDOUS WASTE SITES ON
PROPERTY VALUES AND REMEDIATION TECHNIQUES
Abstract
The role of stigma in retarding the
value of properties on or near hazardous
waste sits has become a serious concern
for the valuers and assessors. This paper
presents the broad causes and impacts of
stigma on commercial as well as residen­
tial properties due to presence of hazard­
ous waste. An attempt has also been
made to define and explain hazardous
waste and important techniques for
remediation of hazardous waste sites. The
cost of the each remediation technique
depends upon many factors which are
wholly site dependent and valuers may get
accurate cost through environmental con­
sultant.
Introduction
Stigma in property values due to pres­
ence of hazardous waste site is the dimi­
nution of value resulted when individuals
perceive a decrease in the benefits asso­
ciated with the property. Stigma is loss of
property value resulting from a property’s
bad reputation1. It is an intangible factor
which may not be measured in terms of
cost to cure. When the properties are
located on or near hazardous waste site,
the stigma normally reflect the health risks
of the hazardous waste which may not be
1172
—Prof. K.N. Sheth
ME, MBA, LL.M
Vallabh Vidyanagar
(Gujarat)
in equilibrium with actual clean up costs3.
The stigma may be beyond the value of
health risks or environmental harm caused
by hazardous waste. Stigma is the market
imposed penalty due to adverse public
perception and is extremely difficult to
quantify.
Causes and impact
The value of stigma on account of
proximity of the hazardous waste site
depends upon distance. The more the
distance less is the stigma and vice
versa. In India the impact of environment
is normally considered up to 10 km radius
from the source of the pollution. The effect
of the environment is substantial up to 2­
3 km and then the impact decreases.
However, it may also depend upon the
meteorological conditions, initial concentra­
tion of hazardous pollutants and the miti­
gation measures taken by the industries.
Thus, stigma vary from one site to another.
The possible causes of the stigma is
uncertainty and financing unavailability,
uncertainty regarding public perception.
Uncertainty
It is unknown as to how much the
public is willing to pay for property in the
neighbourhood. Even after the property
Indian Valuer / October, 2004
has been fully remediated, the stigma still
persists3. There is still a fear from possible
public liability and additional future health
hazard. The public show lack of interest
in owning property on or near the hazard­
ous waste sites. Thus, uncertainty is
contributed from 3 sources.
(i) Uncertainty about health risks after
clean up operations.
(ii) Uncertainty regarding the need to do
additional remediation work in the
future.
(iii) Uncertainty regarding how others might
perceive the property.
Non-availability of financing
Another important cause is the non­
availability of financing for such properties.
Investors, lenders and others are actively
working to avoid any interest in such sites.
The possible reasons are -
(a) Fear of hidden remediation cost
The apprehension that the cost of
ongoing monitoring may increase.
(b) Buyer’s trouble factor
Buyers feel that they should be com­
pensated monetarily for the trouble of
making necessary improvement al­
though buyers might be aware of the
cost to control and cost of cure
problem.
(c) Lack of s a le a b ility and
mortgageability
The properties located on or near the
hazardous waste site may not be
Indian Valuer / October, 2004
easily resold at a reasonable price or
perhaps not at any price. No financier
may be ready to finance the stigma­
tized properties.
(d) Fear of public liability
The fear of the future legal action by
environmentalists or regulatory bodies
always exist and a mental harass­
ment retards the value of the commer­
cial or residential properties located
on or near the hazardous waste site.
They create a situation similar to
‘obsolescence1 though the properties
are never contaminated. The only
problem is that such properties ex­
isted near the hazardous waste sites9.
Impacts on property values
The serious impacts of residential as
well as eommercial / industrial properties
are enlisted as under :
(i) Permanent stigma related to change
in the demographic composition of
the neighbourhood3.
Even when the site has been cleaned
up, the high income people do not
return and the original price of the
property is never restored. High in­
come people move out and are re­
placed by low income people.
(ii) Rezoning of the land3
A property may be rezoned to a lower
use to permit less stringent remediation
approach. Otherwise, treatment of
many tons of soil may be necessary.
In such situation, the area's highest
and best use is lowered. The average
1173
 property has a lower value per square
metre compared with the properties
not located near hazardous waste
sites.
(iii) The effect on commercial proper­
ties are regainable comparatively
faster3
The impact of the commercial proper­
ties located on or near hazardous
waste site is very similar in all aspects
as discussed in residential properties.
However, recovery of the impact is
more rapid than for residential prop­
erty. It can be stated that the evalu­
ation of potential liability and risk
become more accepted and investors
are mentally prepared to work with
these properties.
It is possible to deal with the hazard­
ous waste sites to remove the threat.
Hazardous waste and hazardous waste
sites
Definition and concept
In the U.S.A., Resource Conservation
and Recovery Act, 1976 RCRA Legislation
has defined hazardous waste "as solid
waste or combination of solid waste which
because of its quantity, concentration or
physical, chemical or infectious character­
istics may cause or significantly contribute
to an increase in mortality or an increase
in serious irreversible or incapacitating
reversible illness or pose substantial present
or potential hazards to human health or
environment when improperly treated,
stored, transported or disposed of or oth­
1174
erwise managed” while definition refers to
‘solids’, it has been interpreted to include
semisolids, liquids and contained gases4.
The hazardous waste exhibits any or
all of the four characteristics viz., corrosivity
(waste that is acidic or alkaline), ignitability
(waste easily ignited and thus posing a fire
hazard during routine management), reac­
tivity (waste capable of potentially harmful,
sudden reaction such as explosion) and
toxicity (waste capable of releasing speci­
fied substances to environment in signifi­
cant concentration).
According to International Valuation
Standard (6,h edition) the Guidance Note
No.7 which is in force from April, 1996,
Hazardous substances are toxic sub­
stances. They have been using both these
terms interchangeably. It is defined, “Haz­
ardous substances involve specific mate­
rials that by presence or proximity may
have adverse effect on property value
because of their potential to cause harm
to life forms2. Such materials may be on
the site or they may be found in or on the
land. They may also be offsite and in some
instances they may be air borne2.
Hazardous substances with respect to
valuation is any material within, around or
near the property being valued that has
sufficient form, quantity and bio-availability
to create negative impact on the property’s
market value2.
‘Toxic’ describes the status of a ma­
terial whether gas, liquid or solid that in its
form, quantity and location at the date of
valuation has capacity to cause harm to
Indian Valuer / October, 2004
life forms2. Toxicity refers to the degree or the extent of such capacity2.
The presence of hazardous material leads to value diminution because of following
problems5.
* Potentiality of fire and explosion (due to storage of transportation of hazardous
materials or use of hazardous materials in process).
* Emission of obnoxious odours from burning or decomposition of organic matter.
* Potentiality of corrosion to steel.
* Toxic materials which have detrimental effects in human health.
Remediation of Hazardous Waste Sites
The remediation of hazardous waste site means one of the two basic operations.
1. Removal of hazardous wastes and contaminated materials followed by.
2. Treatment, destruction and containment on site5.
Brief summary of some important techniques is given in Table -1.
Table - 1
Brief summary of some im portant techniques of remediation of hazardous waste

SI. Techniques Objectives

1. Containment methods6: Prevention of migration of liquid

a. Slurry walls
b. Grout curtains
c. Sheet piling cut off walls
2. Extraction methods6:
a. Ground water pumping
b. Soil gas extraction using
granular activated carbon
3. Low temperature thermal
desorption5:
hazardous wastes or leachates
containing hazardous constituents.
Containment involves construction of
impermeable membrane to retain
liquid within the site or to divert the
ground and surface waters away from
the site
Pumping of contaminated ground
water to the surface for treatment and
reinjecting and active or passive
extraction and treatment of soil gases
produced in waste deposits.
Extraction wells or combination of
Extraction and injection wells may be
used.
Increase rate of mass transfer of
contaminants to the gas phase, by

Indian Valuer / October, 2004 1175

SI. Techniques
4. Thermal processes4:
5. Physical treatment6:
a. Solvent extraction
b. Washing
6. Solidification and stabilization:
a. Inorganic processes using
cement and pozzolana
b. Organic processes using
thermoplastic and organic
polymer processes
1176
Objectives
using ambient air, heat or mechanical
agitation. The contaminants when
they are in gas form can be treated by
thermal or physical methods.
Degradation of substances by high
temperature oxidation under
controlled conditions into gaseous
products and ash. This can be used
to destroy the organic contaminants in
liquid, gaseous or solid waste
streams. Sources of air pollutants in
hazardous waste incinerators include
products of incomplete combustion of
organic and conversion of certain
inorganic constituents in gaseous or
particulate contaminants from a gas.
Air pollution control devices are
essential.
Separation of components in waste
specific situation. EPA has defined
soil washing as a separation process
that uses water as solvent and
chemical extraction as a process that
uses additives such as surfactants or
chelating agents. The end products of
these techniques include lesser
volumes of hazardous wastes which
must be managed.
To minimize the rate of contaminant
migration from the hazardous waste
by mixing additives (stabilization) and
altering physical nature of waste by
employing additives (solidification).
These would encompass reduction in
waste toxicity and mobility, this thus
include both micro as well as macro
encapsulation.
Indian Valuer / October, 2004
 The cost of each of the remediation technique cannot be generalised as it depends
upon existing site conditions. The valuer may hire the services of environment consultant
to work out ‘detailed cost to remediation’ of hazardous waste sites by ESA
methodology89.
References
1. International Association of Assessing Officers “Standard on the Valuation of
Property Affected by Environmental Contamination” Approved August 1992 PP:12
(1992)
2. International Valuation Standards, sixth edition, “International Valuation Guidance
Note No. 7 - Consideration of Hazardous and Toxic Substances in Valuation”
PP:300-301 (1996)
3. ‘Property Values, Stigma and Superfund’ US EPA, (2002)
4. Michael D. Lagrega and Philip L. Buckimham and Jeffrey C. Evans, “Hazardous
Waste Management” McGraw Hill, USA second edition PP:677-739 (2001)
5. Ralph L. Stephenson, James B. Blackburn, Jr. “The Industrial Wastewater System
- Handbook” Lewis Publishers, New York PP:346 (1998)
6. Willima C. Blackman, Jr “Basic Hazardous Waste Management”, Lewis Publishers,
New York, second edition PP:231-258 (1996)
7. K.N. Sheth and Darshak M. Pandya, “Extent of Hazards of Hazardous Waste
Generated by Vatva Industrial Complex”, Journal of Engineering & Technology,
Sardar Patel University Vol. 14, PP:102, March 2001
8. Prof. K.N. Sheth, “Synthetic Value Determination on Environmental Contamination
using ESA” Indian Valuer No. XXXV, PP:881-885, September (2003)
9. Prof. K.N. Sheth, “ESA for Valuation of Contaminated Assets” Indian Valuer
No. XXXV, PP: 325-328, April 2003.

CORRIGENDUM
All the readers of Indian Valuer are hereby requested to please read the last
eight lines of the article “Real Estate is Always a Seller’s Market" by Shri P.K.
Singha Roy on page No. 862 (July 2004 issue) as given below :
“The writing on the wall is already there with premium locations in the prem ier
com m ercial city of the country like Nariman Point, Cuffe Parade and Bandra-Kurla
Complex remaining cluttered with vacant spaces that were acquired at sky-high
prices and now begging for buyers". .

Indian Valuer / October, 2004

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