Evaluating the potential impact of a proposed landfill.
This article is intended as a road map for appraisers who have a landfill consulting assignment. Construction or expansion of a solid-waste landfill typically triggers an extensive permitting process. Real estate appraisers are sometimes called on to present evidence and/or testimony for clients who support or oppose the proposed landfill improvements. This article sets forth information and techniques to assist the appraiser in providing that appraisal service. A literature review is included.
An article in a Florida newspaper begins, "New York has the Statue of Liberty. St Louis has its arch. And in coming years, one of Manatee County's most visible landmarks could be a 150-foot-tall mound of construction debris." (1)
This news item was published after a national waste management firm proposed a construction and demolition debris landfill to cover 130 acres of a 300-acre site. Local residents and environmentalists were outraged. On the other hand, a spokesman for the landfill firm was quoted in the same article as saying, "It's near an abandoned phosphate mine, the port, and the jail. If you're going to find a place in Manatee County to put it, that would most likely be it." (2)
The landfill company made a formal application for development approval, and hired experts to formulate a landfill design and prepare all the necessary application paperwork. In government offices, that process of review began. Meanwhile, nearby property owners began to organize in opposition. A "Stop Trash Mountain" Web site appeared. A coalition of developers who own nearby tracts of land hired attorneys, and began planning an organized opposition to the landfill's development applications. A public hearing, which would mark the first major hurdle for the proponents of the landfill, was scheduled. Shortly thereafter, the phone rang at an appraisal office.
The Consulting Assignment
Landfills are a very profitable commercial land use. In areas where growth and new construction are evident, landfill construction and expansion is a logical result
As with other new commercial uses, landfill construction is subject to the permitting requirements of local government bodies. In addition, the environmental and operational aspects of a landfill may require permitting from local, state, or federal agencies. For instance, landfills in the state of Florida are regulated by the Florida Department of Environmental Protection (FDEP).
During the landfill permitting process, the applicant may be required to present evidence or testimony regarding the suitability of the proposed landfill for a particular location. Individuals or groups who oppose the permit, such as environmental groups or neighboring property owners, also may have the opportunity to present information or testimony regarding compatibility and impact.
In either case, it is not uncommon for the opposing parties to engage the services of a real estate appraiser to evaluate the proposed landfill and provide a written report and/or testimony regarding the potential impacts. These assignments are a form of appraisal consulting.
Identifying Landfill Characteristics
As with all consulting assignments, it is first necessary to establish the scope of work. In this instance, the subject property is defined as the land proposed for improvement with a landfill. All pertinent physical, environmental, and legal aspects of the subject property must be identified, just as in a traditional appraisal assignment. Data must be assembled on the size and shape of the property; zoning and other land use restrictions; floodplain issues; soil type; and other relevant aspects. The development application for the landfill is often a source for this data, but the appraiser should verify this information.
Operational information for the proposed landfill is important to consider. This includes details such as type of permit sought, type of landfill proposed, special physical characteristics (i.e., clays, soils), man-made liners or other barriers proposed, projected useful life, topographical aspects (i.e., above-grade mounded landfill, infill of existing depression), and volume of waste forecast to be received (i.e., tons per week, cubic yards per day). The proposed improvements (specific characteristics of the proposed landfill) must then be identified, including the size and layout of active landfill cells as they relate the overall subject property.
It is also important to identify the operating aspects of the proposed landfill, such as days and hours of operation, location of entrance and exit points, location of front gate, and location of major site improvements (i.e., scale house, fencing, and landscape buffers).
Landfill Cells. Landfill cells are the portions of a landfill site that are used for permanent storage of waste. Other areas of a landfill are used for operations (internal roadways, dirt stockpiles, office, scale house, equipment shed, temporary waste-storage areas for recyclables or land clearing debris). Landfill cells can be active or passive. The working face of an operational landfill is the area where trucks are depositing garbage; Figure 1 is an example of an active construction and demolition (C&D) cell. When landfill ceils reach maximum capacity in size and/or height, they are closed. There is a prescribed capping-off process, after which the closed cells are usually planted with sod.
The number and size of landfill cells is dictated by the particular size and shape of an overall site, type of waste accepted, environmental factors, drainage characteristics, and numerous other site-specific criteria. Landfill cells are analogous to the developable pods in a large planned development. The planned development would have roads, drainage ponds, park sites, conservation areas, and other passive uses. The actual areas where development of structures could occur (i.e., Phase I, multifamily building site, shop ping center site) would represent the cells.
Landfill Liners. Landfill liners are layers of natural and/or man-made materials that line the bottom of a landfill cell. When working properly, a liner system traps and collects the leachate that drains through the layers of a landfill. (3) The collected leachate is then pumped away for treatment. Monitoring wells are typically required around the perimeter of a landfill to make sure that leachate is not escaping through the liner and polluting the land nearby. When leachate is detected in monitoring wells, it indicates that the liner system is leaking.
Various types of clay and soil are used in landfill liner systems, sometimes in combination with manmade elements. Thick layers of clay are sometimes proposed to form a watertight barrier that can function as a liner. Man-made liner systems are typically engineered from thick plastic sheets, fastened together with seams to form a waterproof barrier. A plastic garbage bag placed inside a garbage can is an example of a rudimentary liner system.
[FIGURE 1 OMITTED]
The reliability of a liner system depends on many factors, such as materials used, quality of installation, landfill operation policies, climate, and location. The reliability of liner systems is a subject of ongoing debate among stakeholders. For instance, many environmentalists argue that no liner system can be 100% reliable, particularly over decades and centuries of use. On the other hand, those who design and install such systems are adamant about the reliable performance of the landfill liners.
Landfill Categories. Landfills are arranged into major groupings based on the type and amount of waste that they are permitted to receive. Some general classifications for landfills are municipal solid waste (MSW); commercial; land clearing debris; and construction and demolition debris (C&D). Municipal solid waste (MSW) landfills are those that accept general household and commercial garbage, but do not accept hazardous waste. MSW landfills accept waste that produces leachate. Commercial landfills (sometimes referred to as Class III landfills) accept dry materials such as carpel cardboard, paper, glass, plastic, and furniture, which are not expected to produce leachate. Land clearing debris landfills accept only material of that type, such as branches, stumps, leaves, and other organic material. The construction and demolition (C&D) landfill differs from other landfills because it does not accept general household and commercial waste that is collected from curbsides by garbage trucks. The C&D waste is comprised of materials that are not liquid, and produce little or no leachete. Lumber and drywall are examples of materials that are generally allowed in C&D landfills.
Defining the Appraisal Problem: Case Study Example
While preparing for the landfill public hearing in Manatee County, a land use attorney contacted the real estate appraiser. The attorney explained that, while some old industrial improvements and a low-security jail for women were indeed located near the proposed landfill, the neighborhood was in transition. Over 8,000 housing units in six large-scale, planned developments had been approved already for development nearby, and were waiting for favorable market timing to come out of the ground. She explained that a tall proposed landfill of any type was thought to be a huge threat to these future developments, so the nearby property owners were strongly opposed. Could the appraiser analyze the impact of the proposed landfill on the planned developments and provide testimony at the public hearing?
When investigating a highly controversial situation, it is particularly important for the appraiser to identify the facts regarding the proposed improvements. The controversy and news coverage can quickly spread gossip and incorrect information through the marketplace. As with other appraisal assignments, it is therefore critical to determine the appraisal problem.
In this instance, the development application that had sparked the negative publicity was an invaluable tool for identifying the characteristics of the proposed landfill. Detailed maps, a conceptual site plan, reports on site characteristics, information about operating details, and data on environmental considerations were all required as part of the applicant's submittal package. In this case, a construction and demolition debris landfill was planned, and it would be a mounded type of landfill that would reach a peak of approximately 150 feet in height when its capacity was reached.
The proposed landfill site adjoined US-41, a four-lane, divided highway. The Port of Manatee facility is located nearby, with direct access to Tampa Bay. Proximity to the water was particularly bothersome to environmentalists, who were concerned about potential impacts on nearby aquatic preserves. A portion of the proposed landfill site included wetlands that would be impacted. In addition, environmental concerns were triggered because portions of the site were located in the 100-year FEMA floodplain and in hurricane storm-surge inundation areas.
Possible negative impacts from operation of a landfill in the proposed location also involved compatibility issues. The planned residential developments that had been approved were located approximately one-quarter mile to the east. Proposed improvements near the landfill site included parkland, a school site, and future home sites.
The landfill applicant proposed a Class III landfill, which would have a total site life of approximately twenty to thirty years. Construction plans included landfill cells, storm-water management ponds, a community collection center, a yard-waste processing storage area, and waste drop-off areas. Operating hours were to be Monday through Friday from 7 a.m. to 5 p.m. and Saturday from 7 a.m. to noon. The applicant proposed a liner system for the landfill, which it felt would mitigate any potential environmental problems. A combination of earthen berms and planted landscaping were proposed for the perimeter of the proposed landfill site to buffer the view of the operation.
Once the physical and operational characteristics of the proposed landfill have been identified as in the case study, the appraiser can gather information on the impact that improvements might have in the proposed location. As with any proposed construction, the locational characteristics, highest and best use of the site, and market area must be analyzed in order to evaluate impact.
Hit the Books
Before moving to project-specific research, the appraiser should first gain general background knowledge. In order to identify potential issues and research requirements for a landfill consulting assignment, it is helpful to study published works on the topic of landfill impacts. The Lure Library at the Appraisal Institute is a resource for such study, as are other sources for real estate information. General Internet-based research is also helpful to locate published materials in the state or region where the proposed landfill is located.
Additional research and study is possible using articles that examine the impacts of other types of stigma, sometimes known as NIMBY ("Not In My Back Yard") and LULU ("Locally Undesirable Land Uses"). Examples of such research are listed in the Additional Reading section at the end of this article.
Most appraisal-related publications that discuss landfills include a reference to stigma, or negative influence, which may impact adjoining land. The extent of the impact depends upon many factors, such as the type of landfill, size of landfill, physical characteristics of the site, types of neighbors, socioeconomic characteristics of the neighborhood, etc.
Recent research related to the case study landfill in Florida resulted in twenty articles for analysis. The most pertinent information on the relationship between landfills and adjoining properties was found in eleven of the documents, which are referenced in this article. General information regarding the impact of the proposed landfills upon neighboring properties is summarized herein. Because this research was undertaken for a landfill located in Florida, some general information from Florida sources is included. A summary of the research findings reported in the eleven articles follows. This information is also outlined in Table 1.
In "A Survey Approach for Demonstrating Stigma Effects in Property Value Litigation," (4) Flynn et al. state, "The values of individual properties are determined to some degree by the reputation of the area where they are located." (5) Buyers and sellers of condominium units, for instance, form immediate conclusions about property that is located on a popular beach. In a similar manner, buyers and sellers of single-family homes near a power plant may draw conclusions about such a property from just this locational reference.
The authors of this study go on to say, "The association of properties with hazardous, noxious, or repugnant conditions, including perceptions of health and environmental risks, can adversely impact values ... Property stigma is a socially constructed evaluation of a place; it is a sign or mark created and maintained by processes of social communication" (6) Put another way, if friends and family are impressed by a location, a person will be likely to perceive value in that location (popular beach). If coworkers and cousins express concern or dislike for a location (near a power plant), a person is likely to perceive less value for property in that location.
In "Appraisal of a Class III Landfill," Entreken states, "A Class III land[all is not typical real estate. A landfill is a short-term business enterprise that happens to be conducted on a parcel of land. Most real estate is considered to have a long useful life; this is not the case with a landfill." (7) He also notes, "A landfill generally has very poor public relations. Fills can emit odors and generally during their life they receive a certain amount of neighborhood protest and bad press" (8) Entreken explains that in appraising a Class III landfill, an appraiser must be aware that "there are continuing operations that burden the property for many years after the fill operation is completed and the fill is closed." (9)
In "Neighborhood Stigma Twenty Years Later: Revisiting Superfund Sites in Suburban New Jersey," (10) Greenberg and Hollander describe several types of environmentally damaged sites in New Jersey. The authors state, "Waste disposal and management sites are among the most stigmatizing land uses." (11) In other words, among the various categories of sites that may create stigma issues for neighboring properties, landfill and other disposal sites are among those that create the greatest market resistance due to stigma.
An article entitled "Evaluating the Impact of Solid-Waste Transfer Stations," by Kimball and Weaver, explains that such facilities are required in urban areas because "governments have extreme difficulty in obtaining voter approval of landfill sites near areas where the waste originates." (12) When considering locations for a landfill, the study found, "Citizens' groups usually favor industrial or commercial locations-away from residential developments." (13)
The Florida Center for Solid and Hazardous Waste Management Research, at the University of Florida, conducted landfill studies. In "Control of Odors from Construction and Demolition Debris Landfills," (14) Reinhart and Townsend observe, "Few waste management issues create more public displeasure than the production of odors at landfills, particularly landfills located near residential areas" They state that construction and demolition (C&D) debris landfills "often offer an ideal environment" for the production of hydrogen sulfide gas ([H.sub.2]S), because gypsum drywall releases the gas when it is exposed to water. This causes a rotten egg odor, and "Consequently C&D landfills can be major sources of [H.sub.2]S and are frequently the target of complaints from unhappy neighbors." (15)
The Reinhart and Townsend study profiles landfills that have experienced problems with unpleasant odors resulting from construction and demolition debris. In each instance, the landfills were causing odor problems in nearby residential areas. One of these was a C&D landfill in Broward County, which developed a "severe odor problem" shortly after disposal of debris in the aftermath of Hurricane Andrew. Therefore, a hurricane or other disaster could intensify the local impact of a Class III landfill.
Similarly, in "The Impact of Landfills on Residential Property Values," Reichert, Small, and Mohanty report that a survey of homeowners living near landfills found "the most severe nuisances are odor and unattractiveness," (16) and that "the residents interpreted odor from the landfill as a signal of potential health hazards." (17)
This link between odor and potential health hazards is also discussed by Reinhart and Townsend in their "Control of Odors" paper. Their research findings state that "short exposure at lower concentrations can have long-lasting adverse health effects," and "the gas can lead to immediate fatality at 1000 ppm" concentration. (18)
In another study from the Florida Center for Solid and Hazardous Waste Management Research, Urban Infilling Impacts on Florida's Solid Waste Facilities, Reinhart details problems that arise when residential development occurs too close to an existing landfill. (19) This study finds that "sites once considered remote are now located in areas increasingly ripe for development or redevelopment. In order to site solid waste facilities local governments have installed public works infrastructure such as roads and utilities, reducing the costs for owners of adjacent parcels." Therefore, "the potential for nuisance complaints against the existing solid waste facility operations has become an increasing reality in many areas of the nation ... public and private owners/operators of solid waste facilities have been forced to close their facilities pre-maturely, resulting in a loss of valuable solid waste capacity and increased cost for solid waste disposal." (20)
In a study entitled, "An Evaluation of the Impact of a Well-Designed Landfill on Surrounding Property Values," Bleich, Findlay, and Phillips describe a landfill in the San Fernando Valley in Los Angeles, California, that has created "no significant difference in either current prices or in appreciation rates (and thus prices over time) over a ten-year period." (21) Various appraisal methods for measuring an impact on property value were employed, including an analysis of over 1,600 sales transactions in three nearby neighborhoods.
Based on the study results, the authors conclude that "a landfill, if well-designed and -managed, can be a good neighbor and have no statistically measurable negative impact on surrounding property values." (22) However, the San Fernando Valley landfill that is the subject of the study is located on the north slope of a hill. The south slope, which abuts the neighboring homes, is undeveloped land owned by the county. Consequently, the actual dumping area is not visible from the neighboring homes. (23)
These findings are in contrast to those of Flynn et al. Their research uses various appraisal research methods to determine if a landfill waste disposal facility is the source of property value losses for nearby property owners. The landfill that is the subject of their study is a publicly owned and operated landfill in the Pacific Northwest. Through paired sales analysis, they find that property values next to the landfill are "lower than in comparable areas more distant from the landfill." (24)
Flynn at al. also interviewed buyers, sellers, and other market participants to understand market attitudes about the location. They find that "sale transactions or projects that did not occur may be as telling as those that did," (25) meaning that some transactions are not available for analysis because the prospective buyer or developer walked away from the property when they realized the extent of potential impact from the neighboring landfill. At the completion of the research, the authors link "the landfill with a stigma effect of public opinion about the desirability of housing and property" (26) nearby. They estimate the resulting loss in property value to be 8% to 10%. (27)
The Reichert, Small, and Mohanty study, "The Impact of Landfills on Residential Property Values," has been widely referenced in other research. This study of areas near five municipal landfills in Cleveland, Ohio, finds that neighborhoods of more expensive homes experience a greater loss in property values (5.5%-7.3%) than older neighborhoods with less expensive homes (3%-4%). The study results also indicate that the effect of a landfill is "essentially nonexistent for predominantly rural areas." (28)
Reichert, Small, and Mohanty report that "homeowners who own more expensive homes are more sensitive to landfill problems." (29) They also find that "in areas where the population is younger and better educated, very concerned about health issues and child safety, and has a significant housing investment to protect, the potential adverse landfill impact can be significant." (30) They conclude, "Buyers who are aware that a landfill exists in the area and who are concerned about potential nuisance and health problems will either avoid these properties or be induced to purchase them only at a significant discount." (31) In the Ohio market studied, the research indicates that a seller may still receive current market price for a home near a landfill "if potential buyers are not fully aware of the landfill and its associated effects." (32) This is unlikely to happen in most urban and suburban markets however, where laws may require that sellers must disclose all such information to a potential buyer.
In addition to the diminution in selling prices, this study found that "both nuisance and potential health problems are perceived to be related to a reduced level of marketability, lower selling prices, and increased homeowner flight [sellers taking a loss in order to quickly move out of an area]." (33)
In "A Review of Sanitary Landfill Impacts on Property Values," Cartee provides information on four studies of landfill value impacts to nearby residential developments. One of the studies indicates that the amount of waste handled at a particular landfill would influence property impacts. "For landfills handling large volumes of waste (i.e., over 500 tons daily) the rate of new residential construction and sales of residences and lots was much less than those landfills receiving 300 tons or less per day." (34)
Cartee also describes a study that finds development of a sanitary landfill can, in some cases, enhance property values. This generally occurs in remote locations where "the introduction of infrastructure such as new or improved access road, utilities, drainage, etc. [built in conjunction with the landfill] has actually stimulated additional development" with specific cases of "increases in land values and new construction." (35)
In his summary, Cartee states, "property value impacts will depend on several variables such as general community perceptions of environmental risks, density of the local population, proximity to population centers, and design features of the landfill, including its physical profile, volume and nature of waste handled, and other site characteristics." (36)
An article by Guntermann, "Sanitary Landfills, Stigma and Industrial Land Values," (37) reports on a study of the impact of landfills upon vacant industrial land. The study includes twelve landfills in the Phoenix area, with sales transactions studied over the period from 1984 to 1994. Ten of the landfills were MSW landfills, and two were landfills for commercial refuse only. The landfills in the study were a mixture of open and closed facilities. The study results indicate that "land values around open solid waste landfills are reduced relative to the values of other industrial parcels," and Guntermann concludes that the reduction of value "is attributable to solid waste landfills and not to refuse landfills." (38) This study also finds that closed landfills do not adversely affect industrial land value, and that commercial refuse landfills do not have a negative impact on vacant industrial land.
The final article, "Price Effects of Landfills on House Values," by Nelson, Genereux, and Genereux reports on a study of an existing landfill in suburban Minneapolis-St. Paul, Minnesota. (39) Sales of houses over a 10-year period were studied, with distances varying from 0.35 to 1.95 miles from the center of the landfill. The study included 708 sales, and the results indicate a reduction in value between 6% and 12%. The authors state that "given a choice between two sites offered for the same price and identical in every respect, except that one is closer to a landfill, home buyers will choose the site that is farther away." (40)
The study results indicate that the adverse price effect seen in the study was limited to a distance of about two miles, after which there is "little, if any, adverse price effect." (41) The landfill that was the subject of the study began operation in 1967, so the authors caution that it was not "built and operated pursuant to modern standards." Nonetheless, they conclude, "it seems from the analysis reasonable to assume that unless new landfills achieve a state of operations such that the urban housing markets view them as essentially benign, one should expect that landfills will have negative price effects." (42)
Methods Used for Measuring Impact
Many of the articles and case studies summarized here indicate that landfills generally have a negative impact on the property values of neighboring properties. This negative impact is caused by stigma due to the general perception that landfills have problems such as unpleasant odor and unattractive appearance.
The impact of landfills upon the market values of neighboring properties can be measured with both qualitative and quantitative research methods. As with any real estate study, quantitative measurements of market evidence require a relatively large number of real estate transactions from which to draw an adequate data. Proposed projects located in market areas that have landfill(s) of similar type and size relatively close by are the best candidates for this type of research. Techniques such as paired sales analysis and regression analysis can be used when sufficient data is available.
If the proposed landfill under study is quite unusual or atypical for the market area, it may be difficult to locate comparable existing landfills. Absent existing landfills for study, the appraiser cannot abstract sufficient property transactions nearby to illustrate landfill impact or lack thereof. A proposed landfill with more typical operating characteristics also may be difficult to study if the proposed location is of a market type with little transactional data available. For instance, it may be difficult to locate extremely tall landfills to study for transactional impact if the prevalent landfills in an area are either the "infill" type (a depression is filled until it reaches the grade of surrounding property) or relatively low-height landfills.
Qualitative analysis is appropriate for most types of proposed landfills. This research includes surveys with market participants, research of published newspaper accounts, and observation of occupancy patterns of property adjoining existing facilities. Qualitative research projects should be designed based on the characteristics of the proposed landfill and the characteristics of its location.
Collecting Market Data
Armed with information about the subject property, the proposed landfill, and the general research available through published literature, the appraiser is now ready to gather specific market data. If the appraiser is not familiar with landfills, the best way to acquire market data on typical landfill operations is to inspect several existing facilities.
A listing of similar landfills must first be created. Such an inventory can often be compiled using regulatory information available for a specific geographical area. The specific agency that has this information varies from state to state. For example, the Florida Department of Environmental Protection regulates landfill permitting and operation for all landfills in the state of Florida, while in New York, the Department of Environmental Conservation maintains the listing of active landfills. The appraiser must identify the appropriate permitting authority for the subject property, and investigate the type and extent of landfill inventory available through the applicable regulatory body.
The initial inventory of similar types of landfills should be refined by the appraiser to identify those landfills that are sufficiently comparable to warrant an inspection visit. For example, if the proposed landfill is in a rural area, visits to other landfills in rural locations would be most helpful. If the proposed landfill is relatively large (i.e., over 300 acres) inspection of landfills on sites of similar size would be helpful. Both public and private landfills are good sources of market evidence, and it may be helpful for the appraiser to research both types, regardless of whether the proposed landfill will be publicly or privately owned and operated.
Depending on the extent and reliability of information available from the landfill regulatory body, the appraiser may need to gather additional data from other sources in order to create a meaningful list of comparable landfills for inspection. For instance, if the regulatory body does not publish the land area of the landfills that it regulates, this information could be cross-referenced from property appraiser or assessor records. If the address or locational information available from the regulatory body does not provide useful information as to rural, urban, or suburban locales, use of aerial photography sites (such as Google Earth) can be most helpful in identifying landfills located in neighborhoods similar to the subject property.
After gathering information on comparable landfills, the appraiser then should refine the list to identify a significant sample of landfill operations to visit. The resulting inspections will enable the appraiser to become educated about landfill characteristics and operations, and to gather market evidence regarding the impacts, if any, that the comparable landfills create.
Local Market Evidence
During the inspection of comparable landfills, much important information about landfills and the neighborhoods in which they are located can be observed. The appraiser's time on these inspections can be used most efficiently if road maps and aerial maps are used ahead of time to identify all points north, south, east, and west of the landfill that are accessible by car. Viewing a landfill from as many different angles as possible creates more opportunities for the appraiser to see and hear landfill operations close by. Particularly for landfills situated on very large sites, the active area or working face of the landfill may be distant from the entrance or property boundary on any particular day.
A thorough inspection of every accessible area of the landfill property also provides the appraiser with the opportunity to inspect all neighborhoods that are close enough to the landfill to exhibit evidence of any impact, be it positive or negative. It is also suggested that inspections of the neighborhoods that surround the landfills take place during the facilities' operating hours. In this manner, the appraiser can assess the truck traffic to and from the landfill, and the noise levels associated with trucks and equipment located at the working face of the landfill.
Qualitative evidence of negative impact to nearby residential properties is sometimes found near active landfills. Such market evidence can include yard signs protesting landfill expansions, yard signs complaining about traffic, and evidence of high vacancies or other negative trends (Figure 2).
During the inspection trip, the appraiser can also identify streets and addresses for areas that are in close proximity to the landfills. These areas can be studied for sales activity and market value in a quantitative analysis when the appraiser returns to the office. Field identification of potential study areas is often more meaningful than simply delineating areas on a street map.
Additional market information regarding landfills may be available from an appraiser's client if the client is the applicant seeking the permit. Just as a shopping center client may have access to information about market levels of rent and expense for competing shopping centers, the landfill operator may have industry information available for analysis. Another source of information regarding landfill operations will be the employees of publicly owned and/or operated landfills. For instance, an appraiser who resides in a particular locale might schedule an appointment to tour the local government-owned solid waste operation and interview members of its management team.
Finally, newspaper accounts of landfill operations provide additional market evidence to the appraiser. A well-managed landfill may appear in the news after being the subject of a complimentary article in a trade publication, or after receiving an industry award. Conversely, operational mishaps at problematic landfills (fires, code violations, pollution of neighboring water wells) are often covered by local newspapers and television stations.
[FIGURE 2 OMITTED]
Forming Conclusions and Reporting Results
The appraiser is well positioned to form an opinion of possible impacts related to the proposed landfill after he or she has identified the scope of work, researched the subject property, gathered general information about landfill operating characteristics, become educated about existing landfills in the area, assessed the physical and locational aspects of the proposed landfill, and gathered market evidence of impacts from similar landfills. Numerous examples of well-situated landfills exist, and the appraiser may conclude that the proposed improvement fails into that category. Conversely, numerous examples of landfills that cause negative impacts on adjoining neighborhoods exist, and the proposed landfill may share characteristics more similar to that scenario.
Whatever the conclusion may be, it must be reasonable and well supported, and include the necessary steps outlined in the Uniform Standards of Professional Appraisal Practice (USPAP) for a consulting assignment. In reporting the results of the analysis, whether in a written report, verbal testimony, or combination of the two, the appraiser must also be careful to follow the reporting guidelines set forth in USPAP. (43)
Landfill Hearing: Case Study Example
The public hearing on the proposed landfill in Manatee County lasted for approximately seven hours. All 125 seats in the commission chambers were filled, and overflow crowds watched the proceedings on television monitors from other areas of the building.
The applicant explained plans for using a synthetic landfill liner to help protect the environment. Lawyers and expert witnesses from the landfill company explained various methods to buffer the view of the landfill and mitigate impacts from noise and odor. The applicant also offered a number of incentives, including payment of approximately $19 million in dumping fees over the lifespan of the landfill, an education center, a park, and dedication of land for road improvements.
The coalition of nearby property owners also presented testimony from lawyers and expert witnesses about the potential impacts that could result if the proposed landfill was approved at the hearing. The appraisal component of the presentation at the public hearing included several different types of analysis.
Market evidence from residential neighborhoods near similar landfills in central Florida was presented. Photographs and other descriptive evidence were also provided to illustrate the size, appearance, and operating characteristics of the proposed landfill.
Following the formal presentations and expert testimony, members of the public were able to provide their comments. Many of the comments were related to fears of environmental impact on nearby wetlands and Tampa Bay. A number of comments detailed concerns about diminished property values due to aesthetic problems including view, noise, and odor.
Late in the evening, the applicant requested a short break to prepare rebuttal testimony before the commission's formal vote. After the break, the applicant instead announced that it was withdrawing the application. Newspaper accounts quoted a landfill representative as saying, "We don't want to cram anything down anybody's throat; we value our relationship with Manatee County as a good corporate partner." The article went on to say that the applicant's firm "spent about two years planning and sank a substantial sum into environmental studies" while engineering the proposed landfill project. (44)
One news report stated that the incentives offered by the landfill proponents "were not enough to counter the wave of opposition from an unlikely alliance of residents, environmentalists, and developers from Manatee and Hillsborough counties." (45) Although the newspaper article did not mention it, a real estate appraiser was also involved in the process.
This article presents general information and techniques that an appraiser can use to evaluate the potential impact of a proposed landfill. The specific example in Manatee County, Florida, involved a proposed landfill in a particular place at a particular time. The application for that landfill was ultimately withdrawn by the applicant. This article includes information about both sides of the landfill impact question, because each proposed landfill is unique and must be analyzed in the context of its specific location.
Benjamin, John D., Emily N. Zietz, and G. Stacy Sirmans. "The Environment and Performance of Industrial Real Estate" Journal of Real Estate Literature 11, no. 3, (2003): 279-323.
Bond, Sandy. "The Effect of Distance to Cell Phone Towers on House Prices in Florida" The Appraisal Journal (Fall 2007): 362-369.
Bond, Sandy, and Ko-Kang Wang. "The Impact of Cell Phone Towers on House Prices in Residential Neighborhoods" The Appraisal Journal (Summer 2005): 256-277.
Boyle, Melissa A., and Katherine A. Kiel. "A Survey of House Price Hedonic Studies of the Impact of Environmental Externalities" Journal of Real Estate Literature 9, no. 2 (2001): 117-144.
Jackson, Thomas O. "The Effects of Environmental Contamination on Real Estate: A Literature Review" Journal of Real Estate Literature 9, no. 2 (2001): 93-116.
Saderion, Zahra, Barton Smith, and Charles Smith. "An Integrated Approach to the Evaluation of Commercial Real Estate" Journal of Real Estate Research 9, no. 2 (Spring 1994): 151-167.
(1.) Christopher O'Donnell, "Debris at Planned Landfill Could Form 150-Foot Pile," Sarasota Herald-Tribune, August 29, 2007.
(3.) Leachate is defined as "a liquid that has percolated through or drained from hazardous waste; waste that collects contaminants as it trickles through wastes, pesticides, or fertilizers." Appraisal Institute, The Dictionary of Real Estate Appraisal, 4th ed. (Chicago: Appraisal Institute, 2002), 161.
(4.) James Rynn et al., "A Survey Approach for Demonstrating Stigma Effects in Property Value Litigation," The Appraisal Journal (Winter 2004): 35-44.
(5.) Ibid., 35.
(7.) Henry C. Entreken, "Appraisal of a Class III Landfill," The Appraisal Journal (October 1987): 548-557, 548.
(8.) Ibid., 555.
(9.) Ibid., 548.
(10.) Michael Greenberg and Justin Hollander, "Neighborhood Stigma Twenty Years Later: Revisiting Superfund Sites in Suburban New Jersey," The Appraisal Journal (Spring 2006): 161-173.
(11.) Ibid., 162.
(12.) J. R. Kimball and William C. Weaver, "Evaluating the Impact of Solid-Waste Transfer Stations," The Appraisal Journal (January 1983): 9-19, 9.
(13.) Ibid., 9-10.
(14.) Debra Reinhart and Timothy Townsend, "Control of Odors from Construction and Demolition Debris Landfills" (working paper, Florida Center for Solid and Hazardous Waste Management Research, Gainesville, Florida, August 2003).
(16.) A. K. Reichert, M. Small, and S. Mohanty, "The Impact of Landfills on Residential Property Values," Journal of Real Estate Research 7, no. 3 (1992): 297-314,310.
(17.) Ibid., 299.
(18.) Reinhart and Townsend, 2.
(19.) Debra Reinhart, Urban Infilling Impacts on Florida's Solid Waste Facilities (Report # 0632001-07, Florida Center for Solid and Hazardous Waste Management Research, Gainesville, Florida, January 2007).
(20.) Ibid., 1.
(21.) Donald H. Bleich, M. Chapman Findlay III, and G. Michael Phillips, "An Evaluation of the Impact of a Well-Designed Landfill on Surrounding Property Values," The Appraisal Journal (April 1991): 247-252, 247.
(22.) Ibid., 252.
(23.) Ibid., 250.
(24.) Flynn et al., 36.
(25.) Ibid., 37.
(26.) Ibid., 44.
(27.) Ibid., 36.
(28.) Reichert, Small, and Mohanty, 298.
(30.) Ibid., 300.
(31.) Ibid., 299.
(32.) Ibid., 300.
(33.) Ibid., 310.
(34.) Charles P. Cartee, "A Review of Sanitary Landfill Impacts on Property Values," The Real Estate Appraiser & Analyst (Spring 1989): 44.
(35.) Ibid., 46.
(37.) Karl L. Guntermann, "Sanitary Landfills, Stigma and Industrial Land Values," Journal of Real Estate Research 10, no. 5 (1995): 533-542.
(38.) Ibid., 538.
(39.) Arthur C. Nelson, John Genereux, and Michelle Genereux, "Price Effects of Landfills on House Values," Land Economics 68, no. 4 (November 1992): 359-365.
(40.) Ibid., 359.
(41.) Ibid., 362.
(42.) Ibid., 365.
(43.) Appraisal Standards Board, Uniform Standards of Professional Appraisal Practice, 2008-2009 ed. (Washington, DC: The Appraisal Foundation, 2008), see especially Standards 4 and 5.
(44.) Susan M. Green, "Developer Trashes Landfill Project," Tampa Tribune, September 12, 2007.
(45.) Christopher O'Donnell, "Hauler Admits Defeat on Landfill, Application Is Withdrawn After County Commissioners Appear Ready to Reject," Sarasota Herald-Tribune, September 5, 2007.
Shown E. Wilson, MAI, is the owner of Compass Real Estate Consulting, Inc., in Lakeland, Florida. Wilson is a state-certified general real estate appraiser with over twenty-one years of eminent domain and litigation-related appraisal experience. She has provided testimony and analysis relating to several proposed landfills, and has inspected over fifty solid-waste facilities throughout Florida (known in her office as Landfill Tour 2007 and Landfill Tour 2008). Wilson has been an MAI member of the Appraisal Institute since 1993. She is a member of the International Right-of-Way Association and is past president of the Association of Eminent Domain Professionals. She has been qualified as an expert witness in courts throughout Florida as well as in U.S. Bankruptcy Court. Wilson has provided real estate appraisal services in over twenty-eight Florida counties and has authored articles and presentations on various appraisal topics. Contact: www.ShawnWilsonConsulting.com
Table 1 Summary of Landfill Impact Studies Authors Title Flynn et al. "A Survey Approach for Demonstrating Stigma Effects in Property Value Litigation" Entreken "Appraisal of a Class III Landfill" Greenberg and "Neighborhood Stigma Hollander Twenty Years Later: Revisiting Superfund Sites in Suburban New Jersey" Kimball and "Evaluating the Impact Weaver of Solid-Waste Transfer Stations" Reinhart and "Control of Odors from Townsend Construction and Demolition Debris Landfills" Reichert, Small, "The Impact of Landfills and Mohanty on Residential Property Values" Reinhart Urban Infilling Impacts on Floridas Solid Waste Facilities Bleich, Findlay, "An Evaluation of the and Phillips Impact of a Well-Designed Landfill on Surrounding Property Values" Cartee "A Review of Sanitary Landfill Impacts on Property Values" Guntermann "Sanitary Landfills, Stigma, and Industrial Land Values" Nelson, Genereux, "Price Effects of Landfills and Genereux on House Values" Authors Source Flynn et al. The Appraisal Journal (Winter 2004): 35-44 Entreken The Appraisal Journal (October 1987): 548-557 Greenberg and The Appraisal Journal Hollander (Spring 2006): 161-173 Kimball and The Appraisal Journal Weaver (January 1983): 9-19 Reinhart and Florida Center for Solid Townsend and Hazardous Waste Management Research, (working paper, August 2003 Reichert, Small, Journal of Real Estate Research and Mohanty (1992): 297-314 Reinhart Florida Center for Solid and Hazardous Waste Management Research, Report #0632001-07 (January 2007) Bleich, Findlay, The Appraisal Journal and Phillips (April 1991): 247-252 Cartee The Real Estate Appraiser & Analyst (Spring 1989): 43-47 Guntermann Journal of Real Estate Research 10, no. 5 (1995): 531-542 Nelson, Genereux, Land Economics 68, no. and Genereux 4 (November 1992): 359-365 Authors Location, Period Flynn et al. Pacific Northwest April 2002 Entreken Various Greenberg and New Jersey Hollander 1983-2005 Kimball and Texas Weaver Reinhart and Florida, New York, Townsend Virginia 1991-1998 Reichert, Small, Cleveland, Ohio and Mohanty 1980s-1990s Reinhart Various Bleich, Findlay, San Fernando and Phillips Valley, Los Angeles, California 1978-1988 Cartee Various Guntermann Phoenix, Arizona 1984-1994 Nelson, Genereux, Suburban Minneapolis, and Genereux Minnesota 1980s Authors Summary of Article Flynn et al. Class action lawsuit against existing MSW landfill. Describes telephone survey of nearby property owners, which indicates stigma effect. Supported paired sales analysis indicates 8%-10% diminution of value. Entreken Methodology for appraising a Class III landfill. Includes general information about odor and neighborhood protest. Greenberg and Observation of development on Hollander and around 6 former landfill sites after Superfund cleanup. General information on stigma. Kimball and General information on stigma. Weaver Study shows some transfer statoons do not negatively impact adjoining property, especially industrial property. Reinhart and Synopsis of odor problems and Townsend neighbors' complaints at 9 landfills where C&D waste was accepted. Describes a proposed project to measure malodorous emissions and to test various cover soils for effectiveness in mitigating the odor. Reichert, Small, Regression analysis study of and Mohanty 5 landfills indicates diminution of market value to adjoining residential property of 3%-7.3%, depending on quality of home and distance from landfills. Reinhart Case studies and literature review regarding negative impacts that result from landfill odor and noise. Bleich, Findlay, Regression analysis of 1,628 and Phillips home sales shows no landfill impact. Landfill is separated from the homes by a hill and vacant buffer land, and landfill is not visible from the homes. Cartee Summarizes 4 case studies that have mixed results. Landfills in remote areas are harder to study, but show no impact. Impact increases in more populated areas and near busier landfills. Guntermann Vacant industrial land near 12 landfills was studied. Open solid-waste landfills and open or closed refuse landfills have no impact. Nelson, Genereux, Reports on study of suburban and Genereux landfill receiving 500 tons of waste per day. Studied 708 home sales over 10 years. Negative impact up to two miles away and up to 12% diminution in value.
|Printer friendly Cite/link Email Feedback|
|Author:||Wilson, Shawn E.|
|Date:||Jan 1, 2009|
|Previous Article:||Financing and sales concessions: do we adjust or not? Can paired data analysis work if we don't?|
|Next Article:||A reality check on ground lease reversions.|