The International Information Center for Geotechnical Engineers

The Economic and Social Impacts of Brownfield Redevelopment - Role of Liability, Regulation, and Economic Incentives

ECONOMIC IMPACT OF REDEVELOPMENT

On the surface Brownfield Redevelopment funding appears to be based on the subsidization of private-for-profit entities through taxpayer dollars. There are many reason where this public-private partnership serves the public good.

Most immediately, helping private developers reuse brownfields brings land back into the local tax base. This increases the funds available for local government services such as schools, roads, and fire departments. It also increases the value of surrounding land parcels. One EPA study reported an increase in residential property values of 5.1% to 12.8% after a nearby brownfield was assessed or cleaned up (USEPA 2014). By repurposing this land, the entire area becomes more appealing, which increases the land value and thus the tax rate.

For this same reason, if brownfields are converted to public lands such as parks or other community spaces, the redevelopment indirectly increases tax revenue by increasing surrounding property values (DeSousa 2009). Even if the investment by local governments is not partnered with private entities, redevelopment can help provide a space that fosters community, which increases the perceived value of properties in that community (Kotoval 2016).

For investors the alternative to redeveloping brownfield sites is to develop greenfields, which are defined as previously undeveloped land. Greenfields are located in suburban and rural areas, and have typically previously been used for agricultural purposes. Developing greenfields contributes to suburban sprawl, and leads to increased infrastructure costs to municipalities (Paul 2012). It is also often more expensive for investors in the instance of  residential development (DeSousa 2000).

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