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The Effect of Lead Paint Abatement Laws on Rental Property Values
Author(s) -
Ford Deborah Ann,
Gilligan Michele
Publication year - 1988
Publication title -
real estate economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.064
H-Index - 61
eISSN - 1540-6229
pISSN - 1080-8620
DOI - 10.1111/1540-6229.00447
Subject(s) - abandonment (legal) , renting , lead (geology) , property value , enforcement , value (mathematics) , property (philosophy) , economics , business , real property , market value , law and economics , law , finance , political science , mathematics , philosophy , statistics , real estate , epistemology , geomorphology , geology
Lead paint is a source of childhood lead poisoning, a vicious disease with high costs to both the victims and society. Treatment of the disease requires placing the victim in a lead‐free environment. Laws have been enacted by many localities, which would require removal of lead from residential property. However, property owners have resisted the enforcement of these laws with threats of abandonment. Theory suggests that abandonment will occur only if the value of the rental property after removal of the paint is less than the cost of removal. This paper shows that these costs have already been discounted into property values. Data from Baltimore, Maryland indicates that the market has placed a value of approximately $15,250 per structure or $3,813 per rental unit on expected abatement costs. This value in most cases is less than the value of the rental property. Thus abandonment should occur infrequently.