Does Environmental Cleanup Lead to Environmental Gentrification?, with Elaine Hill

Notable Quotes

• Benefits and costs of environmental policies for communities: “If residents are paying higher prices to live in that neighborhood once it’s cleaned up, we have to weigh that increased price versus the increased environmental benefit that comes from the program.” (11:29)
• Corrective Action Program helps community residents: “The policy implication of our findings is that the original beneficiaries, whose environmental justice the cleanup was intended to support, are the people benefiting in this context. That’s somewhat rare for the various programs that have been evaluated in other contexts—so we’re pretty pleased, because that’s one of the concerns with these programs.” (19:42)
• Combining economics and health research can inform policymaking: “When economists contribute to understanding the health impacts of environmental exposures, we can provide these much-needed estimates to inform which regulations could have substantive benefits to health.” (27:57)

Top of the Stack

• “Who Benefits from Hazardous Waste Cleanups? Evidence from the Housing Market” by Alecia W. Cassidy, Elaine L. Hill, and Lala Ma
• “Moving Beyond Cleanup: Identifying the Crucibles of Environmental Gentrification” by H. Spencer Banzhaf and Eleanor McCormick
• “The Economics of Environmental Justice, with Samuel Stolper and Catherine Hausman” on Resources Radio
• “Inequality, Information Failures, and Air Pollution” by Catherine Hausman and Samuel Stolper
• “Sorting Over Flood Risk and Implications for Policy Reform” by Laura A. Bakkensen and Lala Ma
• Scene On Radio podcast, Season 5, The Repair series

The Full Transcript

Daniel Raimi: Hello and welcome to Resources Radio, a weekly podcast from Resources For the Future. I’m your host, Daniel Raimi.

Today we talk with Dr. Elaine Hill, Associate Professor of Health Economics in the Departments of Public Health Sciences, Economics, and Obstetrics and Gynecology at the University of Rochester. In today’s episode, we’ll ask Elaine about a recent working paper published with coauthors Alecia Cassidy and Lala Ma that examines the effects of cleaning up hazardous waste in local communities. Specifically, the authors seek to determine whether these cleanups lead to environmental gentrification, where longtime residents are displaced and the benefits of the cleanup accrue to higher-income newcomers. This issue has major implications for environmental justice outcomes, and the results of their paper and their implications are fascinating. Stay with us.

Elaine Hill from the University of Rochester, welcome to Resources Radio.

Elaine Hill: Thanks for having me.

Daniel Raimi: You work on all sorts of fascinating energy and environmental topics related to health impacts, and we’re going to talk on today’s show about a recent paper that you have with a couple of folks. But first, we always ask our guests how they got interested in working on environmental issues—or, in your case, environmental and health issues. What inspired you to get into this field?

Elaine Hill: There is a way in which my interests date back to before graduate school; my family has always been outdoorsy and interested in food systems and how we might be able to contribute to our own health or the health of our community by buying locally—that sort of thing. In terms of my interest in environmental health and the intersections within economics, I was inspired when I was a graduate student in Ithaca.

Josh Fox came and did a premiere of his documentary, Gasland, in 2010. There were protests and interest in the colloquial term “fracking” and shale gas. At the time, I had never heard of it, and I did a bunch of digging in my library. I don’t think Google Scholar existed back then, but searching for research on the topic gave me nothing.

I pivoted towards trying to understand the impacts of fracking on health for my dissertation. Ultimately, the exciting part about studying that particular industry is that oil and gas can impact many things in a community: migration, income, employment, housing prices—all sorts of community change. In terms of the environment, oil and gas can impact air, water, light pollution, and noise pollution.

Studying that one industry (and I’ve been doing that for over a decade) opened up my research program to study all of these things in a way that I doubt I would have if I hadn’t gone to see a documentary the day before my 27th birthday. Now, my research program has expanded, but that’s where it comes from.

Daniel Raimi: That’s so funny. In lots of ways you and I share that past, because my initial work on energy and environmental topics was also on fracking right around that same time. Your work on the health impacts of fracking has been valuable; I’ve cited it over the years. Thank you for that work, and thanks to Josh Fox for making the movie and getting us and so many other people interested in this topic.

But, today, we’re not going to talk about fracking: we’re going to talk about a new working paper authored by yourself, Alecia Cassidy, and Lala Ma. It’s a National Bureau of Economic Research working paper about how the benefits of hazardous-waste cleanup are distributed across communities. Before we talk about that specific issue in your findings, can you get us started by helping us understand the basics of the program that you study in the paper—the Corrective Action Program—and how it differs from other federal cleanup programs that people might have heard of, like Superfund or the Brownfields Program?

Elaine Hill: We study the Resource Conservation and Recovery Act, which we lovingly call “RCRA.” The Corrective Action Program was an extension of the original law that was passed in 1976. This is somewhat unique compared to the other ones that you mentioned in that it’s meant to be a proactive program. It targets currently active firms or operators that are using or managing hazardous waste. We’re thinking of plants such as chemical manufacturing plants, oil refineries, or lead smelters, and we’re thinking about ways to regulate and manage hazardous waste to avoid these potential threats to human health and the environment. Whereas Brownfields or Superfund take on places that are defunct or had historical mistakes in hazardous waste management. The remediation is different, although it’s not always necessarily the case that RCRA sites are less contaminated. There is still room for future research, but the important thing is that these sites are continuing to operate after the Corrective Action Program goes into place.

Daniel Raimi: Can you give us a sense of how these sites are distributed across the United States? How many are there, and how big are they? What types of environmental or health consequences would we typically be worried about for the people who live in those communities?

Elaine Hill: They’re national, and they’re pretty much everywhere. We have a map in the paper that shows that they may be more distributed in the Northeast or in population centers that have more active manufacturing, but there’s close to 3,700 sites that are tracked in the Corrective Action Program.

The US Environmental Protection Agency (EPA) estimates that they span about 17.9 million acres, which is approximately 17.5 percent of all developed land. It’s extensive. We’re particularly worried about waste that could be released into groundwater, but also into soil, surface water, and there could be some air-pollution components here.

We have studies that suggest that waste releases along all of those mediums could have impacts on health. Future research really could dig into that more, in terms of what we might be concerned about for the health of people living nearby. But because it’s chemical manufacturing or preserving, steel mills, or all these different types of facilities, including commercial landfills, the actual toxins vary across facilities.

Daniel Raimi: The program covers, as of 2011, about 18 million acres. And to give people a sense of context, the state of Maine is about 22 million acres. Does that sound about right?

Elaine Hill: That sounds right.

Daniel Raimi: I was surprised by the geographic extent of these facilities.

Elaine Hill: We were, too. It wasn’t necessarily something that we anticipated prior to beginning this work.

Daniel Raimi: Other programs, such as Superfund or Brownfields, are much more talked about than this program, and yet this program, if you look at its geographic footprint, is much more substantial.

Let’s dig in now to some of the specific questions that you and your coauthors ask. Your paper, which is linked in the show notes, is titled “Who Benefits From Hazardous Waste Cleanups: Evidence from the Housing Market.” Can you give us a bit of intuition for the hypotheses that you end up testing in the paper? For example, why might there be uneven distributional consequences of cleanups from these facilities, and how might they affect outcomes, like environmental justice outcomes that we talk a lot about on the show?

Elaine Hill: One of the first places we begin in this paper is thinking about whether cleanups could have a benefit to housing values in the community. That’s the first-order question that we ask. But in terms of the second component, with respect to distribution and thinking about environmental justice, we are following Banzhaf and McCormick, who pointed out almost 15 years ago that improving a neighborhood through one of these types of programs could result in increased housing prices, which results in what economists calls “sorting.”

People moving into that neighborhood are different from the people who were there before, and when that occurs, the cleanup could price out people who were originally in the neighborhood. This means that the community that was exposed to the site and experienced the harms may not benefit from the cleanup itself.

Our research here tries to understand what some people call “environmental gentrification.” When a policy with good intentions comes in and tries to fix environmental harms, it can exacerbate some of the harms to the population that was there originally. We are most interested in evaluating this program and asking whether there was a welfare improvement from this investment by the EPA and the federal government in the management of hazardous waste.

If we don’t take into account whether people respond by sorting, or the housing values of the community change, it’s difficult to say what that welfare improvement would be. If residents are paying higher prices to live in that neighborhood once it’s cleaned up, we have to weigh that increased price versus the increased environmental benefit that comes from the program. This is the crux of what we’re trying to do in this paper: understand whether this is happening in the context of the Corrective Action Program under RCRA.

Daniel Raimi: I’m going to ask you in a second what you found on that question, but first, for our listeners who aren’t economists and haven’t looked at this world of research that focuses on housing and property values as a proxy for other outcomes that we care about like exposure to environmental risks, can you talk about the use of property values to try to get at some of these underlying outcomes that we care about? What are the potential limitations of using that metric?

Elaine Hill: Before I go forward, I want to say that I have put on my environmental economics hat throughout my research, but it’s not the space in which I was trained. I am the health economist on this team.

My understanding is that we as economists have used what’s called “hedonic analysis,” or housing values, to understand people’s willingness to pay to live near environmental nuisances. If we think about valuing distance to a road, exposure to a toxic release–inventory site, or some of these classic analyses that have taken place in the literature, economists are trying to understand the value that people place on nuisances that might be observed.

More recently, there have been some pitfalls of this research and thinking through the information that individuals might have. Some of the environmental nuisances that we might be interested in studying may not be observable or understood by the community. There’s some recent work looking at hidden pollution and exposure and how that may disproportionately affect different populations based upon their socioeconomic status and perpetuate disparities.

The classical approach is to think that the housing market has complete information and is efficient at evaluating that willingness to pay, but there’s more recent work suggesting that we need to be careful about some of those assumptions. The research is trying to better understand some of the mechanisms that would violate those assumptions. We were talking about migration, sorting, and people moving in a dynamic way, and that’s where we can see either worse environmental justice outcomes because of how people dynamically move and how the housing market works, versus what we would think of as a static outcome.

Daniel Raimi: You definitely got the key points. People can dig more into this by reading the full paper and catching up on other Resources Radio episodes. We did an episode with Sam Stolper and Catie Hausman a couple years ago.

Elaine Hill: Perfect. That’s a paper that I was talking about.

Daniel Raimi: Let’s cut to the chase now that we have covered useful background information. Can you highlight some of the key results that you and your coauthors found?

Elaine Hill: We find an increase in housing values following these cleanups. The housing-value increases persist for a number of years after this Corrective Action Program process. We find that this impact is affecting the lowest deciles of the housing-price distribution. Individuals who may be lower income seem to have a larger relative impact.

In terms of the other part that we investigate, we do not find any evidence of sorting. We use 17 different measures of characteristics, and we do not see any statistically significant change in characteristics for the communities living near these facilities. We went into this thinking that we’d see at least one from a statistical-chance perspective, but it’s very weak evidence. Where we stand (and of course this paper has to be peer reviewed, and we’ll see if pushing this result more and more with help from our colleagues will keep it), we ultimately conclude that the benefits of these improved housing values from the Corrective Action Program seem to be sticking around for the community that was possibly harmed by living near these facilities prior to the cleanup.

Daniel Raimi: Would a colloquial way of putting that be that this program seems to be reducing environmental justice disparities?

Elaine Hill: We’re cautious, because this is early work, but we are excited that that could be a conclusion.

Daniel Raimi: People can read the paper to see all the details, but it might be worth pointing out a couple of the specific outcomes that you look at. There are three types of outcomes. One of them is income and education—things like household income, education levels, public-assistance dependency. There are demographic characteristics, such as the race of the household or the population of the household that is white or under 18 years old. Then there are housing variables, like the people who live in mobile homes or people who’ve moved in the last five years.

That you find no statistically significant negative impacts across all those 17 outcomes is really interesting. There are probably lots of policy implications that our listeners are thinking about, but would you care to highlight a few of them that you think are particularly important or interesting?

Elaine Hill: Alecia, Lala, and I talked about this, and the part that we landed on is that if we want to understand who’s benefiting from a policy—and this policy in particular—we want to understand whether people are moving or things are changing in response to the policy.

While it seems like we’re just stating again that the RCRA program seems to have been improving environmental justice problems with these hazardous-waste sites, we think the policy implication of our findings is that the original beneficiaries, whose environmental justice the cleanup was intended to support, are the people benefiting in this context.

That’s somewhat rare for the various programs that have been evaluated in other contexts, so we’re pretty pleased, because that’s one of the concerns with these programs. This can help EPA in terms of thinking about either expanding this program, or, possibly, there’s ways that future research could understand why, in this context, we don’t see in this context the type of sorting that we see in other contexts.

Daniel Raimi: Could you expand on that? If the results hold, why is it that the Corrective Action Program appears to be reducing some of these environmental justice burdens, as opposed to other programs that might be exacerbating environmental justice concerns? Do you have any thoughts or guesses on that? I know you’d have to do the research to answer it definitively, but I’d love to hear your initial thoughts.

Elaine Hill: My first thought here is that these facilities are still in operation. It’s very possible that the community is not seeing too much of a difference. They live near these facilities that still exist and have been running for, possibly, 40 or more years—they’re a fixture in the community. For some of the other programs, there might be signage, and the whole area would completely change after some sort of cleanup.

But in this case, there is possibly hidden contamination that the community may not be aware of. Other than that, it may also be—or at least Lala and I think (I don’t want to speak for Alecia)—that this hidden contamination component might be affecting groundwater or soil on these sites. It’s very possible that it’s a different type of contamination for the community to respond to in the first place.

But at the same time, we see improvement in housing values, so there must be some degree of salience to this. It’s hard to say. Something must be changing with the cleanup program that the community is valuing; it can’t be the case that it’s all just hidden. I’ve talked myself into a little bit of a circle there, but that’s where the research could push to try to understand if a facility is continuing in operation and cleanup is occurring, then it might be a trust thing, too, right? People may say, “This management is regulated, and it’s improving the likelihood that this ongoing facility could be affecting my community.”

This is where there could be some qualitative information-gathering from communities that are nearby to try to understand what those dynamics might be. I don’t know that the kind of data that we use in this study or the kind of data I generally use in my research would get at the mechanisms for what makes this unique. It might need some surveys or key informant interviews to dig into more.

Daniel Raimi: That makes a lot of sense. One of the exciting things about some of the scholars working on environmental justice–type issues is that they’re trying to integrate the bigger data work that we’re talking about in today’s paper with the on-the-ground, collaborative, community-engaged research that can help flesh out some of the bones to try to get at the root of these questions.

You’ve alluded to other research in this field, and I’d love for you to talk about how your findings connect with other economic or public health research on this topic related to environmental justice and gentrification. Can you walk us through those connections?

Elaine Hill: You mentioned Hausman and Stolper; we are pretty inspired by their work. They focus on air pollution, but in that paper they highlight that imperfect information, especially in the housing market, can potentially cause low-income households to sustain a higher deadweight loss from pollution. There’s also work by Bakkensen and Ma, who show that, at least in flood risk, some of these sorting responses that we’re interested in studying may exacerbate the preexisting pollution disparities that can occur in a community.

We’re trying to contribute to this literature, but because we do not see evidence of sorting after these RCRA cleanups, then it shows that it might not always be the case that policy responses would exacerbate preexisting pollution disparities. Furthermore, these cleanups could mitigate the preexisting exposure disparities that could be due to partial information. So, I think we’re contributing to this literature and then providing this hopeful conclusion to it.

Daniel Raimi: Are there any other additional big research questions that you think come out of this analysis, that you or your colleagues are working on, that you want to highlight for our listeners?

Elaine Hill: We alluded to at least one: What determines neighborhood turnover in response to cleanup policies could help get at that underlying mechanism that would be useful for the policy implications. More broadly, at least my research program is interested in coupling the housing-market responses with the actual health effects of environmental exposure. We might say, “In the housing market we see people responding to exposure, but is that exposure actually harmful to their health?”

While the environmental economics literature may be interested in costs specific to moving or discrimination and barriers to achieving better environmental outcomes, combining those studies with health-impact studies can then shed light on information and salience that we were discussing. This can be super helpful for policymakers, because coupling the two gives a more holistic understanding.

Lastly, when economists contribute to understanding the health impacts of environmental exposures, we can provide these much-needed estimates to inform which regulations could have substantive benefits to health. That’s where our own research program is going. We have a companion paper that we’re working on, and it should be coming out next spring or summer. It looks at infant health impacts in these communities with the cleanup program. I think that when research programs combine both the hedonics with some sort of health-impact study, it can bring that light that we need.

Daniel Raimi: Plug away—you are always welcome to plug your own research when you’re a guest on Resources Radio.

Let’s shift gears, now, and ask you to plug someone else’s work. We’re going to ask you to recommend something that you’ve read, watched, or heard that’s related to the environment or health or any of the stuff that we’re covering today that you think is great and that you think our listeners would enjoy. What’s at the top of your literal or your metaphorical reading stack?

Elaine Hill: I recently listened to a podcast called Scene on Radio. They’re a documentary-type podcast that is focused on climate and the climate crisis, and the season that they put forth is called The Repair. The thing that I loved about this podcast was how they explored the historical and cultural roots of the crisis, which I think is important for thinking through policy remedies. They also visit a number of frontline communities around the world that could be of interest to some of the researchers listening to your podcast. Finally, they discuss solutions, in a really thoughtful way. I highly recommend that.

Daniel Raimi: Scene on Radio. I’ll definitely check it out, and I’m sure many of our listeners will, too.

One more time, Elaine Hill from the University of Rochester, thank you for coming on the show today and sharing this fascinating work with us. We appreciate it.

Elaine Hill: Thank you for having me.

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