Special Report

America's Most Polluted Housing Markets

474366331When discussing human impact on the environment, the focus is often on the global and national levels. But the impact can also be a major problem at the local level, resulting in poor environmental quality inside a few blocks of a city or a small stretch of river. Perhaps more than ever, man-made environmental problems can pose serious problems for potential homebuyers in various local markets.

Man-made environmental concerns can include poor air quality, a high number of environmental hazards, and, in the worst cases, high-concern superfunds. Superfund is a government environmental program established to identify hazardous waste sites for cleanup. Such issues were first brought to Americans’ attention in the late 1970s when environmental concerns surfaced in Love Canal, a community in upstate New York. Based on data from Homefacts, a U.S. housing market tracking company, these are the 10 housing markets with the worst man-made pollution.

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It can be extremely difficult to gauge the effects of man-made hazards. The ramifications of such hazards on both the environment and local economies may not be understood for many years if not decades. In addition, homebuyers do not necessarily take environmental hazards into account when selecting a home to purchase. Still, cleaner markets “that do not have high prevalence of these hazards tend to be just more stable real estate markets,” said Daren Blomquist, vice president of RealtyTrac, a housing data and analytics firm and the parent company of Homefacts.

Homefacts considered air quality, the presence of superfund sites, and the total number of environmental hazards per square mile in determining the markets with the worst man-made pollution.

Air quality was measured by the average percentage of days per year, since 2008, in which levels of carbon monoxide, ozone, nitrogen dioxide, particulate matter, and other toxic substances were above a certain threshold. While air quality across the country was considered poor only 5.4% of the time, five counties with the worst man-made pollution had poor air quality more often In Jackson County, Missouri, where air quality was among the worst of any county reviewed, the air quality was considered poor more than 12% of the time.

In addition to air quality, homebuyers may also care about the prevalence of environmental hazards in their cities. Six of the 10 housing markets with the most man-made pollution also had among the 10 highest concentrations of environmental hazards per square mile.

Some markets had especially high concentrations of particular hazards. For instance, St. Louis, Baltimore and Philadelphia County were all among the top five markets by brownfield sites per square mile. Brownfields are real estate properties for which redevelopment is hindered by the presence of hazardous waste. Another hazard is illegal drug labs. The environmental hazard score of Tulsa County, Oklahoma rose because of the relative presence of former drug labs, which pose serious environmental and safety concerns for nearby homeowners.

Since hazardous waste sites are so numerous and the danger levels are so varied, some superfund sites are placed on the national priorities list (NPL), which is designed to guide the Environmental Protection Agency’s (EPA) investigations and cleanup efforts. As Blomquist explained, if the superfund site has been identified, “it is more of a long-term problem … A lot of times the damage has already been done.”

Six of the markets with the worst man-made pollution had among the 10 most superfund sites on the national priority list, three of which were in New Jersey. Two of these New Jersey markets, Essex County and Hudson County, had the first- and second-highest concentrations of NPL superfunds in the nation, respectively.

Perhaps counterintuitively, markets with a higher prevalence of man-made hazards had stronger home price appreciation in recent years, according to RealtyTrac. Such markets may be more volatile also because of factors not related to pollution. These markets “have more people, so they’re more dynamic, [with higher] turnover in population and in buying and selling of homes,” Blomquist said. He added that over a longer period of time, home prices and appreciation rates were actually greater in markets with the lowest environmental concerns.

While factors other than environmental quality tend to play a much greater role in homebuyers’ decisions, Blomquist recommends homebuyers do the due diligence on the environmental quality of their area as well. “In that 1% of instances where there is that really serious [environmental] issue that affects you personally,” Blomquist said, such due diligence really matters.

In order to determine the 10 housing markets with the worst man-made pollution, 24/7 Wall St. reviewed data published by Homefacts, a RealtyTrac subsidiary. Only counties with a population of 100,000 or more were considered.

Homefacts collected data across three different broad metrics. Air quality accounted for 20% of a market’s score. Air quality scores are based on annual reporting, from 2008 onwards, on levels of airborne of carbon monoxide, fine particles and particulate matter, nitrogen dioxide, ozone, and sulfur dioxide. Superfunds that made the NPL accounted for 20% of a housing market’s score as well. Environmental hazards such as superfunds not on the NPL, as well as brownfields, former drug labs, and designated polluters accounted for 60% of each market’s total score. Homefacts used data from the EPA for most of these measures, with figures on drug labs coming from the Drug Enforcement Administration (DEA).

Median home prices are from RealtyTrac for July 2014. RealtyTrac also provided home price changes over one-, five-, and 10-year periods. Where available, home sales price data were utilized. For states that do not require disclosure sales information, or that had insufficient data, home list prices were used to calculate the median home prices. Annual median household incomes for 2014 are based on RealtyTrac’s extrapolation of U.S. Census Bureau data and represent an estimate. Unemployment data for June 2014 come from the Bureau of Labor Statistics.

These are the 10 most polluted housing markets