Grantee Research Project Results
2002 Progress Report: Urban Regeneration through Environmental Remediation: Valuing Market Based Incentives for Brownfields Development
EPA Grant Number: R829607Title: Urban Regeneration through Environmental Remediation: Valuing Market Based Incentives for Brownfields Development
Investigators: Meyer, Peter B. , Wernstedt, Kris , Alberini, Anna
Current Investigators: Meyer, Peter B. , Wernstedt, Kris , Alberini, Anna , Heberle, Lauren
Institution: University of Louisville
Current Institution: University of Louisville , Resources for the Future , University of Maryland - College Park
EPA Project Officer: Hahn, Intaek
Project Period: March 1, 2002 through February 29, 2004
Project Period Covered by this Report: March 1, 2002 through February 29, 2003
Project Amount: $277,388
RFA: Market Mechanisms and Incentives for Environmental Management (2001) RFA Text | Recipients Lists
Research Category: Environmental Justice
Objective:
The objective of this research project is to examine the relative importance to developers of different market-based mechanisms and other incentives for promoting the remediation and reuse of brownfields (i.e., previously used and potentially contaminated urban sites). Although this objective has not changed, we have slightly expanded the research project to determine the extent to which developer rankings of different incentives and investment conditions are misperceived by public officials.
Progress Summary:
Progress has been made on the design of the conjoint instrumentation and on the identification of a population to be sampled. This progress has been affected, however, by a series of unexpected problems that were encountered in implementing the original design, resulting in some modifications. Progress is thus described here in terms of the problems encountered and how they were overcome.
Identification of a Universe of Developers to Study
First, implementation meetings with the project developer advisory panel made it clear that developers do not specialize in locations or in types of investments to the extent expected, so the geographically focused sample could not be drawn. Therefore, a national sample was required. Second, there were no consistent means available for identifying developers who were doing brownfields or infill investment. A broader universe needed to be surveyed with some allowance for positive self-selection. As a result, those doing infill, our true study target, would be more likely to respond. Third, defining who in a firm actually makes development decisions is more complex than expected, with key decisions often outsourced to advisors. Therefore, an internal organizational respondent selection process could not be implemented. We were looking for membership lists that could provide names of people who were likely to be developers and intimately involved in the development decision. This led us to the Urban Land Institute (ULI) membership lists, which we discovered could be accessed online because the principal investigator was a member. Selecting from that 17,000 member list, however, was going to be difficult, so we ended Year 1 of the project building a cooperative relationship with ULI senior staff (one of whom was on our advisory panel). This larger potential panel, combined with the use of a national, nongeographic-specific sample, has made it possible to commit ourselves to a much larger mail survey than previously budgeted.
Classification of Differences Between Developers When They Do Respond
ULI senior staff members and our other advisory board members noted that it is effectively impossible to come up with standardized common measures for the size of a developer; and the "typical project size" of a developer is almost meaningless. Some developers operate shells, contracting out all functions from detailed physical planning to implementation. Other developers keep all functions in-house, and the range between is diverse. Therefore, employment size is meaningless as a measure, but so are annual revenues, because some developers build and hold (renting or leasing) while others develop for sale and, as a result, show very different income and asset profiles. Finally, project financial scale is affected by huge differences in land costs across the nation, so a $10 million project may be small in Denver, CO, or the Washington, DC metropolitan area, but seen as larger in the Cincinnati, OH, Louisville, KY, or Indianapolis, IN, contexts. As a result, we had to recognize the fact that all projects presented would be, in some sense, "hypothetical" to all respondents. The key problem we are working on is making certain the project choices are perceived as "real." If the choices do not apply to the developer, can the respondent envision a colleague/competitor facing these conditions?
Inability To Follow Standard Conjoint Analysis Protocols in Instrument Design
In discussing the conjoint question instrumentation and overall survey design and administration options, we had to address unforeseen issues. First, with a population of specialized professionals with their own languages and verbal shorthands, we could not utilize objective focus group facilitators because they could not follow the jargon used by our potential participants. Second, we could not expect full disclosure and open discussion among a group of developers in an area from which we could potentially draw a focus group, because they were in competition with each other and would not be willing to describe their decision processes to each other. As a result, we did extensive data collection from developers through indepth personal interviews conducted by the senior investigators. (Developers in the Washington, DC area, as well as those based around Louisville, KY; Cincinnati, OH; St. Louis, MO; Indianapolis, IN; and Denver, CO, were tapped for their insights into brownfield redevelopment markets, reactions to questions, and other information.) We discussed the types of incentives to which they would respond and refined a list of some 10 intervention elements and types, not all necessarily commensurable, and some vary with values difficult to explain in a simple choice presentation. Refining the choices is the current main focus of the instrument design effort. This work was complicated by many factors we had not expected:
1. A developer noted that instead of cash subsidies, he would be equally satisfied with "fee waivers of equivalent value" (an in-kind contribution). This left us wondering if we had to vary the cash/in-kind form of financial support of different types.
2. Even cash support is not all commensurable. Financial aid for site assessment covers costs that would be incurred even if the project was rejected by the developer, while other aid is only available if the project goes forward. Therefore, we agreed we would actually work with two different monetized attributes in the final choice set.
Simplification of the Set of Market Incentives To Be Tested
This discussion deals with a set of procedural and methodological issues that arose after the initial design efforts that complicated our work. The first real difficulty involved simply getting investigators to agree about which specific market mechanisms to test. We originally proposed to examine: Financial Incentives (direct financial aid), Regulatory Flexibility, and Liability Relief. These three elements have several dimensions and make the needed simplification for discrete choice questions very difficult. The investigators' discussions were made more complex by a division among them: Drs. Meyer and Wernstedt had experience with the brownfields issues and developers and investors' responses and concerns, while Dr. Alberini and instrumentation consultant Kevin Boyle (University of Maine) were more concerned with testing the theory about market incentives of the types previously tested. As a result, coming to an agreement on issues such as whether or not accelerated review of applications for approval of site environmental response plans constituted a relevant and measurable incentive became difficult, especially when "regulatory relief" also could mean lower standards for performance. Such lower standards, however, could then raise the importance of the liability relief if the cleanups proved to be inadequate in the future. We resolved these issues through a process of aggressive simplification; tested for realism with our indepth interviewees in our original meeting and followup phone and e-mail contacts. As a result, timing was dropped as an issue (getting rezoning permits can take longer than review of site cleanup plans, which can be pursued simultaneously), and process factors (hearings requirements, privileges offered on approval of responses, etc.) were given more attention in addition to the financial supports. In Year 1 of the project, we made substantial progress addressing a series of methodological problems that few researchers have attempted to address, including identification of developers as distinct from other parties involved in land regeneration or land use conversion and those doing construction or building rehabilitation, and derivation of methodologies to get those parties to do more than rank order or assign importance values to different public sector development promotion offers.
Future Activities:
In the next year, we will complete project data collection and analyses. We also will prepare publications and make presentations of our findings. Additional future activities include:
• Preparing opinion survey instruments for public officials, especially Likert scale questions about the brownfields investment scene, that can be administered to both officials and private developers (June-July 2003).
• Conducting a survey of local development officials about what incentives they believe attract developers to brownfields, and which incentives do not (August-September 2003).
• Conducting a series of extended interviews with state environment and development officials about the incentives they offer to promote reuse of brownfields, and why they do or do not offer different types of programs (July-September 2003).
• Completing the design and pretesting of the developers' conjoint survey (September 2003).
• Conducting the developers' conjoint survey using a 2,800 name selected list from the ULI. (Conducted using a standard Dillman protocol for mail surveys in October-November 2003.)
Analyzing the resulting data, including efforts such as: (1) conducting the conjoint analyses of the developers' responses, (2) comparing the developers' and public officials' Likert choice responses, and (3) comparing the public officials' predictions of developers' responses to incentives to the valuations revealed by the conjoint analyses.
Dissemination/Publication Plans
Dissemination and publication plans include:
• Academic publication in journals such as: Environmental Economics, Journal of Environmental Planning and Management, Land Economics, Economic Development Quarterly, etc.
• Trade publication and dissemination to practitioners through vehicles such as: Urban Land (the monthly journal of ULI), Commentary (the journal of the International Economic Development Council [IEDC]), Planning (the monthly publication of the American Planning Association [APA]), and Brownfield News (the monthly publication of the National Brownfields Association [NBA]).
• Working Papers and Practice Guides, adding to the series already maintained online and in print by the Center for Environmental Policy and Management at the University of Louisville and by Resources for the Future.
• Presentations discussing both methodological issues/innovations and research results at academic conferences, including a number for which at least some results will be available prior to submission deadlines. North American academic conferences we plan to attend include the International Society for Ecological Economics (July 2004), the International Urban Planning and Environment Association (September 2004), the Association of Collegiate Schools of Planning (November 2004), the Allied Social Sciences Association (January 2005), and the Urban Affairs Association (April 2005).
Presentations at practitioner conferences include anticipated participation in the meetings or seminars of ULI, IEDC, APA, NBA, International City-County Management Association, the U.S. Environmental Protection Agency Annual Brownfields Conference, and the Economic Development Administration Annual Conference of the U.S. Department of Commerce.
This array of anticipated publications and presentations largely is predicated on our expected completion of the core work during Year 2 of the project. We expect to meet that schedule.
Journal Articles:
No journal articles submitted with this report: View all 31 publications for this projectSupplemental Keywords:
Comprehensive Environmental Response, Compensation, and Liability Act, CERCLA, infill, investment, decision making, regulatory relief, liability, risk, cleanup, remediation, real estate development, sprawl, sustainable development, building permits, homebuilders, local economic development, state economic development, regulatory reform, waste, brownfields, market mechanisms, remediation, brownfield sites, community based, effects of policy instruments, environmental economics, environmental remediation, financial mechanisms, government intervention, impact of federal policy instruments, market incentives, market-based mechanisms, policy incentives, policy making, socioeconomics., RFA, Scientific Discipline, Economic, Social, & Behavioral Science Research Program, Waste, Remediation, Economics, Brownfields, Urban and Regional Planning, Social Science, Market mechanisms, brownfield sites, effects of policy instruments, financial mechanisms, market incentives, market-based mechanisms, urban regeneration, impact of federal policy instruments, policy incentives, policy making, decision making, government intervention, environmental remediation, Brownfield site, community based, socioeconomicsRelevant Websites:
http://cepm.louisville.edu/publications/publications.htm Exit
Progress and Final Reports:
Original AbstractThe perspectives, information and conclusions conveyed in research project abstracts, progress reports, final reports, journal abstracts and journal publications convey the viewpoints of the principal investigator and may not represent the views and policies of ORD and EPA. Conclusions drawn by the principal investigators have not been reviewed by the Agency.