Declining Property values
Economic obsolescence: In real estate, loss of value from all causes outside the property itself. For example, an expensive private home may drop in value when an industrial plant is built nearby. This is a form of economic depreciation that must be considered in the appraisal of the property.
In the study, "Housing Prices During Siting Decision Stages: The Case of an Incinerator from Rumor through Operation", (1995 Journal of Environmental Economics and Management paper) authors Kiel and McClaine find that the presence of an incinerator begins to have an effect on property values even before it begins operation, and that it continues to drive down prices for years. According to this study, "appreciation rates are affected as early as the construction stage of the incinerator, and the adjustment continues several years after the
facility has begun operation." Over the seven-year period of the incinerator operation studied, the average effect observed led to property values more than 20% lower than they otherwise would have been.
Source: Kiel Katherine A. & McClain Katherine T., 1995. "The Effect of an Incinerator Siting on Housing Appreciation Rates," Journal of Environmental Economics & Management, Elsevier, vol. 37(3), pages 311-323, May.