It’s the Smell

Abstract

This study examines how the housing market responds to closing a major environmental disamenity nearby, particularly when the credibility of local policy is uncertain. The Fresh Kills landfill in New York provides an empirical setting to examine this question across multiple distinct events with varying credibility signals. Results from a difference-in-differences analysis show that market prices and volumes respond sharply to credible actions (i.e., capping the landfill and park transitioning) rather than policy announcements. The findings suggest that resolving uncertainty can have a powerful supply effect for housing markets, applying downward pressure on prices in the short run