Brownfield Areas and Housing Value: Evidence from Milan

Using a transaction price database, in this paper we evaluate the economic effect of abandoned and derelict real estate areas on housing prices in Milan Italy from 1993 to 2016. We find that brownfields are widespread throughout Milan, with larger abandoned and derelict areas prevalent in the suburbs. Standard hedonic price models show that nearby brownfield areas lower housing prices, with stronger effects for larger derelict and abandoned areas. Economic losses are more relevant to houses in the historical city center and are affected by real estate market trends.