Bloom and bust: Toxic algae's impact on nearby property values

- Estimate the housing capitalization effect of crossing WHO 1 μg/L microcystin threshold
- Adjacent properties lose 22% of their value when located near algal-infested waters
- Extent of algal related losses limited to properties within 600 m of lakes
- Property losses for recurrent algal blooms on a single Ohio lake exceed $51 million

Over the past decade harmful algal blooms (HABs) have become a nationwide environmental concern. HABs are likely to increase in frequency and intensity due to rising summer temperatures caused by climate change and higher nutrient enrichment from increased urbanization. Policymakers need information on the economic costs of HABs to design optimal management policies in the face of limited budgets. Using a detailed, multi-lake hedonic analysis across 6 Ohio counties between 2009 and 2015 we show capitalization losses associated with near lake homes between 11% and 17% rising to above 22% for lake adjacent homes. In the case of Grand Lake Saint Marys, we find one-time capitalization losses exceeding $51 million for near lake homes which dwarfs the State of Ohio's cleanup expenditure of $26 million.