EAST LANSING, Mich. – Cleaning up polluted shorelines is revitalizing local economies as well as ecosystems, according to a recent analysis from economic consulting firm Anderson Economic Group, LLC.
AEG estimated that restoring three of the most polluted locations in Michigan – Deer Lake, White Lake, and the Menominee River – has produced $138 million in benefits. The firm found that property values tend to appreciate faster relative to similar locations after remediation actions. Cleaner water, natural shorelines, and enhanced public access can significantly increase the desirability of nearby communities.
“Living in these areas becomes much more attractive once they’re cleaned up, and that affects housing values,” said Max Melstrom, an economist at AEG. “Our analysis found that these projects lead to substantial economic benefits. Removing these pollutants can influence residents and home buyers and even entrepreneurs who prioritize local amenities.”
The three locations AEG focused on—Deer Lake, White Lake, and the Menominee River—were once designated Great Lakes Areas of Concern (AOCs). AOCs are federally recognized locations suffering from toxic pollutants left from decades of industrial dumping and lax environmental regulation. Cleanup often requires dredging and removing thousands of tons of contaminated sediment, which can cost tens of millions of dollars. Deer Lake and White Lake were removed from the list of AOCs in 2014. Menominee River followed in 2020. However, 11 more AOCs remain in Michigan, the most of any state. Muskegon Lake, another AOC, is on track to be delisted soon. AEG reported that restoration actions around Muskegon Lake would generate $143 million in benefits.
AEG’s analysis considered the number of households living around AOCs, typical property values in those areas, and comparable housing market studies. It estimated and applied the percent change in property values following large restoration actions to homes near AOCs in Michigan. The estimates for Deer Lake, White Lake, and the Menominee River fall within the range of changes experienced at other locations.
“At AEG, we have completed several analyses over the years with a consistent method. Dealing with invasive species, cleaning waterways, or restoring rapids, have all shown the potential for economic impact that is greater than the initial investment,” said Tyler Theile, chief operating officer and director of public policy analysis at AEG.
AEG noted that actual benefits will vary across locations and that the total economic effects could be much larger than their estimate, which accounted for only a few housing markets. The analysis did not examine benefits linked directly to health, tourism, or habitat conservation, which would be additional and require more research. Furthermore, AEG’s analysis measured benefits after restoration actions were completed, although in practice effects can take time to accrue and can start several years before or after completion.
Additional commentary and data from AEG is available upon request.
###
About Anderson Economic Group
Founded in 1996, Anderson Economic Group works with public, private, and non-profit organizations, specializing in economic impact, business valuation, expert testimony, and public policy. Anderson Economic Group has assisted governments, nonprofits, and businesses across the United States and abroad. All of the firm’s work is grounded in the core values of professionalism, integrity, and expertise. Anderson Economic Group has offices in East Lansing, Michigan and Chicago, Illinois. For more information or to speak with one of our experts, visit andersoneconomicgroup.com.
