Stigmatized Properties: Filter Theory

Abstract

International literature does not treat stigmatized properties in a uniform manner. In the proposed article, the Author employs the following definition: “A stigmatized property is one assigned with a real or perceived negative external effect on the users. That external effect modifies or reduces property market value through a specific, multilayered filter.” Many property-related stigma cases are mentioned in the literature, such as high-voltage lines, noise, air pollution, airports, haunted properties, and many other similar situations. The various stigmas, as well as identical stigmas on different properties, have been assessed individually so far. Knowing the depreciating mechanism of a stigma allows for valuers the uniform handling of stigmas on different properties, as well as understanding the depreciating mechanisms of new stigmas. Using extensive literature research on various stigma cases, the Author built up a framework that explains the major variables and their interdependencies. As the result of the research, the new theory describes the change in value caused by the stigma takes place through a filter that combines the distance between the stigmatizing factor and the stigmatized property, the environmental conditions and community perceptions and interprets them differently over time.